Crypto Regulations: SEC Warns More Charges Coming Against Crypto and DeFi Exchanges

Leonardo Perez
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Crypto Regulations: SEC Warns More Charges Coming Against Crypto and DeFi Exchanges

According to David Hirsch, head of cryptocurrency enforcement at the SEC, the recent crackdown on Coinbase and Binance is just the tip of the iceberg.

Hirsch spilled the beans and revealed that they are currently on the prowl, investigating other exchanges and DeFi platforms that might be tiptoeing around legal boundaries. It’s not just the big names that have caught their attention: they have a whole list of suspects.

What is the SEC Planning?

The SEC’s Cyber ​​and Crypto Assets Unit, led by Hirsch, is working tirelessly to ensure everyone follows the rules in this rapidly evolving space. So if crypto stock has declined, what’s coming next is even worse.

Hirsch said the SEC will cover all brokers, dealers, and clearing agencies in the crypto space. All entities under the jurisdiction of the SEC must comply with regulatory obligations, including registration and disclosure. This includes DeFi projects, which show a comprehensive application approach.

While addressing the Securities Enforcement Forum Central in Chicago on September 19, he stated the following:

“We are going to continue to be active in terms of intermediaries, they can be brokers, traders, exchanges, clearing agencies or anyone else who is active in this space, is within our jurisdiction and does not comply with their obligations, whether through registration or for failing to provide adequate or complete disclosures.”

Hirsch revealed that the agency is currently investigating several companies involved in activities similar to those seen at Coinbase and Binance. That is, trading assets considered securities without proper authorization from the regulator. In this sense,

Hirsch highlighted that the industry’s compliance violations go beyond these two organizations. In addition to Coinbase and Binance, the SEC also has open proceedings against Ripple and its executives over XRP. “We will continue to make these accusations,” Hirsch said without elaborating.

The SEC has traditionally sought settlements with regulated companies, typically large companies, to resolve regulatory violations. However, today, when charges can have a significant impact on the existence of companies, the SEC is more inclined to pursue litigation. Hirsch acknowledged that the SEC’s resources are limited, limiting its ability to address each token or platform directly.

Clamping Down on SEC’s Dexterity in DeFi Projects

Recently, regulatory bodies such as the SEC and CFTC have made it clear that they consider DeFi within their authority. In 2022, the CFTC took legal action against Ooki DAO, resulting in its operations being discontinued. However, the CFTC also settled with three DeFi platforms in September 2023, which had ties to associated companies. Additionally, the SEC issued a subpoena to SushiSwap this year, although no charges have yet been filed and associated companies could be a direct focus.

On September 19, Ripple lawyer John E. Deaton posted the following on X:

“Mark my word, @SECEnfDirector  along with @GaryGensler  and this Crypto Chief, David Hirsch, are going to lose the long game because they don’t have the most important and necessary thing on their side: the law. Btw, what happened to the SEC’s former Crypto Czar, Valerie Szczepanik?”

Deaton, a vocal critic of the SEC, believes that the commission’s regulatory stance is legally questionable. As the SEC continues its enforcement efforts, questions are being raised about its ability to prevail in cases against the industry.

By Leonardo Pérez

Elon Musk Allegedly Has Big Financial Plans for X, aka Twitter

Audy Castañeda
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Elon Musk Allegedly Has Big Financial Plans for X, aka Twitter

Musk will reportedly build a stock and cryptocurrency trading platform within its walls.

Elon Musk, the South African billionaire behind successful companies like Tesla and SpaceX, has big plans for Twitter, which he recently renamed “X.” He wants to make the social media platform the ultimate financial giant, reportedly building a stock and cryptocurrency trading platform within its walls.

Elon Musk Is Potentially Turning X into a Financial Powerhouse

The news comes after leaked documents suggesting Musk received financial data from anonymous vendors requesting quotes for financial content, real-time stock data and other features. The request for proposals said the following:

“Real-time information is a powerful force, especially in the world of investments. Twitter’s real-time public platform has become the heart of the financial community.”

Musk says he knows nothing about these proposals or the plans behind them, though it’s unclear whether he really has no idea what’s going on or if he’s trying to keep his goals secret for the time being. He said in a separate discussion, “as far as i know, this is not being worked on.”

An e-Toro representative, whose name remains anonymous at press time, made the following statement:

“X is an increasingly important part of the DIY investment community. We are very excited to see how X will develop and are in close contact with the team around future projects.”

Louis Schoeman, CEO of Forex Suggest, also added his two cents and said the following:

“Cryptocurrencies are now a basic part of the financial world, so their inclusion as a payment option for the new twitter platform would make a lot of sense. in April this year, Musk measured that DogeCoin payments could come to twitter when he suggested that DogeCoin could be a payment option for the platform’s premium service, Twitter Blue. The fact that Tesla already accepts DogeCoin payments in its online store sets a precedent for its inclusion in other parts of Musk’s business empire, with X being the next logical step in that process.”

Elon Musk Considers Charging a Fee for Using X (Twitter)

Musk, owner of X (formerly Twitter) has opened the door to charging for the use of the social network. The American businessman assured on Monday that establishing a monthly fee would be a formula to fight bots.

The social network already offers a payment plan called X Premium that costs $8 per month. Subscribers to the service, which was previously known as Twitter Blue, can request verification of their accounts to display the double blue check mark. Additionally, they are eligible to receive advertising revenue if they have achieved at least 15 million impressions on their posts in the last three months and have at least 500 followers.

Doge’s Love Continues

Prior to this, Musk has hinted that he wants to make X the ultimate super app with its own financial capabilities. He even (briefly) changed his X profile photo to the DogeCoin logo, a testament to his long-standing love for the asset. He has toyed with the idea (on several occasions) of making DogeCoin the official payment tool of X and has even referred to it as the “people’s cryptocurrency” in the past.

This behavior is very different from what has been shown regarding Bitcoin, which at one time was going to be allowed among car buyers looking to take home new Tesla vehicles. However, he quickly overturned this decision when he suddenly became concerned about energy use in the mining sector.

By Audy Castaneda

Bitcoin Dominance Returns Above 50% as Altcoins Meet Resistance

Leonardo Perez
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Bitcoin Dominance Returns Above 50% as Altcoins Meet Resistance

Bitcoin remains as the leading and most recognized digital currency.

With a market valuation of nearly $520 billion and a current price of $26,690, Bitcoin has regained the spotlight. It now represents more than half of the entire cryptocurrency market.

This inflection point is important because it occurs at a time when many alternative cryptocurrencies are stagnant or in decline. However, Bitcoin is still almost 5% below its June high and 23% below its January 2022 high, despite the recent rally.

Looking at the market more broadly, the alpha coin’s market dominance ranged between almost 40% and 49% for over two years before it finally reached the 52% level in June when asset manager BlackRock’s call for a spot BTC exchange-traded fund broke out.

Bitcoin Could Be in a Volatile Crypto Landscape

Whales’ interest in Bitcoin was also increasing. The number of addresses with significant cryptocurrency holdings reached new highs. Both positive and negative market effects can be derived from this trend.

A crucial crypto indicator, the BTC “dominance” index, assesses its strength by comparing its market value to that of the entire crypto market. In early 2022, Bitcoin’s market share exceeded 50%, but declined in the summer as altcoins like NFTs and DeFi grew in value.

Dominance is important because it can capture changes in market value, which can occur quickly as a result of changes in price or trading volume. It demonstrates how cryptocurrency investors are responding to current events and also whether BTC is losing ground to stablecoins or NFT tokens.

The cryptocurrency market is currently experiencing a major liquidity crunch as the lack of a potential Bitcoin upward move continues to disappoint investors. The leading cryptocurrency saw a rapid pullback following a 2% rise in its value last night as it failed to hold support at the $26,000 level.

One Step Forward, Two Steps Back for Bitcoin

Bitcoin price tried to break through the round number of $27,000, but the sellers are still present. In fact, the price is currently moving. $26,800 And finally stagnates in 24 hours:

In one week, BTC price shows an increase of 4%. In three months, BTC fell by more than 7%. The BTC/ETH pair stagnated for a week and shows an increase of almost 5% in a month.

Yesterday the price was locked at the resistance level at $27,300. The sellers managed to push the price back to the support level at $26,700. Buyers must defend this support level to avoid returning to $26,000.

For a week, the price has shown momentum with rising lows and highs, we must continue. The RSI also continues to show rising lows and highs on the other side of the downtrend line. The buyers have the momentum in their hands.

Remaining Resilient and Popular

Bitcoin has proved its propensity to see significant increases during periods of market declines. It remains the leading and most recognized digital currency.

Meanwhile, investors are bracing for a possible drop in Bitcoin’s value in September, a historically difficult month for the cryptocurrency. This cautious outlook is reinforced by the growing chances of a global economic slowdown and persistently high inflation.

However, some analysts believe that BTC could see a major price increase, often called a bull rally, due to an expected influx of new investments. This surge could help Bitcoin maintain its dominance in the highly stacked crypto market.

By Leonardo Pérez

VanEck Bullish on Institutional Investments in Bitcoin

Audy Castañeda
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VanEck Bullish on Institutional Investments in Bitcoin

According to VanEck, institutional investors own approximately $50 billion worth of Bitcoin (BTC) spread across ETFs, countries, and companies. The investment fund confirms that Bitcoin improves portfolio profitability with minimal risk, anticipating an increase at the 2024 halving. VanEck, along with Fidelity, Invesco, Bitwise and BlackRock, await the approval of a Bitcoin spot ETF, which could create a $100 billion market.

Institutional investors are all those institutions that trade cryptocurrencies to gain profits. In most cases these are private institutions, but since 2021, with the adoption of Bitcoin as legal tender in El Salvador and the Central African Republic, public institutional investors are also joining.

Institutional investors are often called whales, as they have portfolios with a great value in cryptocurrencies and that move the “wave” or the trend. Buying a whale can drive up the price of a cryptocurrency in seconds and create FOMO, while a sell can cause a big drop and a lot of FUD.

A new report from investment manager VanEck claims that institutional investors own approximately $50 billion of the Bitcoin currently in circulation.

Holdings are spread across ETFs, countries, and public and private companies, even as investors await approval of a spot Bitcoin ETF.

VanEck: Bitcoin Can Improve Profitability with Minimal Downside

According to the investment firm, hedge funds and asset managers are beginning to view Bitcoin (BTC) as an effective portfolio diversifier due to its potential to hedge against inflation.

Unlike gold, Bitcoin’s immutable transaction history makes it less susceptible to fraud, while its ability to be broken down into smaller units makes it a superior form of payment.

VanEck also confirmed that Bitcoin improved returns without significant risk in the portfolios, with 40% allocated to bonds and 60% to stocks.

The company expects the asset’s price to rise before and after the spring 2024 halving, a process that reduces the amount of Bitcoin released for each successfully mined block. The new Bitcoin RGB Layer 2 update will improve the network’s utility by allowing investors to tokenize bonds and other assets using the existing Bitcoin network structure.

Earlier this year, Citi predicted that the tokenization of assets in private markets like real estate would increase 80-fold by 2030. Tokenization digitizes assets that buyers and sellers can exchange via blockchain.

So far, most projects have settled asset transfers through Blockchains, which are permissioned rather than public networks such as Bitcoin.

Bitcoin Timely Approval Could Threaten Futures ETFs

VanEck operates a Bitcoin futures-based exchange-traded fund with approximately $44 million in assets under management.

The US Securities and Exchange Commission has yet to approve a US BTC Spot ETF. Analysts believe that it will be preferable to a futures fund to hold Bitcoin for longer periods.

VanEck has joined several Wall Street heavyweights, including Fidelity, Invesco, Bitwise and BlackRock. The above have called for launching a Bitcoin spot ETF. Unlike the futures ETF, which tracks the prices of futures contracts linked to the price of Bitcoin, the spot product will give investors direct exposure to Bitcoin.

The proven ETF vehicle is likely to spark significant investor inflows that could see it reach a $100 billion market. It can also lead to outflows from futures-based funds, which are less capital efficient.

By Audy Castaneda

Elon Musk Imposters Scam TikTok Crypto Enthusiasts

Leonardo Perez
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Elon Musk Imposters Scam TikTok Crypto Enthusiasts

Cryptocurrency scammers are using fake videos of personalities like Elon Musk on TikTok to lure victims into fraudulent schemes. Cybersecurity media outlet BleepingComputer found fraudulent crypto sites that require users to deposit 0.005 BTC to activate accounts. Scammers on X (Twitter) pose as companies such as Ark Invest, promising a “1% daily return,” leading to substantial financial losses.

Scammers are turning to social media platforms such as Instagram, TikTok and X (Twitter) to conduct crypto scams, posing as famous personalities such as Elon Musk.

While bad actors used to rely on text messages and X (Twitter) posts to target victims, widespread access to Artificial Intelligence (AI) is changing their game.

TikTok Scammers’ Modus Operandi

They are now deepfaking videos of famous personalities like Elon Musk, Changpeng Zhao, Vitalik Buterin and many more. A user scrolls through short videos on TikTok and sees a deepfake video of Elon Musk talking about a new cryptocurrency or cryptocurrency exchange. Out of curiosity, or perhaps greed, the user clicks on the link shared in the TikTok video without checking whether Elon Musk actually endorses the product.

Cybersecurity media outlet BleepingComputer tested one of the fraudulent giveaway websites. The website’s user interface showed that the fraudulent exchange had deposited 0.34 Bitcoin (BTC) into users’ accounts. However, to withdraw the amount, the user must first deposit 0.005 BTC to “activate” the account. Then, the scammers stop responding once the funds have been deposited. In some cases, scammers will also attempt to steal personal information from users, citing “know your customer” (KYC) purposes.

Exploits, Hacks and Scams Caused Losses of Almost USD 1 Billion in 2023, Report Reveals

Malicious actors targeting the crypto space have stolen more than $45 million in digital assets from their victims in the month of August alone and a total of $997 million so far this year (YTD), according to a report shared by blockchain security firm CertiK.

In the report, released earlier this month, CertiK highlighted that exit scams stole around $26 million, flash loan attacks stole $6.4 million, and exploits stole $13.5 million from their victims in August 2023. The cybersecurity firm confirmed that total losses amounted to more than USD 45 million.

According to CertiK, over $997 million has been lost to exploits, hacks, and scams so far in 2023. This includes around $261 million lost to flash loan attacks, over $137 million lost to exit scams, and over $137 million lost to exit scams. 596 million lost due to exploits.

Crypto scams on X (Twitter)

The scammers are not only active on TikTok, but also use other social networking platforms such as X (Twitter). A simple search for “crypto token” will generate hundreds of phishing tweets, each attempting to steal users’ funds via fake tokens.

In addition, scammers use bot accounts to tag users and draw their attention to phishing posts. Once the post is published, the bots mention names of cryptocurrency enthusiasts in the replies.

Recently, users lost more than $700,000 after Ethereum co-founder Vitalik Buterin’s X (Twitter) account was hacked.

Through Buterin’s account, scammers posted a link promising free non-fungible tokens (NFT). Unsuspecting victims who clicked on the link subsequently lost their NFTs. Earlier this month, a crypto whale lost $24 million through a wallet approval phishing scam.

To be on the safer side, users should avoid interacting with social media posts and videos that promise airdrops, cryptocurrency and NFT giveaways, whitelisting access or anything else for free.

By Leonardo Pérez

Number of Lightning Network Nodes Progressively Recovers

Audy Castañeda
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Number of Lightning Network Nodes Progressively Recovers

After a gradual drop in the number of nodes in the solution, Lightning Network, they seem to recover progressively.

The Lightning Network is a second-layer scalability solution for the Bitcoin network, designed to address the issue of scalability and transaction speed limitations on the Bitcoin network. The Bitcoin mainnet’s low scalability causes bottlenecks and high transaction fees during periods of high trading volume. To solve this, LN allows mainnet transactions to move to the second layer. Once there, transactions are carried out in a faster, cheaper and more efficient way.

The Lightning Network has seen significant growth since its implementation. It currently has more than 16,000 nodes and a total of 75,647 payment channels. Since 2020, the number of nodes has increased by an impressive 240%.

The total capacity of the network has exceeded 5,400 BTC, representing a more than six-fold increase since 2021. On average, nodes have a capacity of around 0.333 BTC.

After reaching a peak in April 2022, the number of Lightning Network nodes suffered a decline that lasted for a year. The drop in the number of nodes from the peak of 20,448 occurred in a staggered manner and the recovery shows the same behavior.

Lightning Network Nodes Recover

The crypto winter became a dry brake on the rise in the number of Lightning Network nodes. In early 2022, the number of nodes in that second layer peaked at 20,448. After that, there was a gradual decline.

In March 2023, there was a new, but this time the last, step drop to the range of 15,200 nodes. There the recovery also began in a phased manner that is taking the number upwards again. So far, there have been 2 stair climbs. Thus, the total number of Lightning Network nodes amounts to 18,967.

Interestingly, 48% of the nodes in that second layer are operated in cloud services. According to specialized portals, most of the nodes are in the services of technology companies Google and Amazon.

Number of Channels Also Recovered

On the other hand, the number of channels on the LN network is also increasing after the decline that began in October 2022. At that time, the number remained above 85,000 channels. However, the winter managed to twist the arm of that stability and caused a collapse that had its maximum expression in December, when it fell to 67,011 channels.

With the arrival of 2023, the recovery became notable, although with some ups and downs along the way. From 67K, the number of channels rose to more than 78K in May and is now 73,968.

All this indicates that the recovery of 2023 played in favor of stimulating the use of the LN network. Although the network represents some risks that are exposed by various portals, it remains the hope for Bitcoin to become the dreamed micro-payment network expected by the community.

Despite a time of uncertainty and low interest in the crypto market, the increase in Lightning Network nodes and channels speaks volumes about user confidence in the universe of digital currencies. With the increasing usability of Bitcoin, the LN network will become a necessity when trading.

By Audy Castaneda

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