What’s stopping the investigation into stealing $35 million from Atomic Wallet

Wallet developers are not cooperating with the investigation and refuse to provide data to back up their claims of hacking

In early June, users of the popular cryptocurrency wallet Atomic Wallet faced massive thefts of cryptocurrency. The first occurred back on June 2.Since then, several analysts in the investigation and have traced more than $35 million worth of stolen money. The wallet team said it was investigating the hack. But at the time of publication, it had not released any details of the incident.

Our experts note that Atomic is is a non-custodial cryptocurrency wallet. Unlike exchanges, such wallets allow users to store funds independently of a third party. The service originally launched in 2017 as a cryptocurrency exchanger called Atomic Swap. According to the official website, Atomic Wallet has more than 5 million users.

Although the standard in cryptocurrencies is considered open source. In Atomic Wallet’s case, it has always kept its code closed, including from independent auditors. Some cryptocurrency projects prefer not to disclose the software code. In order to avoid being copied by competitors. However, users, since they cannot view the code. And they cannot check if it really works the way it is supposed to and does not contain bugs. Instead, they are forced to trust the developers.

Details of the hack have not yet been disclosed

Transparency of blockchain as a public registry of cryptocurrency transfers allows to identify the addresses of affected wallets. As well as the further movement of funds. According to an analysis by an online detective known in the cryptocurrency community under the ZachXBT. According to his conclusions, hackers stole about $35 million in various cryptocurrencies. The researcher was also contacted by victims. In doing so, providing him with transaction data on the wallet. The hack stole funds in Ethereum (ETH), Dogecoin (DOGE), Litecoin (LTC), BNB (BNB) and Polygon (MATIC) cryptocurrencies. And one of the victims lost $8 million worth of crypto-assets.

According to Elliptic’s blockchain analysts, the hacker used Sinbad.io, a cryptomixer popular with North Korean hackers, to launder stolen funds. Based on the results of past major hacks, investigators estimate. That the North Korean hacker group Lazarus Group laundered more than $100 million through it. Analysts did not name the amount of Atomic users’ funds spent through the mixer. But they did say that Sinbad.io is probably a revamped version of Blender.io, a service heavily used by Lazarus Group. And the first mixer to be sanctioned by the U.S. Treasury Department.

The investigation requires obtaining so-called server logs, an activity log that logs all user activity on the site. But Atomic Wallet refuses to provide the necessary files to analysts from various companies, despite numerous requests.

 

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New list of banks working with cryptocurrencies

A new list of cryptocurrency-friendly banks emerged after the collapse of Silvergate and Signature. And at the moment more fragmented and less U.S.-oriented. Crypto Upvotes expert review

Bloomberg compiled a list of banks working with cryptocurrency companies. The journalists interviewed more than a dozen industry players, including banks, crypto exchanges and trading firms. As well as startups and consultants, and formed a list of banks around the world. Which are ready to accept clients from the crypto industry.

Two months after the collapse of Silvergate and Signature banks – amid increasing pressure from U.S. regulators on the crypto industry. Then a new cryptocompany-friendly banking system is now taking shape. In the U.S., firms are going to small regional lenders. Likewise, more and more market participants are turning to Swiss and Asian banks.

As a result, the new system is more fragmented. It’s also less U.S.-oriented and less publicized, the publication notes.

The following banks now work with cryptocurrency firms in the U.S:

Customers Bancorp of West Reading, Pennsylvania, operates CBIT, a real-time payments platform for trading firms, exchanges and institutional investors. The platform allows transfers in U.S. dollars seven days a week. It is used by Circle, the issuer of USD Coin Stablecoin, and the Coinbase and Bitstamp exchanges were also Customers customers.

Cross River Bank, based in Fort Lee, New Jersey, is known for its ties to fintech companies. It provides banking services to some cryptocurrency firms. Such as Coinbase and Circle.

Western Alliance Bank, based in Phoenix, Arizona. It also has a digital asset and blockchain division. Which serves customers in this sector. It also offers real-time payment capabilities.

Axos Financial Bank, based in Las Vegas, Nevada. It also opens bank accounts for some cryptocurrency firms. The SEC lawsuit lists it as one of the banks used by Binance.US. The bank previously had big plans to move into cryptocurrencies. But now they are frozen indefinitely.

FV Bank International, registered in Puerto Rico (a self-governing territory under U.S. control). It also allows customers to keep Bitcoin and U.S. dollars in the same bank account. It is launching conversions of some cryptocurrency tokens into U.S. dollars, using third-party brokers for the exchange.

In the Asian market the publication singled out the following 3 banks:

London-based Standard Chartered offers banking services to a “very select” group of digital asset service providers. And it supports them in providing services to connect and disconnect platform users. The bank’s services for digital asset firms include corporate accounts. As well as client asset accounts and currency exchange, primarily in Singapore, Hong Kong and the United Arab Emirates.

DBS Group Holdings is Singapore’s largest bank. It was founded in 1968, three years after Singapore broke away from Malaysia. And became a separate country. The bank offers deposit accounts to regulated companies. Who deal in digital assets and blockchain. It also offers corporate, institutional and accredited clients the ability to deposit. As well as withdrawals through its own digital platform, the DBS Digital Exchange.

ZA Bank is the largest virtual bank in Hong Kong. It now plans to offer conversion of tokens into fiat currencies on licensed exchanges. In addition, the bank plans to provide an account service for the digital sector.

Among the European banks the publication singled out the following:

London-based BCB Group offers customers access to its Blinc payment network for issuing digital assets. It operates in the European region. And in doing so, it allows participants to instantly pay each other in different currencies. The firm offers business accounts, over-the-counter trading in cryptocurrencies. As well as fiat currencies, digital asset storage and treasury services for clients. And also including exchanges, market makers, lenders, funds, brokers and traders.

Bank Frick & Co, based in Liechtenstein, offers banking services. Such as business accounts, for example, for established firms and startups in the blockchain and cryptocurrency sectors. It also offers trading and storage of some cryptocurrencies, including Bitcoin and Ethereum.

SEBA Bank AG in Switzerland offers individuals, companies and institutional clients access to trading. As well as investments in structured products, storage and borrowing of digital and traditional assets. SEBA has term deposit accounts and payment services. But it also offers crypto investment trackers and a cryptocurrency credit card.

Sygnum Bank AG, based in Switzerland and Singapore. It specializes in digital assets for institutional and private qualified investors. As well as corporate clients and financial institutions. It offers custody, brokerage, tokenization, asset management, lending. And business banking, accepting deposits in Swiss francs, euros, Singapore dollars and U.S. dollars to buy, trade and hold cryptocurrencies.

Payment service provider Clear Junction offers financial institutions, including cryptocurrency companies, access to UK bank accounts. As well as virtual international bank account numbers, payment networks, currency exchange and e-wallets. Companies can receive deposits to buy digital tokens. And they can accept payments through traditional bank transfers. And keep funds under their own name using correspondent accounts.

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What is ZK technology and how it helps Ethereum

Our experts tell us how a complex cryptographic concept found application in the cryptosphere. And why startups that use ZK technology attract millions of dollars from investors

As early as 2019, cryptocurrency-oriented venture capitalists have been supporting startups. Which are engaged in the development of technical solutions somehow related to zero-knowledge proofs technology (zero-knowledge proofs or ZK-proofs, ZK). It is largely thanks to the cryptosphere that the complex cryptographic concept has become a successful marketing tool for startups. Who are creating tools to optimize Ethereum and other networks.

Matter Labs has raised nearly $0.5 billion from foundations to develop its zkSync solution. And the launch of Polygon’s zkEVM software environment by Polygon Labs, with similar funding, was an event in the cryptocurrency community. Projects like Starknet or Scroll are worth billions of dollars. And they all use ZK-proofs technology in one way or another.

In 1985, scientists Shafi Goldwasser, Silvio Micali and Charles Rakoff published a paper called “Knowledge Complexity of Interactive Proof-Systems. This was the first theoretical formulation of zero-disclosure proof technology.

To greatly simplify, this cryptographic technique allows you to prove that you know something without revealing exactly what you know. In the context of cryptocurrency, this can be illustrated, for example, as verifying that the user has the funds to transfer. And without revealing to the other participants of the network who this user is and how much money he has in his wallet.

Such proofs are technically complex and computationally intensive

Since it is very complicated, this technology did not come to any practical realization for quite a long time. And it was discussed mainly in scientific circles. But starting in 2010, researchers realized that ZK-proofs can be implemented on current computers.

So too with the emergence of faster computers and more funding for research in cryptography. And researchers, including Georgetown University associate professor Justin Thaler, have described how to generate zero-disclosure proofs on real computing machines. Thaler is also a researcher at a16z crypto, a division of the venture capital firm Andreessen Horowitz. He also manages four funds to invest in blockchain projects totaling more than $7 billion.

The launch and distribution of cloud computing has also given further impetus to the adoption of the technology. Laptops or smartphones, for example, are slower than the combined power of Amazon’s servers. But with ZK-proofs, a single computer can confirm that multiple computers have executed the program correctly.

When Bitcoin emerged in 2009, there was early discussion about reducing the computational burden on the blockchain and privacy in the blockchain. And then two problems emerged – the relatively slow performance of the blockchain because of its decentralized structure. And also its transparency, allowing analysts to identify and track wallets with ties to real users.

In 2013, a group of scientists, based on improvements in the implementation of ZK-proofs technology, laid out proposals for a Zerocoin solution. And which was supposed to help make Bitcoin transactions completely anonymous. Teaming up with Zuko Wilcox, they eventually launched the cryptocurrency Zcash (ZEC). It was probably the first implementation of ZK-proofs technology on a large scale.

Essence of ZK technology for cryptocurrencies

The essence of technology in the context of cryptocurrencies is not just about privacy. When Ethereum grew in popularity with the spread of blockchain technology. And more and more developers were creating more complex applications to run on it. But they, in turn, needed ways to increase the speed of applications. Ethereum, to simplify things a bit, is essentially a decentralized computer that runs relatively slowly.

Ethereum co-founder Vitalik Buterin has repeatedly said that it is solutions using ZK-proofs. And in particular the so-called ZK-rollups will help to increase the bandwidth of the network. And in the future will be integrated into its software code.

Zero-disclosure proofs allow one to prove the truth of something without checking each statement. Using this property, solutions such as zkSync “minimize”. That is, they compile and process transactions outside of the main Ethereum blockchain and prove that they did so accurately. Already then the main blockchain only verifies this proof. And that takes significantly less time compared to verifying each transaction in the usual way.

Dozens of startups are developing a flood of solutions using ZK, including the same zkSync, Aztec, Scroll, Starknet and others. They compete with another group of Ethereum scaling solutions collectively called Optimistic rollups. And the best known of which are the Optimism and Arbitrum projects. The companies have formed an entire industry within the crypto market and have collectively attracted several billion dollars from investors.

Accelerate Ethereum

On June 8, the Taiko project announced that it had raised $22 million to develop its own zkEVM. It is a solution that Vitalik Buterin called essential for scaling the Ethereum blockchain.

The zkEVM (Zero-Knowledge Ethereum Virtual Machine) is a development that combines Ethereum capabilities with the concept of zero-knowledge proofs. It was the company behind the zkSync solution that Matter Labs first deployed its version of zkEVM to the public along with the launch of the zkSync Era network.

The zkEVM solution is primarily a tool for scaling Ethereum. But which also includes privacy enhancing features. It combines the benefits of ZK-proof technology and compatibility with the Ethereum Virtual Machine (EVM) application environment. While providing faster, cheaper and simultaneously more private transactions.

Simply said, zkEVM allows developers to create second-tier solutions such as ZK rollups. This helps reduce congestion and bandwidth constraints on the core Ethereum network. And that leads to faster and cheaper transfers. The approach of projects like zkSync allows fast and inexpensive transactions in Ethereum. While maintaining data security and privacy.

Our experts point out that the slow operation of the network and high commissions hinder the mass spread of blockchain technology. Therefore, it makes sense for investors to support startups that offer efficient solutions.

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What to buy in the current market conditions

Our experts suggest a strategy for investing in the collapse of the crypto market and the actions of U.S. regulators

The Securities and Exchange Commission (SEC) has targeted two major trading exchanges at once. The lawsuit against Coinbase is informative primarily because it mentions a number of popular cryptocurrencies. And which the SEC calls securities. This is clearly a blow to the cryptocurrency market, which logically expects further developments not in the most positive direction.

At the same time, it should be noted that Bitcoin (BTC) reacted rather reservedly to reports of lawsuits against major cryptocurrency exchanges. This is largely due to the fact that holders of those altcoins, which were declared securities in the lawsuit against Coinbase. Then they rushed to withdraw some assets, but not completely leave the crypto market. But to redirect capital to Bitcoin as a more reliable digital asset. And this is a very smart investment idea in the current environment. The current rate of Bitcoin looks attractive enough to enter.

This is not a short-term investment, and it is unlikely that Bitcoin will go sharply up or down in the coming weeks. This is due not only to the regulatory uncertainty that has intensified since the SEC lawsuits. But also with the upcoming U.S. Federal Reserve meeting in the middle of the month, where most investors expect the key rate to remain unchanged.

So, entering Bitcoin now looks like a sensible and effective move for those who would like to increase their presence in the crypto market. But it is logical to be suspicious of possible problems with altcoins.

In addition to Bitcoin, it is worth taking a closer look at the tokens of decentralized crypto-exchanges. Which, clearly, against the backdrop of tighter regulation in the U.S. will experience an influx of new users and strengthen their presence in the global market. However, there is a risk that these tokens will also be classified as securities. So, the risks for altcoins are still quite high and we can expect high volatility.

Disclaimer:

Crypto-Upvotes does not provide investment advice. This material is for information purposes only. Cryptocurrency is a volatile asset that can lead to financial losses.

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SEC head Gary Gensler compared cryptocommunity to huckster and fraudsters of 20th century

Gary Gensler said that securities laws helped defeat financial fraud in the 1930s and will help the cryptocurrency industry today

Gary Gensler, head of the Securities and Exchange Commission (SEC), compared the cryptocurrency industry to the American stock market of the 1920s, full of “huckster and fraudsters”.

Speaking at the Piper Sandler Global Exchange & Fintech Conference on June 8, Gensler said that the passage of securities laws in 1933 and 1934 in the United States helped fight stock market scams. These same laws will also help “clean up” the cryptocurrency market.

“With widespread non-compliance with the law, it’s honestly not surprising that we’re seeing a lot of problems in these markets. We’ve seen this story before. It’s reminiscent of what we had in the 1920s before the federal securities laws were introduced. Hucksters, fraudsters, and Ponzi schemes. And the public was lining up in bankruptcy court,” said the SEC Chairman.

The solution, according to Gensler, is for cryptocurrency issuers and trading platforms to comply with securities laws. He said that the laws of the 30s allowed American securities markets to “flourish” for the next 90 years. And today’s “cryptocurrency securities markets” should also benefit from these laws. Therefore, they are no “less worthy of the protection” of those laws.

The SEC argues that most cryptocurrencies fall under the definition of securities. And even if the tokens have additional utility (which the cryptocurrency community cites to deny the regulator’s position). That doesn’t take “cryptocurrency is a security” out of the definition of an investment contract, Gensler said.

He explained that cryptocurrency exchanges must comply with securities laws. And including the requirement to separate “exchange, broker-dealer and clearing functions.” In his view, such separation “helps mitigate conflicts that can arise when such services are combined.”

Our experts note that two days earlier, speaking on CNBC on June 6, Gensler said that cryptocurrencies are essentially unnecessary. In his opinion, digital fiat currencies-the dollar, the euro, and others-are sufficient.

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EU calls for stricter rules on ads for cryptocurrencies in social networks

European Consumer Organization filed a complaint to the European Commission against popular social networks. And insists on controlling the promotion of crypto products at the EU level

The EU has called for stricter rules on advertising of cryptocurrencies in social networks. On June 8, the European consumer organization BEUC reported that it and its branches in nine European countries filed a complaint with the European Commission. As well as consumer protection authorities on Instagram, YouTube, TikTok and Twitter. For facilitating the misleading promotion of crypto-assets.

BEUC alleges that cryptomarketers on popular social networks are misleading users. And putting them at serious risk. And popular social networks allow the circumvention of rules prohibiting the promotion of unlicensed financial products.

The organization, which brings together 45 independent consumer organizations from 31 countries. Published a report titled “Hype or Harm? The Great CryptoAsphere in Social Media.” And in which it cites various evidence that cryptocurrency is being promoted on social networks. Which contradicts the platforms’ own advertising policy.

The document states that TikTok, Instagram, Twitter and YouTube are liable for not preventing misleading cryptocurrency ads from appearing in ads and influencer accounts. The BEUC also mentions so-called finfluencers (financial influencers). Who often pass themselves off as experienced traders.

The authors of the report point out that bloggers have become an important source of information for young audiences. Which, in turn, is more prone to buy cryptocurrencies without proper risk assessment than older generations.

According to this report, there is already a legal basis for action at the European Union level. This is the Unfair Commercial Practices Directive. And a body to guide enforcement called the Consumer Protection Cooperation Network (CPCN).

Our experts point out that the BEUC calls on the CPCN to require social networks to introduce stricter advertising policies. As well as to control the promotion of cryptocurrencies by Influencers. As well as to send reports to the European Commission on the effectiveness of the introduced measures.

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What is the Howey test. Why the SEC is evaluating cryptocurrencies by 1940s standards

Chief US exchange regulator equates cryptocurrencies with securities according to Howey test criteria list . Which were developed in the middle of the last century and uses this as one of the main arguments

The U.S. Securities and Exchange Commission (SEC), , is actively increasing pressure on the cryptocurrency industry. The main U.S. exchange regulator has already filed lawsuits against two major cryptocurrency exchanges. The agency is making a number of allegations against both exchanges. And the main one is the recognition of a number of cryptocurrency assets. Which are traded on the platforms as unregistered securities, falling under the competence of the regulator.

In the lawsuits, the SEC highlighted a list of crypto-assets on both exchanges, which collectively includes 19 coins. And several of them, including Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL), Sandbox (SAND), Decentraland (MANA), Algorand (ALGO), Axie Infinity (AXS), are listed in the charges for both venues.

According to the documents, they all fall under several of the agency’s designated criteria in one way or another. That’s pre-sale or fundraising. As well as promises to improve the project through continuous business development and marketing, the use of social networks to demonstrate the capabilities and benefits of the project.

The SEC uses the criteria of the so-called Howey test. This test, created by a 1946 Supreme Court decision. Which was related to the Florida citrus plantation deals. And is the basis of the SEC’s securities control authority. Which are considered “investment contracts.” And do not fall under familiar categories such as stocks and bonds.

Although the concept originated in the middle of the last century. But the SEC still applies it to actual assets, including cryptocurrencies. Because the U.S. has yet to develop a unified regulatory approach to crypto-assets. And it may be the one that ultimately forms the basis for cryptocurrency regulation.

Florida citrus plantations equated to cryptocurrencies

The Securities Act of 1933 lists financial instruments. Which fall within the definition of a security. And therefore within the scope of SEC regulation. They are stocks, bonds, bills of exchange, security-based swaps and more than a dozen other instruments. The document also cites the term “investment contract,” which arose as a result of a court decision related to the Howey test.

At the time, the SEC sued the W.J. Howey Company and Howey-in-the-Hills Service for selling citrus plantation lots in Florida to the public along with a service contract. Which gave Howey-in-the-Hills the right to lease and own the plots. Howey, with the necessary experience and equipment, remained responsible for growing, harvesting and marketing. The purchasers of the plots received a share of the profits.

Based on this arrangement, the commission accused Howey of offering and selling unregistered securities in violation of the Securities Act. The case went all the way to the Supreme Court. The judge concluded that these transactions clearly belonged to investment contracts under the Act. And introduced the very criteria that became known as the Howey test.

It includes four key elements that must be met to be considered a securities transaction.

1. investment of money. This can be any type of capital, such as cash, checks or current cryptocurrencies.

2. Joint venture. This means that the investor’s income is tied to the success of the entire venture. Not just the success of its individual investments.

3. a reasonable expectation of return. This means that investors must have a reasonable expectation of profit, either through their own efforts or the efforts of others.

4. Profits derived from the efforts of others. This means that investors must rely on the efforts of a promoter or third party to make a profit.

The Howey test is still used to this day by the SEC to determine whether certain financial products are securities. Some examples of assets and transactions that have been found to be securities under the Howey test. Also include initial coin offerings (“ICO”), tokenized assets, and investment contracts.

New guide to applying the Howey test to cryptocurrencies

The SEC has issued guidance on applying the Howey test to cryptocurrencies and other blockchain-based assets. The SEC has stated that many cryptocurrencies and tokenized assets are securities. Because they meet the four elements of the Hoey test.

One high-profile example is the case of the failed Telegram messenger ICO. That’s when Pavel Durov was able to raise a record $1.7 billion on the sale of Gram tokens to qualified investors. In 2019, the SEC filed a lawsuit against Telegram. And in doing so, claiming that Gram tokens are securities. Also that Telegram violated the law by conducting an unregistered sale of assets. In the complaint, the SEC also cited the Howey test. And argued that Gram tokens meet all four criteria of the test.

Another high-profile example is the case surrounding Ripple’s XRP token. In December 2020, the SEC filed a lawsuit against Ripple. In doing so, claiming that XRP is a security and that Ripple violated securities laws by conducting the initial sale of the tokens. And in its complaint, the SEC again cited the Howey test.

How projects try to bypass the Howey citrus test

Focusing on the U.S. market, crypto businesses are forced to consider the Howey test. Now some projects are calling their assets a governance token. Which is used to vote the decentralized autonomous organization (DAO) created under the project. However, such tokens are also traded on cryptocurrency exchanges. And are valued in the billions of dollars, so it remains to be seen. How regulators will behave towards them in the future.

Many projects offer their tokens only outside the US. In doing so, they restrict U.S. users from trading or participating in token giveaways (airdrops). Some blockchain services reach an agreement with the SEC. In doing so, they often pay significant fines if their asset is found to be a security.

Our experts note that Coinbase, meanwhile, intends to defend its position. It filed a countersuit against the SEC. In doing so, intending to obtain clear rules from the regulator for dealing with crypto-assets. The platform has openly stated that it has no plans to delist tokens. Which the SEC considers to be securities and wind down staking services. According to Coinbase, the company has more than $5 billion on its balance sheet to maintain operations. And to pay legal fees.

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Large market maker Cumberland withdrew from Coinbase and Binance almost $70 million of assets

Cumberland withdrew $46 million in Ethereum, 23 million BUSD and other coins from leading cryptocurrency exchanges

Cumberland, one of the largest cryptocurrency market makers, withdrew about $70 million from Coinbase and Binance exchanges in the last two days. The company took $46 million in Ethereum, 23 million BUSD ($23 million). As well as other coins after it became known that the Securities and Exchange Commission (SEC) sued the two exchanges.

Cumberland is a subsidiary of Chicago-based trading firm DRW, created in 2014. It provides liquidity on leading centralized and decentralized crypto exchanges.

Cumberland took about 20,000 ETH ($37 million) from the Coinbase exchange and 4.85,000 ETH ($9 million) from Binance, according to analyst service Lookonchain.

In addition to Ethereum, Cumberland withdrew other cryptocurrencies, analysts noted. Among them were tokens Axie Infinity (AXS), Shiba Inu (SHIB), Compound (COMP), Chainlink (LINK), Curve DAO (CRV) and Aave (AAVE).

A week earlier, in late May, Cumberland stopped trading Firecoin (FIL) because the SEC classified the cryptocurrency as a security token. That is, assets that fall under the definition of securities.

A security token is a crypto-asset that represents a certain amount of ownership of something. For example, part of a company. They can be issued by a business or government and serve the same purpose as securities (stocks).

In addition, Nansen data shows that Cumberland has withdrawn more than 23 million BUSD from Binance in the past 24 hours, noted cryptojournalist Colin Wu. The market maker transferred them to Paxos, the company that issued the stablecoin. The firm has been banned from issuing new tokens, but it continues to redeem old ones.

It also became known that Robinhood will review its work with some cryptocurrencies.

Our experts note that Robinhood provides users with access to 18 cryptocurrencies. These include Solana (SOL), Cardano (ADA) and Polygon (MATIC). These have now been called unregistered securities by the SEC in lawsuits against cryptocurrency exchanges.

 

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How SEC policy will affect Ethereum

The U.S. regulator named securities as the closest competitors of Ethereum. Our experts told us what risks this brings for ETH

From June 5 through June 6, cryptocurrency rates reacted to the SEC’s lawsuit against two major exchanges with a dramatic drop. Bitcoin and other cryptocurrencies fell in price, but by the morning of June 7, they partially recovered their losses. Ethereum was no exception and on June 6 updated its low from May 25 at $1802.

In lawsuits against two major exchanges, the SEC named several cryptocurrencies as securities. These assets reacted with fall of rates more strongly than others and fell in price by 6-15%.

In the first lawsuit were called securities: Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL). As well as Cosmos (ATOM), Sandbox (SAND), Decentraland (MANA). And Algorand (ALGO), Axie Infinity (AXS), COTI (COTI).

In the second lawsuit, Chiliz (CHZ), Flow (FLOW), Internet Computer (ICP) joined them. As well as NEAR Protocol (NEAR), Voyager VGX (VGX), Dash (DASH) and NEXO (NEXO).

Despite the fact that the commission named Ethereum competitor coins (e.g., Solana), the largest ETH itself avoided a similar fate. None of the lawsuits mentioned it as a security.

Why the SEC chose the cryptocurrencies it named in the lawsuits

The SEC sampling algorithm is completely incomprehensible. And it defies logic, our experts note. Either the initiators of this process have outdated data. Even from the time of PoW mechanism in Ethereum network (till September 2022). Or it’s a “show punishment” for trading “tokens nobody needs,” says our expert.

SEC head Gary Gensler told CNBC that cryptocurrencies are essentially unnecessary at all. “We already have a digital currency. It’s called the U.S. dollar, the euro or the yen,” Gensler said.

The very arguments of the U.S. regulator regarding the recognition of PoS and DPoS (validators, not miners) projects as securities are “ridiculous.” But in the moment, these accusations can “create panic among investors” and provoke a local price collapse.

Long-term prospects for Ethereum are positive

If we consider the long-term prospects of Ethereum. It has much more growth potential than even Bitcoin. Because BTC’s growth comes from its status as the first cryptocurrency. As well as popularity and scarcity, which led to the leading position in infrastructure development.

For ETH the main growth driver is the area of decentralized finance (DeFi), says our expert. DeFi is still in its infancy. And in the future it will be able to push the price of ETH, which provides the infrastructure for DeFi projects.

Short-term ETH prospects

For short planning horizons on Ethereum, things are very complicated. Our experts note that on the one hand, Ethereum benefited from the fact that it was “forgotten to be mentioned” in the lawsuits.

But on the other hand, if ETH will be “remembered” later. It could repeat the fate of those coins that are already on the SEC list. As some investors exit from these coins, the assets are rejected by the platforms. Therefore, the risks remain, our Crypto Upvotes expert warned.

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Trading volume on major DeFi-platforms up 180% in two days

Total daily volume of trading on 3 leading decentralized exchanges increased by $950 million in 48 hours

Average daily trading volume on the three largest decentralized exchanges (DEX) has jumped 180% in the past 48 hours, according to CoinMarketCap. Trader activity on centralized exchanges (CEX) has also increased.

Trading volume on Uniswap v3 (Ethereum) rose from $322 million to $999 million, and on Uniswap v3 (Arbitrum One) from $152 million to $322 million and on Curve (Ethereum) from $54 million to $157 million. These three exchanges account for 55.6% of total DEX trading volume in the past 24 hours. Within two days, their total trading volume increased from $528 million to $1.47 billion (180%), an increase of $950 million.

At the same time the trading volumes at 12 large centralized exchanges also remained at maximum values for the second day in a row over the last month. As of the morning of June 6 it reached $105 billion (the highest since April 28), while on the morning of June 7 it was $97 billion, according to Coinglass. During the last month, volumes have only twice reached $100 billion. And on average, they have ranged from $30 billion to $80 billion.

The surge in exchange activity comes as the U.S. exchange regulator has begun litigation against leading cryptocurrency exchanges.

Our experts note that currencies reacted with a sharp drop. But by June 7, they had recovered to the marks where they were before the reports about the filing of lawsuits by the SEC.

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