SEC filed a lawsuit against Ian Balina, a famous member of cryptocurrency community. The lawsuit states that all Ethereum blockchain transactions take place in USA territory

The Securities and Exchange Commission (SEC) claims that transactions on Ethereum are made in United States. Because blockchain validators (network nodes) are clustered more tightly in the United States than in any other country. This claim was made in a lawsuit against famous member of cryptocurrency community Ian Balina.

The lawsuit was filed Monday, Sept. 19. Balina is accused of breaking law while promoting Sparkster Cryptocurrency ICO (SPRK) in 2018. Which raised about $30 million from 4,000 investors.

This is not the first time the agency has initiated such litigation. However, paragraph 69 of this lawsuit states : ” At that point, their ETH contributions were validated by a network of nodes on the Ethereum blockchain,
which are clustered more densely in the United States than in any other country. As a result, those
transactions took place in the United States.”

According to Etherscan, more than 46% of all Ethereum nodes are now operating in the US.

What this means for Ethereum

Our experts think that mentions of transaction processing by US-based nodes in a lawsuit against blogger Ian Balina. It can also be interpreted as the SEC  attempt to extend its jurisdiction over any transactions in Ethereum network according to geographical principle. And in the future, this could become a precedent and reinforce the current fears of transaction censorship. Which have arisen since sanctions were imposed on Tornado Cash mixer.

Following the Ethereum move to Proof-of-Stake. And given its high level of centralization, Coinbase, Kraken and Binance are estimated by Nansen to account for 30.25% of ETH blocked in stacking. The U.S. government could seriously consider bringing this space under its control.

In future case law, similar lawsuits from the SEC may await other cryptocurrencies. Which work on the Proof-of-Stake algorithm.

Our experts talked about chances of ETH becoming such an asset after the network update. As well as to what implications this may lead to

The migration of Ethereum from PoW (Proof-of-Work) to PoS (Proof-of-Stake) is complete. Among the possible threats is not only the loss of part of the community represented by miners. But also the risk of recognition of ETH as a security with stricter regulation.

Thus, head of the U.S. Securities and Exchange Commission (SEC) Gary Gensler once again said. That vast majority of cryptocurrencies qualify as securities. And are subject to the relevant laws. Companies that conduct transactions in the cryptocurrency market. Are required to register with the SEC, just like other market brokers.

However, the position of the SEC has not been fully clarified. The agency has expressed its willingness to interact with the U.S. Commodity Futures Trading Commission (CFTC) on this issue. Because control over virtual asset service providers (VASP) could be passed on to the second of these regulators. That, in turn, would lead to the recognition of leading cryptocurrencies as commodities.

Recognition of ETH as a security would be a disaster for ordinary users. If that happens, the token would likely face large fines. Which ETH may not survive. As well as delisting from 90% of centralized exchanges. This will cause irreparable damage to both user base. And also price, which is likely to go down sharply.

Specific coins that are being considered as candidates for recognition as securities include. Such as Ripple, Stellar (XLM), Zcash (ZEC) and Horizen (ZEN) could include Ethereum in the near future.

Probability of recognition of ETH as a security

Recognition of Ethereum as a security seems unlikely. However, after moving to Proof-of-Stake algorithm, chances for recognition of such status can definitely become higher.

Our experts explain that Howey Test serves this purpose. According to this test, an investment contract is “an investment of money in a common enterprise with a reasonable expectation of profit solely from the efforts of others.” Regarding Ethereum, blockchain coins can be recognized as “money.” And a “common enterprise” is a system of validators in stacking. And the “expectation of profit” is rewards from stacking.

However, our experts pointed out that Ethereum still does not “risk” to move into the category of securities. SEC head Gary Gensler said he would support a bill that would give the CFTC a right to supervise BTC and ETH. In case such law is passed, ETH will actually receive a status of “exchange commodity” officially.

Also our experts say that on another hand, in this case all tokens on Proof-of-Stake can be considered as securities. And regulated in the same way as shares, which is unlikely.

EthereumPoW supporting mining concept will start working after main network upgrade

EthereumPoW (ETHW) team has announced plans to launch a blockchain. Which will support mining, within 24 hours after main Ethereum network moves to Proof-of-Stake protocol.

Ethereum update is expected to take place on September 15 and will mean the end of ETH mining. And part of participants support stacking concept proposed by developers. And the other part remains committed to a version of network based on mining.

EthereumPoW project was initiated by famous Chinese miner Chandler Guo. Who announced development of a hardfork back on July 27 of this year. This is not the first time he has supported the preservation of old Ethereum. In 2016, when hardfork resulted in Ethereum Classic (ETC). And here as well, Chinese miner was the main supporter of its creation.

At the time of launch, EtherumPow will make public final code, program files, system configuration, node data, and other information about the blockchain. EthereumPoW will first launch 2048 empty blocks. This will ensure a successful switch to new network. And prevent duplicate blocks on ETH and on ETHW.

Some crypto exchanges have already supported PoW trading of Ethereum tokens. Poloniex and MEXC have announced launching ETHS and ETHW trading. And BitMEX has launched a futures product based on ETHPoW tokens.

DAXA Alliance, which includes leading Korean crypto exchanges Upbit, Gopax, Bithumb, Coineone and Korbit. They also announced support for PoW version of Ethereum after blockchain update.

“The Merge” update – this update will mean the merger of Beacon Chain and the main Ethereum network. Which are currently operating separately from each other. This will end the use of Proof-of-work algorithms in Ethereum. And will start era of new Ethereum technology based on Proof-of-Stake technology.

Five of Korean largest crypto exchanges, united in DAXA alliance. Decided to support Merger of Ethereum and airdrop new tokens

DAXA alliance, which includes leading Korean cryptocurrency exchanges. Announced support for PoW version of Ethereum after blockchain update, decenter.kr reported. Platforms are considering listing and delisting the new asset, as well as its airdrop.

DAXA alliance, created in June this year, united 5 largest South Korean exchanges: Upbit, Gopax, Bithumb, Coineone and Korbit. So far, apart from a statement of support, no action has been taken. But our sources confirmed that the exchanges will try to avoid loss of assets by their customers.

Updating Ethereum blockchain will consist of two phases. The first will be an update called Bellatrix, which began on September 6. If it is successful, “Paris” update will be launched. As a result of this update, a split (hardfork) of network is possible. ETH could split into PoS-version (new) and PoW-version (old). If this happens, two Ethereum tokens will arise, for each version of their network.

Earlier, other crypto exchanges have already supported trading in such tokens. Poloniex and MEXC announced launching ETHS and ETHW trading. And BitMEX has launched a futures product based on ETHPoW tokens. Binance also announced that it will consider supporting new Ethereum tokens.

Currently, Ethereum network is facing a problem after a Bellatrix update. Blockchain has seen a noticeable spike in the “number of missed blocks” – the rate at which network does not process blocks of transactions assigned for verification. That rate has increased by about 1,700%. Before this update, this rate was about 0.5%. And after Bellatrix, it jumped to 9%.

Binance announces measures to protect customer funds in case of ETH network hardfork

Cryptocurrency exchange Binance will suspend withdrawals and deposits of ETH and ERC-20 tokens during the “Merger” (blockchain’s migration to Proof-of-Work protocol). In an official announcement, platform team announced measures. Which will be taken to minimize trading risks. And to protect customer funds in case of a split network and the emergence of a second Ethereum token.

Deposit and token withdrawal transactions will be suspended on the platform on September 6 during the Bellatrix update. And also on September 15 during the Paris update. The exchange will suspend Binance Crypto Loans. As well as ETH margin borrowings between September 14 and 16.

Spot trading of ETH and ERC-20 will not be affected during Ethereum update. However, Binance has drawn attention to the risk of increased volatility in the event of a hardfork. And reserved the right to suspend margin trading.

In the case of network splitting and new ETH token emergence. Binance will use ETH ticker for PoS Ethereum chain. Withdrawals for another version of token will be supported. But distribution details will be covered in a separate announcement.

Coinbase will suspend Ethereum operations during the “Merger” of network

Cryptocurrency exchange Coinbase announced in its blog. That new deposit and withdrawal transactions in ETH and ERC-20 tokens will be temporarily suspended on Coinbase during Ethereum Merge (blockchain update). Transactions launched before the suspension will also be temporarily delayed.

Coinbase team stated that this will be done as a precautionary measure. To ensure that customer funds are protected. Once the update is complete, processing of suspended transactions will be restarted.

“Merger” is tentatively scheduled for September 15. Customers of Coinbase Prime and Coinbase Exchange services may encounter delays in withdrawals. That’s why Exchange recommends customers to withdraw funds in advance, if necessary.

Users of Coinbase Wallet with ETH and ERC-20 tokens. As well as NFT or DeFi products of Ethereum network, this update should not affect them.

Our experts recommend withdrawing the necessary funds from CEX exchanges in advance. Or convert them to other cryptocurrencies at the time of ETH network update.

Resorts in Soneva hotel chain can now be paid for in Bitcoin or Ethereum, review by our experts Crypto-Upvotes

Resort chain Soneva hotels in Thailand and the Maldives are now accepting payments in Bitcoin and Ethereum. Cryptocurrency payment provider TripleA and payment platform Pomelo Pay are helping to make payments.

The cryptocurrency payment option will be available at Soneva Fushi hotels. As well as Soneva Jani and Soneva in Aqua in Maldives. And in Soneva Kiri in Thailand. Also for Bitcoin and Ethereum it is now possible to buy real estate in the Maldives at Soneva Villa Ownership.

The resort network can directly book rooms. And pay with cryptocurrency through a secure link. In addition, you can use a QR code to pay in cryptocurrency. Soneva adds that while any payments made using Bitcoin or Ethereum are 100 per cent non-refundable, credits can apply in line with its flexible cancellation policy.

“At Soneva, we have always endeavoured to be a pioneer in the hospitality industry, hence accepting cryptocurrencies as a payment method is another example of enabling our international guests to easily make payments from anywhere in the world,” said Bruce Bromley, chief financial officer, and deputy CEO of Soneva.

Our experts told about its effect on cryptocurrency market “Merger” of Ethereum , and what will happen if it fails.

According to Ethereum developers’ plans, the blockchain update, also known as The Merge. Or Ethereum 2.0, is planned for second half of September. It is aimed at improving the efficiency and scalability of their network.

The speed of transactions in the network will increase to 100,000 TPS (transactions per second). It is now around 15 TPS, according to analytics platform Kaiko. The update will also improve Ethereum’s protection against coordinated attacks. Such as the 51% attack. In which, the person who controls most of the network. Can forcibly make fraudulent changes.

Phase 0 of the Ethereum 2.0 update, the Beacon Chain, was launched on December 1, 2020. Phase 0 began the blockchain’s transition to a proof-of-stake (PoS) algorithm. Its full implementation will mean the end of ETH mining.

Networks such as Ropsten and Sepolia have already switched to the new protocol. And on the morning of August 11 developers have successfully completed Goerli’s latest testnet upgrade. The tentative start date for the main network migration is September 19.

The cryptocommunity suggests that a bifurcation of the blockchain may occur during the “Merge” process. In this case, two parallel networks will emerge, each of which may have its own ETH token. Also, an update failure cannot be ruled out. These events could have an impact on the cryptocurrency market and token rates. Since the market was sensitive to Ethereum price changes after the completion of test updates.

Increased uncertainty in a crypto market

A failure of the transition to ETH 2.0 is unlikely. As all current updates in test networks are successful. In the worst case, the timing of the transition can be shifted, but not the refusal of the update and not its failure.

That said, the risks of a fork of ETH with a split into two coins, PoW and PoS, have increased in recent weeks. In the case of a fork, the PoW version of ETH will be more in demand at the expense of miners for the first time. Because of the continued ability to mine and accumulate tokens. However, in the long run, the PoS version will be more interesting for investment.

Splitting the network is not dangerous in terms of problems for the team and Ethereum project. But it could lead to uncertainty in cryptocurrency market. For example, it is unclear how long it will take to stabilize tokens, networks, exchanges and wallets. Which will have to account for not one, but two new protocols and two tokens.

Possible temporary collapse of Ethereum price

The market is already pricing in an option with a possible Ethereum upgrade. When the blockchain completely moves to the POS algorithm, there will not be any immediate reaction. If everything is “good and positive” with the market. Then ETH exchange rate will go up one way or another.

If the update will fail or will be postponed. Most likely there will be a local temporary dump of ETH price.

Ethereum has a lot of potential, especially after moving to PoS. There will be additional interest in it. Users will start investing in ETH to create nodes and get extra income from it. Our experts also said that it will open a road for institutional investors. And Ethereum itself will become more environmentally friendly due to the fact that less electricity will be used to mine it.

Poloniex and MEXC began trading ETHW and ETHS tokens in anticipation of Ethereum updates. And BitMEX launched trading in futures contracts.

Three crypto exchanges have supported trading of tokens that may become available after hardfork Ethereum. Last week, Poloniex and MEXC announced the launch of ETHS and ETHW trading. And on August 8, BitMEX launched a futures product based on ETHPoW tokens.

Poloniex and MEXC allow Ethereum holders to exchange their cryptocurrency for ETHS and ETHW at a 1:1 ratio. These tokens function like derivatives and allow users to trade blockchain assets that have yet to launch.

On these exchanges, ETHS trades at a price close to Ethereum, while ETHW is much cheaper and trades in the $125-130 range.

In case two blockchains are formed. Then these exchanges will support the holders of both tokens.

If the ETH 2.0 update is completed without a blockchain fork. The cryptocurrency will keep its previous name ETH. In this case, Poloniex and MEXC will suspend and exclude ETHS, ETHW and related markets.

Our experts also noted that сryptocurrency exchange Binance has also announced that it will consider supporting new Ethereum tokens. Binance team has announced support for the upcoming Ethereum update. However, it warned that all new hardfork tokens will undergo the same strict verification process before listing on Binance as any other coin.

Our experts have analyzed possible changes in ETH price. And paid attention to factors which can lead to growth or decline of ETH in the near future.

Our experts believe that of all cryptocurrencies, Ethereum will make maximum profit by the end of this year. We predict 4 possible scenarios for ETH price as of March 31, 2023. In these possible scenarios, we consider two factors. These are the change in Fed rates and the Ethereum “Merger” ( blockchain’s transition to a new protocol) planned for September.

Scenario 1: Fed reversal (change of regulator’s policy towards lower key rate) and successful “Merger” of Ethereum. according to our experts, this is most likely scenario, with the target price of ETH at $5,000.

Scenario 2: Fed does not change policy, but ETH “Merger” is successful. In this case, expected price of cryptocurrency is about $3,560

Scenario 3: Fed does not change policy, “Merger” of ETH goes unsuccessfully. In such a case, we forecast a price equal to recent lows around $1,000.

Scenario 4: There is a reversal of Fed policy, with the “Merger” failing (ETH network will continue to operate as it does today). In this case, the price of ETH will be $1.6k.

There are all preconditions for these scenarios, but there is no guarantee that it will happen.

At this moment, both futures curves, money markets, and surveys of leading economists are signaling that the key rate hike will peak in December and January, and the start of FED policy easing will begin in March at best.

FED will raise rates in September by 0.75% and the market will refocus its expectations for a peak rate hike in March 2023. In that case, Ethereum could hold in a $1K-$1.7K range closer to a lower line.

Only after that by the end of the year a Merger factor will be triggered. And there will be prospects for the end of the cycle of tightening of monetary policy. And more headlines about Web3 and ETH will start to appear in the media. Then there will be more reasons to realize optimistic scenarios with Ethereum price returning to $3.5k – $5k.

Crypto-Upvotes experts told about investments in ETC and estimated probability of miners’ transition to Ethereum Classic mining

Cryptocurrency Ethereum Classic (ETC) shows significant growth. Having risen by 45% in the last month alone. On July 28, ETH reached $34, gaining more than 23% in one day. Ethereum Classic is currently ranked 20th in cryptocurrency capitalization at $4.61 billion with a daily trading volume of $5.26 billion.

Rise in price of coin began after announcement that main Ethereum network will switch to new operation protocol (Proof-of-Stake) at the end of September. This transition will mean the end of ETH mining. Due to this event, and because Ethereum Classic blockchain uses the same mining algorithm. All ETH miners can start migrating to ETC.

Ethereum Classic cryptocurrency appeared in 2016 as a result of a hard fork of main Ethereum network. Because reason for blockchain forking was hacking of DAO investment project. And the theft of about 3.6 million Ethereums from it, which at that time amounted to about $60 million. Developers of Ethereum Foundation project conducted a blockchain split to compensate for losses.

Interest of big players grows in ETC

Ethereum Classic began to appreciate after announcement that ETH will switch to Proof-of-Stake (PoS) in fall. Ethereum Classic will remain its only major blockchain with smart contracts after main network switches to a different algorithm. Which run on classic PoW and Ethash mining algorithm.

Miners will migrate to the ETC network because of specific ASIC chips. Migration of miners will theoretically strengthen security of Ethereum Classic network, which has been attacked several times. Developers of fork are counting on growing interest of smart contract owners, who will not want to migrate to PoS.

ETC has been showing growth for the last few days. It is very likely that the volumes we are now seeing from the big players and companies. Who are buying up the asset in order to further hold on to it.

Our Crypto-Upvotes experts have noticed that mining pool Antpool. Which is affiliated with mining equipment maker Bitmain. It has invested $10 million in Ethereum Classic ecosystem. It also intends to accept accept ETC for payment for its products. Our experts say that in bull market ETC price with support of corporations can go up to $100+.

What will be effect of Ethereum move to POS for ETC

For holders of large scale crypto farms, ” classic” PoW algorithm is more profitable. Than new PoS, to which Ethereum main network is migrating. Traders take into account in their estimates of cryptocurrency that transition to PoS in Ethereum Classic is not planned and mining in this system will be profitable for all major mining players.

It’s too early to talk about mass transition of miners from Ethereum to Ethereum Classic. But interest in ETC has clearly emerged. This is evidenced by the local maximum hash rate of Ethereum Classic network. In any case, the vast majority of GPU miners will stay on ETH until its transition to PoS.

Ethereum and Ethereum Classic mining has clear advantages over BTC mining. Because net profits are higher due to lower power costs compared to ASIC equipment, especially during a bear market.