July was an eventful month for crypto and some developments could have a long-term effect on the industry as a whole.
Let’s recap 5 of the most impactful crypto/DeFi moments of the previous month.
1. July 5th: BlackRock CEO calls Bitcoin “digital gold”
In a recent interview with Fox Business, BlackRock CEO Larry Fink called Bitcoin “digital gold”.
He said that Bitcoin can serve as a hedge against inflation and other economic risks. He also pointed out that Bitcoin is an international asset not tied to any specific country or currency.
BlackRock is the world’s largest asset manager, handling over $10 trillion. Fink’s endorsement of Bitcoin could help to legitimize it and attract more institutional investors.
As you probably know, BlackRock recently applied for a Bitcoin spot ETF and is waiting for the Securities and Exchange Commission’s (SEC) decision.
The SEC has so far rejected all applications for a spot Bitcoin ETF. However, Fink said that he believes that the ETF will eventually be approved by the SEC. This would be a major milestone for the cryptocurrency industry.
2. July 13th: US judge rules Ripple is not a security
On July 13, US District Judge Analisa Torres ruled that Ripple’s XRP token is not a security. This was a major victory for Ripple, which had been sued by the SEC for selling XRP in an unregistered securities offering.
The #SEC had argued that XRP is a security because it is an investment contract which is defined as an investment of money in a common enterprise with the expectation of profits.
However, Judge Torres found that XRP does not meet the definition of an investment contract and it is not purchased with the expectation of profits.
Instead, XRP is purchased for its utility as a means of payment and for its potential to appreciate in value.
The ruling was a significant victory for the cryptocurrency industry as a whole as it could pave the way for other tokens to avoid being classified as securities. This would make it easier for them to raise capital and operate in the United States.
3. July 24th: Worldcoin officially launches
Sam Altman’s token #Worldcoin officially launched on July 24th, after three years of development.
The project founded by Altman - who is also the CEO of OpenAI - has raised over $200 million from numerous VCs and offers a World ID as its main product.
This digital passport serves to distinguish humans from bots and is used to verify identity, create trust, and enable access to services.
Worldcoin Orbs scan a person’s iris to verify a user’s identity, which is seen as a more secure and reliable method than passwords or biometrics.
The team’s goal is to solve some of the biggest challenges facing the crypto industry, such as security concerns and regulatory compliance.
The launch of Worldcoin has generated significant media attention. Several crypto experts have praised the project for revolutionizing the way we think about identity verification.
But some have raised concerns about the potential privacy implications of Worldcoin’s eyeball-scanning technology, as well as the danger of it being used for surveillance purposes.
Altman stated that the technology is used in a privacy-preserving way and that users have control over their data.
4. July 26th: US government asks judge to jail Sam Bankman-Fried
On July 26, the #US government asked a judge to revoke Sam Bankman-Fried’s bail and jail him pretrial.
Bankman-Fried is facing quite a few charges, including securities fraud, campaign finance violations, and money laundering.
The government’s request was based on allegations that Bankman-Fried has repeatedly tampered with witnesses as he allegedly leaked his ex-girlfriend’s diary to a reporter to discredit her testimony.
The government also argued that Bankman-Fried is a flight risk as he has important financial resources and has traveled extensively in the past.
Bankman-Fried’s lawyers argued that the government’s request was exaggerated as he has not been convicted of any crimes and has complied with all of the terms of his bail.
A hearing on the government’s request is scheduled for August 3, 2023.
5. July 30th: Curve Finance gets hacked
On July 30, Curve Finance - one of the biggest DeFi protocols - was hacked due to a vulnerability in the Vyper programming language, which is used to build smart contracts on #Ethereum.
The hacker was able to exploit a reentrancy attack where a contract calls itself recursively. This allowed the hacker to drain funds from 4 Curve Finance liquidity pools and withdraw a total of 287,900 ETH (about $52 million).
As a result, the price of $CRV dropped 20% within a few hours and an additional 15% in the following days.
Attention then started shifting to the Curve’s founder - Michael Egorov - CRV position. He currently has $82 million in debt backed by 360M CRV ($200 million) that is at risk of liquidation (most of it on Aave).
If his position gets liquidated, we can expect a major dump in the prices of DeFi protocols. What’s more, it would worsen the stain on DeFi that the hack has already made.
To Sum Up
#BlackRock CEO Larry Fink called Bitcoin “digital gold” and said he believes a Bitcoin spot ETF will eventually be approved by the SEC.
US District judge ruled that Ripple’s XRP token is not a security as it is not purchased with the expectation of profits.
Sam Altman’s Worldcoin token launched after years of development generating a lot of attention and controversy.
The US government asked to revoke Sam Bankman-Fried’s bail and jail him pretrial as he had allegedly tampered with witnesses and is a “flight risk”.
One of the biggest DeFi protocols Curve Finance was hacked for around $50 million sending its token $CRV into a downward spiral.
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