Ethereum

SEC Regulations, Ethereum 2.0 and Ripple Wins

Published

7 months ago

28 June, 2024

SEC Regulations, Ethereum 2.0 and Ripple Wins

Over the past few weeks, the Web3 legal space has seen many litigations and investigations come to an end, while others are just beginning. Terraform Labs is looking to settle its dispute with the SEC and focus exclusively on its ongoing bankruptcy proceedings, and the SEC has closed the door on its “Ethereum 2.0” investigation (for now). While Ripple has been able to defeat most of the private actions filed against it, some issues remain to be resolved, and the Kraken vs. SEC litigation is poised for a busy year of discovery.

These developments and some other brief notes are discussed below.

Terraform Labs and Founder Settle with SEC: June 12, 2024

Background: Terraform Labs has agreed to drop its appeal and damages hearings after a jury found that the company and its founder, Do Kwon, responsible for securities fraud in April of this year. Instead, the company and the founder asked the Court to approve a settlement approximately $5 billion in fines, interest and civil penalties. Do Kwon is personally responsible for $204 million in penalties, so I guess his size is not size no more either.

Analysis: The SEC gets virtually everything it wants. requested in his memorandum on damages so that’s about all you can expect from a white flag and from waving a white flag. Terraform Labs already filed for bankruptcy in January of this year with assets estimated at less than $500 million and the same amount of outstanding liabilities. The funds owed to the SEC under this settlement will constitute an unsecured claim in the bankruptcy case, and the SEC will have to seek its share of what is left after Terraform Labs’ assets are used to pay secured creditors, administrative expenses and legal fees after the petition. So Terraform likely understood that the difference between their proposal of $3.5 million and the SEC’s of $5.3 billion was close to zero since the company would not be able to pay a significant portion of either of these fine options. Apparently, Terraform Labs has handed control over to the “community.” Following the announcement of the settlement, Ripple and the SECOND they traded blows over whether it should change the damages analysis in their case.

SEC Drops Investigation into Ethereum 2.0: June 18, 2024

Background: The SEC sent a letter to Consensys Software stating that the Commission staff does not intend to recommend the application action against Consensys relating to the SEC investigation The investigation was conducted into what the SEC calls “Ethereum 2.0.” The investigation appears to be related to the Ethereum network’s shift from validating transactions that occur on the network from “proof of work” to using “proof of stake” for these validation functions. This change in validation methodology prompted the SEC to revisit the then-Enforcement Director’s statement in 2018 that proof-of-work Ether was not a security. The June 7 letter to which the SEC refers is available here.

Analysis:Is it a coincidence that this decision comes a week after the Head of the Crypto Assets and Cybersecurity Unit of the SEC Enforcement Division announce his departure? It is currently unclear whether this decision is actually the SEC’s decision not to investigate Ethereum 2.0 or whether it is simply a temporary tactical strategy to possibly bring up the issue. Consensys Trial Underway in Texas. Such a strategy would be similar to the SEC’s attempt to debunk Coinbase’s regulatory application by stating that it was “under review” despite ample evidence to the contrary. It will also be interesting to see whether Consensys and Lejilex’s challenges to separate administrative proceedings before the SEC have the same success as a recent decision in this same federal district challenge an action of a separate administrative body.

Ripple Labs Mostly Beats Securities Class Action, But Problems Remain: June 20, 2024

Background: Ripple Labs has won most of its decisions seeking summary judgment in securities class action litigation which was filed by various individuals shortly after the SEC filed suit against the $XRP developer. The Court held that the plaintiffs’ federal securities claims were barred by the applicable statute of repose and that the state law claims also could not proceed because the named plaintiffs lacked the necessary contractual relationship with Ripple. The Court, however, allowed individual complaints for misleading statements continue the trial.

Analysis:While this is a significant victory for Ripple, the order itself contains suboptimal language on the Howey question for the remaining claims and does not prevent Ripple from going to trial on the remaining claim. The Court found that the plaintiffs had sufficiently stated a claim that the $XRP tokens themselves are potentially securities that could give rise to a claim for misrepresentation in connection with a security, even if the plaintiffs purchased the tokens on secondary markets.

Kraken’s Motion to Dismiss SEC Case Likely to Be Dismissed After Hearing: June 20, 2024

Background: On June 20, 2024, the court overseeing the SEC’s lawsuit against Payward Inc. (d/b/a, Kraken) telegraphed its intention to deny Kraken’s motion to dismiss during oral pleadings on movement. The Court was not particularly perturbed by the major question doctrine, rejecting the parties’ offers to present oral arguments on this issue. Although Judge Orrick heard arguments on many remaining issues, he said at the start of the hearing that he was inclined to deny the motion to dismiss and follow the order of Judge Failla in the agency’s lawsuit against Coinbase, a breakdown of which the Polsinelli team provided in our Bi-weekly update April 15, 2024.

Analysis:Kraken’s lawyers tried to distinguish between the binding case law that Judge Failla was bound by in the Second Circuit and the Kraken case in the Ninth Circuit, but that did not appear to sway Judge Orrick during the hearing as they focused on scheduling issues after oral argument concluded (giving at least some indication that the Court expects the case to proceed to discovery).

In short :

PleasrDAO sues Martin Shkreli: PleaseDAO is sue Martin Shkreli (AKA, “Pharma Bro”) regarding the Wu Tang was never released to the public album purchased by the DAO during the confiscation and sale of the latter’s assets, imposed by the Ministry of Justice. This comes after the DAO hosted the album’s first ever listening party. Martin Shkreli also claimed to be behind the “meme-coin” $DJT. with the alleged support of Barron Trump.

Crypto Campaign Funding Continues to Grow: Fairshake, the pro-crypto super PAC, now has total funding of $169 millionwith over $100 million still in its war chest, after Jump Crypto added another $10 million to the pot.

Another Major Departure from SEC’s Crypto Enforcement Unit:David Hirsh, the head of the SEC’s Crypto Asset and Cyber Unit within the Division of Enforcement leaves the agency. This follows the departure of Stuart Charge, who has been involved in numerous cases of theft of the agency’s digital assets.

Ether ETFs Expected Approval This Summer: Gary Gensler said he expects Ether ETF S-1 filings for issuers should be approved by this summer. Despite this, there is always seems to be behind in activity in these different S-1 applications.

District Court Serves Subpoena Against ‘Meme-Coin’ Creator: A judge of the U.S. District Court for the Southern District of Florida agreed to execute a subpoena issued against the issuer of the coin “Let’s Go Brandon” (“LGBCoin”). The creator requested a stay of execution of the order.

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Ethereum

Cryptocurrency liquidations surpass $200 million as Ethereum and Bitcoin plummet

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Bitcoin and Ethereum Tank as Crypto Liquidations Reach $150 Million

Cryptocurrency market liquidations hit their highest level in a week on Wednesday as the price of Bitcoin fell below $60,000.

Over the past 24 hours, over 74,000 traders have been liquidated for $208 million, CoinGlass the data shows it.

The majority of those losses, about $184 million, went to investors holding long positions who had bet on a price rise.

The largest liquidations hit Ethereum investors, at $55.5 million, almost entirely on long positions, the data showed.

Current issues surrounding US monetary policy, geopolitical tensions, and the upcoming US presidential election in November are expected to impact the price of the leading cryptocurrency throughout 2024.

Bitcoin abandoned The stock price fell from $62,200 to $59,425 intraday. The asset has since recovered its losses above $60,200, but is still down 3% over the past 24 hours.

In the meantime, Ethereum East down 3% During the same period, the stock price fell from a high of $3,425 on Wednesday to a low of $3,254. It is now trading at $3,300.

Solana, the world’s fifth-largest cryptocurrency by market capitalization, was the worst hit among the top 10 cryptocurrencies, down about 8% to $140. Solana had been riding high on New York investment management firm VanEck’s filing of its Solana Trust exchange-traded fund late last month.

Major cryptocurrencies have been falling over the past month. Ethereum has fallen more than 12% over 30 days despite growing interest in the launch of Ethereum spot ETFs.

Some analysts predict that new financial products could begin marketing in mid-Julywith at least one company predicting that the price of ETH will then take offBitcoin is down 12% over the same period.

Certainly, analysts always see further price increases this yearThe current market cooling represents a precursor to another major price surge in the coming months, Decrypt reported Monday.

On Wednesday, analytics firm CryptoQuant released a report examining Bitcoin Mining Metrics and highlighted the conditions for a return of prices to current levels.

Edited by Sebastian Sinclair.

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Ethereum

Volume up 90%: good for ETH price?

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Ethereum (ETH) has emerged as a beacon in the sea of blockchains, with a staggering 92% increase in decentralized application (dApp) volume over the past week. But the news comes with a layer of complexity, revealing a landscape of both opportunity and potential setbacks for the leading blockchain.

Cheap gas fuels the fire

Analysts attribute the explosion in decentralized application volume to the Dencun upgrade in March, which significantly reduced gas costs – the cost associated with processing transactions on the Ethereum network.

Lower transaction fees have always attracted users, and this recent development seems to be no exception. The surge in activity suggests a revitalized Ethereum that is likely to attract new projects and foster a more vibrant dApp ecosystem.

NFT craze drives numbers up

While overall dApp volume (see chart below) paints a positive picture, a closer look reveals a more nuanced story. This surge appears to be driven primarily by an increase in NFT (non-fungible token) trading and staking activity.

Source: DappRadar

Apps like Blur and Uniswap’s NFT aggregator have seen significant surges, highlighting the rise of the NFT market on Ethereum. This trend indicates a thriving niche in the Ethereum dApp landscape, but raises questions about the platform’s diversification beyond NFTs.

A look at user engagement

A curious problem emerges when looking at user engagement metrics. Despite the impressive increase in volume, the number of unique active wallets (UAWs) on the Ethereum network has actually decreased.

Ethereum is now trading at $3,316. Chart: TradingView

This disconnect suggests that current activity could be driven by a smaller, more active user base. While high volume is certainly a positive indicator, seeing broader user participation is essential to ensuring the sustainability of the dApp ecosystem.

A glimmer of hope ?

A positive long-term indicator for Ethereum is the trend of decreasing holdings on the exchange, as reported by Glass nodeThis suggests that ETH holders are moving their assets off exchanges, potentially reducing selling pressure and contributing to price stability.

If this trend continues, ETH could potentially target $4,000 this quarter or even surpass its all-time high. However, this price prediction remains speculative and depends on various market forces.

Ether price expected to rise in coming weeks. Source: CoinCodex

Ethereum at a Crossroads

Ethereum is at a crossroads. Dencun Upgrade has clearly revitalized dApp activity, particularly in the NFT space. However, uneven dApp performance and the decline of the UAW are raising concerns about the long-term sustainability of this growth. Network growth, measured by the number of new addresses joining the network, is also slowing, according to Santiment, which could potentially hamper wider adoption.

The short-term price outlook for ETH remains uncertain. While long-term indicators, such as declining exchange holdings, suggest potential for price appreciation, slowing network growth could lead to a price decline in the short term.

Look forward to

The coming months will be crucial for Ethereum. The platform must capitalize on the renewed interest in dApps by attracting a broader user base and fostering a more diverse dApp ecosystem beyond NFTs. Addressing scalability issues and ensuring user-friendly interfaces will also be essential to sustain growth.

If Ethereum can overcome these challenges, it has the potential to cement its position as the premier platform for decentralized applications. However, if it fails to adapt, other waiting blockchains could capitalize on its shortcomings.

Featured image from Pexels, chart from TradingView

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Ethereum

Ethereum, Bitcoin, and XRP Behind $1.5 Billion Losses in Cryptocurrency Scams

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Ethereum, Bitcoin, and XRP Behind $1.5 Billion Losses in Cryptocurrency Scams

The first half of 2024 has seen a surge in major hacks in the cryptocurrency sector. Ethereum (ETH)Bitcoin (BTC) and XRP have resulted in losses of over $1.5 billion due to cryptocurrency scams. This year, over 200 major incidents have resulted in losses of approximately $1.56 billion.

Cryptocurrency Scam Losses Reach $1.5 Billion

According to data from Peck Shield Alert, only $319 million in lost crypto funds have been recovered. Furthermore, this year’s losses represent a staggering 293% increase over the same period in 2023, when losses totaled $480 million.

Overview of Cryptocurrency Scams in 2024, Source: PeckShieldAlert | X

Additionally, DeFi protocols have been the top targets for hackers, accounting for 59% of the total value stolen. More than 20 public chains have suffered major hacks during this period. Additionally, Ethereum, Bitcoin, and XRP top the list for the amount lost via cryptocurrency hacks.

Additionally, Ethereum and BNB Chain were the most frequently targeted, each accounting for 31.3% of the total hacks. Meanwhile, Arbitrum followed with 12.5% of the attacks. One of the most significant incidents occurred on June 3, 2024.

Bitcoin DMMa major Japanese cryptocurrency exchange, reported a major breach. Attackers stole 4,502.9 BTC, worth over $300 million at the time. The incident highlighted the vulnerabilities of exchanges, especially those that handle large volumes of digital assets.

Major XRP, ETH and BTC hacks

A week after the DMM Bitcoin attack on June 10, UwU Loana decentralized finance (DeFi) lending protocol, was compromised. The breach resulted in a loss of approximately $19.3 million in digital assets. The hack underscores the ongoing risks associated with DeFi platforms, which often operate with less regulatory oversight. The platform later offered a $5 million reward to catch the hacker.

Earlier this year, on February 3, 2024, Ripple co-founder Chris Larsen confirmed a major security breach involving his personal wallets. Initially, rumors circulated that Ripple itself was targeted. However, Larsen clarified that the hack involved his digital wallets and not Ripple’s corporate assets.

The hackers managed to transfer 213 million XRP tokens, worth approximately $112.5 million. Additionally, on-chain detective ZachXBT first alerted the community about the suspicious transactions. In response to the theft, Larsen and various cryptocurrency exchanges took swift action to mitigate the impact.

Several exchanges, including MEXC, Gate, Binance, Kraken, OKX, HTX, and HitBTC, collaborated to freeze a significant portion of the stolen funds. Binance alone froze $4.2 million worth of XRP to aid in the investigation.

Additionally, on April 2, 2024, FixedFloat, a Bitcoin Lightning-based exchange, experienced a security breach. Unauthorized transactions resulted in financial losses exceeding $3 million. This incident highlighted ongoing security issues for FixedFloat, following a similar breach earlier in the year.

The company has also faced significant challenges securing its platform against repeated attacks. Additionally, in February, hackers stole $26 million worth of Ethereum and Bitcoin from FixedFloat. These digital assets were then transferred to exchanges for profit.

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Ethereum

Ethereum’s Year-Over-Year Revenue Tops Charts, Hitting $2.7 Billion

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Ethereum fees drop to seven-month low as L2 competition heats up

Ethereum blockchain has been in first place for a year incomesurpassing all major blockchains.

According to data provided by Lookonchain, Ethereum generated $2.72 billion in annual revenue, surpassing the Bitcoin network by a margin of $1.42 billion. The data shows that Bitcoin accumulated $1.3 billion in revenue over the same period.

Defi Llama Data watch that Ethereum is still the leader in decentralized finance (challenge) with a total value locked (TVL) of $58.4 billion, or 60.9% of the entire market. The blockchain recorded a 30-day fee revenue of $131 million, according to the data aggregator.

Bitcoin’s TVL is currently set at $1 billion.

The network of the second largest cryptocurrency, ETH, witness a 155% year-over-year increase in its fee revenue in the first quarter of this year, as the cryptocurrency market saw a bullish trend.

Tron comes in third with annual revenue of $459 million. Solana and BSC also recorded nine-figure revenues of $241 million and $176 million, respectively.

Notably, Tron is the second largest chain in the challenge scene with a TVL of $7.7 billion. BSC and Solana take third and fourth place with TVLs of $4.8 billion and $4.5 billion, according to Defi Llama.

Avalanche, zkSync Era, Optimism and Polygon reached the top 10 with $68 million, $59 million, $40 million and $23 million in year-over-year revenue, respectively.

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