Last month, the United States (US) Securities and Exchange Commission (SEC) approved form 19b-4 filings from major financial services firms such as BlackRock, VanEck, Grayscale, Fidelity, and ARK Invest.

This move brings their proposals to launch Ethereum (ETH) Exchange-Traded Funds (ETFs) closer to realisation.

The next step for these firms is to secure approval for their S-1 registration forms from the SEC.

Once approved, these ETH ETFs could be listed, providing the broader market with accessible investment vehicles that hold actual ether, similar to the previously established Bitcoin (BTC) spot ETFs.

Spot Ether ETFs Could be Approved by Summer's End

During a recent US Senate hearing, SEC Chair Gary Gensler, in response to questions from Senator Bill Hagerty, indicated that ETH-based ETFs could receive regulatory approval by the end of the summer.

Gary Gensler says Ethereum Spot ETFs likely to receive approval by "Some time" at the of summer at Congressional Hearing 🇺🇸☝️#Ethereum #ETF $ETH pic.twitter.com/lAJ0ZdtPGY

— MartyParty (@martypartymusic) June 13, 2024

This would be the final step before these funds could be launched in the US.

He iterated:

“The Ethereum exchange-traded product filings that were in front of us from stock exchanges, I think there were eight or nine of them, were all jointly approved. Individual issuers are still working through the registration process that's working smoothly. I would envision that [it gets done] sometime over the course of this Summer.”

Gensler's projected timeline aligns with the end of the summer season on 22 September, potentially allowing for the S-1 approval of Ethereum ETFs in time for the November US elections, where cryptocurrency has become a significant topic in the presidential race.

The chairman's estimate echoes that of ETF experts at Bloomberg, who predicted it would take "weeks" to "months" for the S-1 documents to be approved following the 19b-4 approvals.

Makes sense. What I heard: issuers still waiting to get comments from Corp Fin on S-1s which they handed in 2wks ago. Corp Fin is just looking at these docs for first time (why? bc of the (highly likely) political last min 180 (remember they were as surprised by this as anyone… https://t.co/N32N6jFXBv

— Eric Balchunas (@EricBalchunas) June 13, 2024

The introduction of such funds in the US was considered a matter of "if" rather than "when."

The SEC had previously blocked attempts to launch Bitcoin ETFs until a federal court ruled that the agency was mishandling the issue.

Gensler noted that the SEC has since followed that decision and allowed them.

Gensler also mentioned the launch of Ethereum futures ETFs last summer and the existence of CME Ether futures for several years.

The hearing also addressed the regulatory challenges posed by the rapidly evolving cryptocurrency industry.

Senator Richard Durbin questioned the Commodity Futures Trading Commission's (CFTC) capacity to effectively regulate crypto assets, to which Gensler emphasized the need for "proper resources" and a "well-defined disclosure" regime at the CFTC.

Senator Hagerty underscored the importance of regulatory clarity, encouraging the SEC to create an environment that discourages the offshore migration of the crypto industry.

Gensler responded by distinguishing between illegal activities, personal preferences, and the need for regulatory clarity, suggesting a separation between disliking the law and the lack of clarity.

Gensler Plays the Deflecting Game Again: Is Ethereum a Commodity or Securities? We May Never Know

In an intriguing turn, Gensler mentioned the SEC's endorsement of futures-based Ethereum ETFs in the previous year but evaded the question of Ethereum's classification as either a security or a commodity.

Senator @BillHagertyTN applying pressure to Gary Gensler on his suppression of innovation.

Urging him to reassess his use of resources, stop pushing innovation abroad, admit ETH is a commodity, and expedite full approval of individual issuer registration for Ether ETFs.

H/t:… pic.twitter.com/J98zdhNYXS

— Shane Monastero (@shanemonastero) June 13, 2024

He stated that the agency had only "partially" approved Ethereum ETFs, without providing a definitive answer.

It is noteworthy that the CFTC has reaffirmed its stance, categorising Ethereum and several other cryptocurrencies as commodities, intensifying the regulatory tug-of-war within the digital asset sector.

At the hearing, when queried about Ethereum's status as a commodity, CFTC Chairman Rostin Behnam responded affirmatively.

This question is crucial in determining the appropriate US regulatory body for various tokens, with the SEC overseeing security tokens and the CFTC having jurisdiction over the rest.

This stance contrasts with the SEC's current position, led by Chair Gensler, which only recognises Bitcoin as a commodity, leaving other cryptocurrencies, including Ethereum, unclassified.

Gensler reiterated that while not all cryptocurrencies are securities, those that are must disclose information to the public, reasserting his argument that many tokens remain unregistered and in violation of securities laws.

Gensler has also consistently maintained that the majority of digital assets should be treated as securities, yet he has been reluctant to specify which assets fall into which category, except for those that have been the subject of enforcement actions by his agency.

Ethereum is increasingly viewed as a commodity by industry participants and legal experts, who contend that the SEC's approval of Ethereum as a single-asset ETF product suggests its classification as a commodity.

The prolonged struggle over cryptocurrency classification is exemplified by the CFTC's lawsuit against Binance last year, in which Ethereum and Litecoin were also classified as commodities.

This ambiguity underscores the ongoing debate surrounding cryptocurrency classification and the jurisdictional conflict between the SEC and the CFTC.

Spot Ether ETFs Full Approval Not "Good" Enough News to Stir Slumping Crypto Market

The cryptocurrency markets faced continued pressure during US trading hours on Thursday, extending a pullback that commenced the previous day when the Federal Reserve indicated it anticipated only one rate cut for the year.

ETH prices experienced a mid-morning rebound after Gensler stated his expectation for spot ether ETFs to receive full approvals from the SEC by the end of the summer.

This news briefly lifted ether by 1%, but it quickly became a selling opportunity, with the price reversing by more than 3% just an hour later.

📉Despite easing inflation pressures, #Crypto markets dropped on Thursday.

SEC Chair Gensler says that Ethereum ETFs could be approved by the 'end of summer.'

BTC and ETH fell 4%, while SOL dropped 7%.

Read the full story:https://t.co/CKpCP3c6NV pic.twitter.com/8b6gKbpmC0

— The Defiant (@DefiantNews) June 13, 2024

At that point, ether was trading at $3,440, marking a 5% decline over the past 24 hours.

Bitcoin (BTC) also saw a nearly 5% drop, trading near a one-week low of $66,300.

Assured spot #Ether ETF approval fails to revive the slumping crypto market 😕 SEC Chair Gensler expected full regulatory nod by summer's end but no dice. Has confidence taken a hit? Dive into the details here: https://t.co/0Lt1sCLf5C#CryptoNews #Blockchain

— Aitor (@Ozpaniard) June 13, 2024

The markets began to decline on Wednesday afternoon following the Federal Reserve's policy meeting, which maintained the benchmark fed funds rate range at 5.25%-5.50% but surprised with updated projections indicating just one 25 basis point rate cut expected in 2024.

Rate futures markets had been anticipating two to three 25 basis point moves this year.

US economic data on Thursday morning suggested a continued softening in both inflation and the economy, which failed to improve the overall sentiment in the crypto market.

On X, analyst Skew, among others, is attempting to interpret a market that refuses to sustain higher levels despite recent bullish news, including improving inflation data, a Bitcoin-friendly presidential frontrunner in Donald Trump, the potential approval of spot ETH ETFs, and other risk asset markets, such as U.S. stocks, reaching new all-time highs.

In terms of trading
$66K seems like EQ (equilibrium)

market supported move below $66K
- supply curve picks up (supply comes into the market)

whereas market supported move back above $70K
- demand curve picks up (demand comes into the market again) https://t.co/A9BaPw2nAZ

— Skew Δ (@52kskew) June 13, 2024

At the time of writing, ETH was trading at $3,516, with Bitcoin also falling to $67,038, down about 1% in the same time frame.

inancial world may be on the brink of significant upheaval as the dominance of the dollar could be challenged by Saudi Arabia's decision not to renew its 50-year petro-dollar agreement with the United States (US).

This deal, which expired on 9 June, had long underpinned the global economic supremacy of the US.

Originally established in June 1974, the decision not to renew the contract allows Saudi Arabia to sell oil and other commodities in various currencies, including the Chinese RMB, Euro, Japanese Yen, and Chinese Yuan, rather than exclusively in US dollars.

🇸🇦 🇺🇸 Saudi Arabia's 50-year-old petrodollar agreement with the United States has expired, with no new agreement in place.

Saudi Arabia will now sell oil in multiple currencies, including the Chinese RMB, Euros, Yen, and Yuan, instead of exclusively in US dollars. pic.twitter.com/MxdUn8t2ZP

— BRICS News (@BRICSinfo) June 12, 2024

Furthermore, the potential adoption of digital currencies like Bitcoin may also be explored.

In a related development, Saudi Arabia's central bank has become a full participant in Project mBridge, a cross-border initiative led by the Bank for International Settlements (BIS) in Switzerland that experiments with central bank digital currencies (CBDCs) for international trade.

Saudi Arabia’s deal with the US to sell oil only in dollars ended yesterday, the 9th of June and have decided not to renew the 50 year old agreement.
Saudi Arabia has decided to join the mBridge project for cross border payments alongside other BRICS members. #brics #economy… pic.twitter.com/kRFj0gEHDh

— Muhammad Salaahuddin (@MSalaahuddin) June 11, 2024

Understanding Petrodollar & Petrodollar Recycling

Petrodollars refer to the revenues from crude oil exports that are denominated in US dollars.

They are not a separate currency but rather US dollars used by oil exporters to conduct transactions.

The term became widely recognised in the mid-1970s when escalating oil prices led to substantial trade and current account surpluses for oil-exporting nations.

At that time, as well as today, oil sales and the resulting current account surpluses were expressed in dollars due to the US dollar's status as the most extensively used global currency.

#BRICS#America#Petrodollar

What is Petrodollar..?

The term "petrodollar" refers to the U.S. dollar's role as the only currency used for crude oil transactions on the world market....

Open and Read. pic.twitter.com/jAwwHKEetU

— Ụkaegbu Mmesọma (@DaVinci01709908) June 13, 2024

The global preference for the US dollar is not contingent upon the favour of oil exporters; it is rooted in the US being the world's largest economy and importer of goods, possessing deep and liquid capital markets, and being supported by the rule of law and military strength.

The US dollar's widespread use in paying for crude oil reflects the historical preferences of non-US oil suppliers.

Oil exporters favour the US dollar because it is the dominant global currency for international investments, making it the most practical repository for accumulated oil revenues, which must earn a return to be of value.

There is no formal "petrodollar system."

The reinvestment of oil export earnings, sometimes referred to as "petrodollar recycling," is an example of how these funds are utilised.

An early instance of this was the 1974 agreement between the US and Saudi Arabia, which channelled Saudi petrodollars into US Treasury securities.

Subsequent arrangements involved using Saudi oil export proceeds to finance US aid and development projects in Saudi Arabia and to fund US weapons sales to the kingdom.

Many oil exporters now allocate their petrodollars to stocks, bonds, and other financial instruments through sovereign wealth funds.

So What is the Petrodollar Agreement & Why Did Saudi Arabia Not Renew it?

The petrodollar agreement, established in response to the 1970s oil crisis, was a pivotal deal between the US and Saudi Arabia following the US' departure from the gold standard.

Signed in June 1974 and under its terms, Saudi Arabia agreed to price its oil exports exclusively in US dollars and invest surplus oil revenues in US Treasury bonds.

In return, the US provided military support and protection to the kingdom.

According to Katja Hamilton of BizCommunity, this deal required foreign countries to hold US dollars to purchase oil from Saudi Arabia.

So, What Happened..?

The original petrodollar agreement was signed on 8th June 1974 by #US Secretary of State, Henry Kissinger and Prince Fand Ibn Abdel Aziz of Saudi Arabia...

— Ụkaegbu Mmesọma (@DaVinci01709908) June 13, 2024

At the time, American officials were optimistic that the agreement would encourage Saudi Arabia to increase oil production and serve as a model for economic collaboration with other Arab nations.

Under the agreement, it was stated that it will bond for 50yrs. After 50yrs, it can be renewed or changed.

Sunday, 9th June 2024, marked it exactly 50yrs and the Crown Prince of Saudi Arabia refused to renew the agreement...

— Ụkaegbu Mmesọma (@DaVinci01709908) June 13, 2024

While escalating global tensions and shifting geopolitical allegiances are often cited as reasons, the changing dynamics of the global oil market have also played a crucial role.

The world's gradual shift toward alternative energy sources has reduced reliance on oil over the past decade.

Even oil-rich countries like Saudi Arabia have adapted to this trend.

The Kingdom aims to generate half its electricity from renewables and natural gas by 2030 and plans to plant 10 billion trees to achieve net-zero emissions by 2060.

To support these goals, Saudi Arabia has launched over 80 initiatives, with investments exceeding $188 billion.

Furthermore, the rise of new oil-producing nations, such as Brazil and Canada, has challenged the traditional dominance of Middle Eastern oil, prompting Saudi Arabia to rethink its strategies.

This confluence of factors has led to the expiration of the longstanding petrodollar agreement, reflecting a broader shift in the global energy landscape.

Saudi Arabia Joins BIS' CBDC Project mBridge

In an effort to establish a robust and innovative framework for cross-border payments, the Saudi Central Bank (SAMA) has become a full participant in Project mBridge, a cross-border initiative that explores the use of CBDCs for international trade.

Could the petrodollar's end make the US economy scream?

The Saudi Central Bank has joined the Bank for International Settlements’ (BIS) cross-border central bank digital currency (CBDC) project, mBridge, which is seen as a step towards reducing global oil trade in US dollars.… pic.twitter.com/3tHGdAElh7

— Sputnik (@SputnikInt) June 13, 2024

This development was announced by the Bank for International Settlements (BIS) on Wednesday.

Josh Lipsky, who runs a global CBDC tracker at the US-based Atlantic Council, said:

"The most advanced cross-border CBDC project just added a major G20 economy and the largest oil exporter in the world. This means in the coming year you can expect to see a scaling up of commodity settlement on the platform outside of dollars – something that was already underway between China and Saudi Arabia but now has new technology behind it."

Significant news in digital currency - Saudi Arabia joins mbridge, which of course has China as the key member. Expect the platform to be used for non-dollar commodity settlement. https://t.co/tvpqh7Ck7H

— Josh Lipsky (@joshualipsky) June 5, 2024

Project mBridge has achieved a significant milestone by reaching the minimum viable product (MVP) stage after three years of development.

The BIS has invited private sector financial firms to contribute new solutions and use cases that can further enhance the platform and demonstrate its full potential.

Experts have noted that the MVP stage signifies that the mBridge project is now accessible to commercial banks within the six participating member countries for real cross-border payment applications, marking a significant advancement in facilitating cross-border payments using CBDCs.

In addition to the six full participants in mBridge, nearly 30 other official entities, with some of the better known observing members include the Bank of Israel, Bank of Namibia, Bank of France, Central Bank of Bahrain, Central Bank of Egypt, Central Bank of Jordan, European Central Bank, the International Monetary Fund, the Federal Reserve Bank of New York, the Reserve Bank of Australia, and the World Bank.

This grants them access to a "sandbox" environment for experimenting with the technology.

Major global financial institutions, including Goldman Sachs, HSBC, and China's six largest state-owned banks, are also actively involved in the project.

Project mBridge was initiated in 2021 as a collaborative effort among the BIS's innovation hub, the Bank of Thailand, the Central Bank of the United Arab Emirates (UAE), the Digital Currency Institute of the People's Bank of China, and the Hong Kong Monetary Authority.

The project aims to test the feasibility of CBDCs for instantaneous cross-border trade and other payment scenarios using the mBridge Ledger, a blockchain developed for the project.

According to a BIS press release on 5 June, the project seeks to address key inefficiencies in cross-border payments, such as high costs, slow transaction speeds, and operational complexities.

It also tackles issues related to financial inclusion, particularly in regions where correspondent banking has diminished, leading to increased costs and delays.

Multi-CBDC arrangements that link different jurisdictions within a single shared technical infrastructure hold substantial promise for enhancing the current system.

They could enable immediate, low-cost, and universally accessible cross-border payments with final settlement.

A platform built on a new blockchain, the mBridge Ledger, supports real-time, peer-to-peer cross-border payments and foreign exchange transactions.

In 2022, a pilot involving real-value transactions was successfully conducted, and since then, the mBridge project team has been investigating the potential for the prototype platform to evolve into an MVP, a stage that has now been achieved.

Future of Dedollarisation & Potential Imminent Collapse of US Economy

The US dollar holds the position of the most powerful and widely utilised currency globally.

For numerous oil-exporting nations, receiving payments in US dollars is highly advantageous.

The petrodollar agreement has solidified the USD's status as the world's reserve currency, contributing to a period of prosperity for Americans who benefited from being the preferred market for global corporations.

Oil's significance as a key commodity in international markets has automatically elevated the US to a pivotal role in the global economy.

Additionally, the influx of foreign capital into US Treasury bonds has supported low interest rates and a robust bond market.

However, the US dollar's dominance in the petrocurrency arena has faced challenges in recent years.

Countries worldwide have been diversifying their assets and attempting to reduce the USD's dominance due to concerns about being excluded from the greenback-based financial system if sanctions are imposed.

This is a response to the US using the petrodollar system to exert influence in foreign policy, a strategy often seen as a move towards dedollarisation.

The petrodollar has been criticised for being a tool of war and dominance.

The rise of Eastern powers signals the end of this era and the emergence of a multipolar world where power is distributed rather than monopolised.

This trend challenges the US dollar's dominance in payment systems.

Saudia Arabia formally ends 50-year-old petrodollar agreement.

For too long, the petrodollar has been a weapon of war and dominance.

Today, the East's awakening signifies the end of this tyranny & the arrival of a multipolar world where power is shared, not abused. pic.twitter.com/FwYplzaVUz

— Marwan Nawaz (@MarwanNawaz) June 13, 2024

Saudi Arabia's decision not to renew its 50-year petro-dollar agreement is indicative of the petrodollar's uncertain future.

Saudi Arabia's dedollarisation could inspire other oil producers to seek independence from the US dollar.

This shift has been underway since Russia's invasion of Ukraine and the subsequent Western sanctions, which led to the formation of new trading alliances and altered partnership agreements.

The implications of dedollarisation are significant.

For the US, it could lead to reduced geopolitical leverage and higher borrowing costs, with detrimental effects on American hegemony and domestic socio-economic conditions.

Currently, US economic data suggests a slowdown, particularly in the goods sector, with services also showing signs of cooling.

Indicators such as the ISM and PMI, along with new orders, point to weaker GDP projections.

Despite this, the latest CPI data shows an average year-over-year inflation rate of 3.4%, which Fed Chairman Jerome Powell has described as "way too high," emphasizing the need to achieve the sustainable 2% target.

If the dollar loses its status as the world's reserve currency for oil transactions, the US's ability to influence market rates for its imports will be severely diminished.

The US economy's reliance on foreign demand for dollars to purchase oil extends beyond securing cheaper imports.

The global demand for the dollar is what allows US Treasury bonds to support low interest rates.

With rising fuel prices and increased costs for goods and services, Americans could face a severe economic downturn.

Daniel Krupka, Head of Research at Coin Bureau, suggested:

“However, the end of the agreement could be bad for the USD insofar as Saudi Arabia decides to convert these non-USD currency proceeds into other assets, such as gold or BTC.”

Brian Mahoney, co-founder of Acre, pointed out:

"The symbolism of the end of the US-Saudi petrodollar agreement marks a shift toward a future that is further economically and geopolitically fragmented. It means that the world’s currency for top energy assets like oil is no longer priced just in dollars, opening the door to alternative assets instead.”

While some analysts downplay the threat to the USD's status as the reserve currency, many recognise that the expiration of the petrodollar agreement could weaken the USD and US financial markets over time.

Although the US dollar is expected to remain the preferred global payments currency in the short term, the decisions made today will undoubtedly have lasting implications for the future.

MicroStrategy, a dominant Bitcoin holder among publicly traded U.S. companies, announced late yesterday its plan to issue $500 million worth of convertible senior notes due 2032 through a private offering to qualified institutional investors.

Continuing to Increase Bitcoin Holdings MicroStrategy explained in the announcement that the convertible senior notes would meet the following basic conditions:

They will be MicroStrategy's unsecured senior obligations, with interest payable to investors, and will be settled semiannually on June 15 and December 15 each year starting from December 15, 2024.

After June 20, 2029, MicroStrategy may redeem some or all of the notes in cash.

Noteholders have the right to require MicroStrategy to repurchase all or part of their notes in cash on June 15, 2029.

The interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing.

More importantly, MicroStrategy stated that the proceeds from this bond issuance would continue to be used to purchase more Bitcoin:

"MicroStrategy intends to use the net proceeds from the sale of these notes to purchase additional Bitcoin and for general corporate purposes."

MSTR Falls Nearly 8% at Market Open

Since MicroStrategy announced its continuous investment in Bitcoin in August 2020, its stock (MSTR) has entered a surge mode and experienced a concentrated boom period with the arrival of the Bitcoin bull market. The stock price has often been stimulated by multiple announcements of increasing Bitcoin holdings this year.

However, this time, although MSTR rose 3.1% in pre-market trading, it subsequently plummeted, closing at $1,483.88, down 7.47%. Although Bitcoin's performance was also poor last night, MSTR's decline was steeper, indicating that frequent increases in holdings seem to be losing their effect on pulling up the stock price.

Bitcoin surged to $70,000 briefly after the CPI announcement the night before last but continued to decline afterward, hitting a low of $66,258 at midnight today (14th), and was at $66,630 at the time of writing, down 2.4% in the past 24 hours.

MicroStrategy's Bitcoin Unrealized Gains at $6.73 Billion

Despite Bitcoin's continued volatility, according to the latest data from bitcointreasuries, MicroStrategy currently holds 214,400 BTC with a purchase cost of approximately $7.543 billion and a current total value of $14.276 billion, resulting in an unrealized gain of $6.73 billion.

Biden's Exploring Cryptocurrency Donations

In a surprising turn of events, President Joe Biden's reelection campaign is exploring the possibility of accepting cryptocurrency donations through Coinbase Commerce, marking a significant departure from traditional campaign finance methods and signalling a strategic shift towards engaging with the tech-savvy electorate.

Amidst the evolving landscape of digital currencies, the Biden campaign has initiated discussions with Coinbase Commerce, a platform facilitating payments in hundreds of cryptocurrencies.

This decision is in contrast with his past anti-crypto stance.

This move mirrors similar efforts by former President Donald Trump's campaign, which has already integrated crypto donations into its fundraising strategy since May 2024.

BREAKING: 🇺🇸U.S. president Joe Biden's campaign considers accepting Crypto donation shortly after rival candidate Donald Trump did so.#crypto #cryptocurrency #ElectionsLégislatives2024 pic.twitter.com/Lxvpbwj6lz

— FooDriver (@FooDriver_dApp) June 13, 2024

Is Biden Targeting Young Voters Through Crypto?

The Biden campaign has been struggling to connect with young voters, who are a significant demographic in the election.

In a bid to revitalise their appeal, the campaign is exploring unconventional avenues - including the acceptance of cryptocurrency donations.

This move aligns with Biden's broader strategy to resonate with younger voters, who are increasingly drawn to digital currencies.

As the poll numbers suggest, the Biden campaign's previous outreach efforts, focused on student debt relief and social media engagement, have failed to yield the desired results.

A recent Harvard Youth Poll revealed a stark decline in Biden's lead among young voters, from 23 percentage points in 2020 to a mere 8 percentage points this year.

Source: Harvard IOP

With approximately 18 million Americans owning cryptocurrencies, predominantly millennials and Generation Z, the Biden campaign sees an opportunity to connect with a tech-savvy and financially diverse electorate.

7% of the US adult population (18M) invested in #crypto last year 🤩

☑️ Most cryptans belong to the millennial generation (30-44 yo) and Generation Z (18-29 yo)

Source: Federal Reserve System Survey pic.twitter.com/V3MNhxPFw1

— Web3_Vibes (@W3Vibes) May 23, 2024

By embracing cryptocurrency donations, Biden may be able to regain lost ground and appeal to a demographic that is increasingly shaping the political landscape.

The move is a bold attempt to bridge the gap and resonate with a generation that is driven by innovation and disruption.

A Wave of Criticism from the Crypto Community

President Biden's exploration of crypto donations has sparked diverse reactions, reflecting the complexities of public sentiment within the cryptocurrency community.

Critics, including prominent figures within the industry, have voiced scepticism and criticism.

Joe Carlasare, a noted supporter of Bitcoin, highlighted what he perceives as contradictions within the Biden administration's stance on cryptocurrency.

He pointed out the SEC's contentious relationship with exchanges like Coinbase, juxtaposed with the campaign's openness to crypto donations.

Biden’s SEC is suing @coinbase in federal court arguing it doesn’t have a right to exist as an exchange.

At the same time, the Biden campaign is preparing to accept crypto donations via coinbase.

H/t @prestonjbyrne pic.twitter.com/m3L22rPQDC

— Joe Carlasare (@JoeCarlasare) June 12, 2024

Many others also shared the same sentiment.

The Biden administration is currently suing Coinbase, Kraken, and Uniswap as unregistered securities brokers https://t.co/elbDwsvk7m pic.twitter.com/t63Rb8Yttd

— Bully (@BullyEsq) June 12, 2024

So, the Biden administration and the SEC spend years trying to crush crypto and even sue Coinbase…But now, they’re scrambling to set up crypto donations through Coinbase?

Wow, they really do think Americans are stupid. pic.twitter.com/PTdSs2OFu1

— Dan Gambardello (@cryptorecruitr) June 13, 2024

Biden’s SEC is suing Coinbase in Federal court for potentially listing unregistered securities.

Meanwhile Biden wants to use Coinbase to accept campaign donations denominated in those potentially unregistered securities.

Reality is stranger than fiction.

— Gabor Gurbacs (@gaborgurbacs) June 13, 2024

Similarly, John Deaton, an advocate for XRP, expressed concerns about perceived inconsistencies in Washington's approach to cryptocurrency regulation.

He criticised the administration for alleged hostility towards certain aspects of the crypto industry while simultaneously courting donations from the same sector.

Joe’s post 👇 highlights the utter dysfunction of Washington DC politics. @ewarren has proposed a Bill written by the Banking Industry that bans the self-custody of Bitcoin and other crypto assets. @GaryGensler claims that those same crypto assets constitute illegal securities.… https://t.co/BfGFt9QQR1 pic.twitter.com/QuQ6Zfk2bx

— John E Deaton (@JohnEDeaton1) June 13, 2024

These criticisms reflect broader anxieties within the cryptocurrency community regarding regulatory clarity and political support.

On X platform, figures such as Ryan Selkis and Nic Carter have been particularly vocal in their disapproval.

Selkis, CEO of Messari, condemned the potential acceptance of crypto donations as premature and reflective of what he views as inadequate policy concessions from the Biden administration.

They’re right and FEC records are public.

If you’re a Dem: donate with cash.

Crypto can be traced on chain, and I’ll be on it like a hawk for the next six months, cross checking FEC records and blockchain movements.

Sorry. No crypto.

I’ve sacrificed more than you have. https://t.co/3klLwjd3Uq

— Ryan Selkis (d/acc) 🇺🇸 (@twobitidiot) June 13, 2024

Carter, founder of Coin Metrics, echoed these sentiments, accusing the administration of regulatory overreach and actions detrimental to crypto innovation.

under biden, the admin:
- bullied the banks into dropping crypto clients
- engaged in lawfare against every major exchange and token project
- harassed bitcoin miners and tried to bully utilities into dropping them
- forced a great number of high quality projects and stablecoins…

— nic carter | BIP-420 (@nic__carter) June 13, 2024

Despite these criticisms, the Biden campaign appears committed to exploring avenues that resonate with the increasingly influential cryptocurrency community.

Sources close to the campaign emphasise that discussions regarding crypto donations are in preliminary stages, highlighting the cautious approach taken amid polarised public opinion.

This strategic manoeuvre reflects Biden's campaign's awareness of the electoral significance of digital currency issues and underscores its efforts to navigate a rapidly evolving political landscape.

A Broader Strategy to Engage with the Crypto Community

Despite the backlash, the Biden campaign's exploration of crypto donations is seen as part of a broader strategy to engage with the crypto community and secure every possible vote.

The campaign has been seeking ways to demonstrate support for the cryptocurrency industry, particularly after facing criticism for opposing the repeal of SAB 121, a legislative measure viewed as restrictive by crypto proponents.

With crypto-backed super PACs amassing a $100 million war chest, the campaign's move is seen as a strategic priority to secure contributions from the cryptocurrency sector.

Biden’s Anti-Crypto Stance

Over the past four years, Biden has consistently shown reluctance towards supporting the Bitcoin and cryptocurrency industry.

His recent veto of a bipartisan bill aimed at enabling trusted financial institutions to custody cryptocurrencies highlighted this stance.

BREAKING: 🇺🇸 President Biden vetoes bill that would allow highly regulated financial firms to custody #Bitcoin and crypto. pic.twitter.com/TMHavdWRx7

— Bitcoin Magazine (@BitcoinMagazine) May 31, 2024

Biden has also expressed scepticism towards crypto, once likening crypto traders to "wealthy tax evaders".

His administration's preference for a Central Bank Digital Currency (CBDC) further highlights this viewpoint, emphasising centralised control over financial systems.

Biden's Department of Justice has also taken actions against crypto-related services, reflecting a broader regulatory approach that contrasts sharply with the pro-crypto sentiments seen in other political quarters, including among some Republicans.

A Reversal of Policy or Election Strategy?

As the 2024 presidential race intensifies, President Biden's campaign pivot towards accepting cryptocurrency donations, despite past scepticism and regulatory actions, raises questions about the motivations behind this move.

Is it a genuine policy shift towards embracing digital innovation, or merely a tactical election strategy to court a burgeoning demographic?

Based on past events, it definitely appears to be less a fundamental shift in policy than a strategic manoeuvre aimed at broadening electoral appeal, with lingering uncertainty about his understanding of crypto.

Biden doesn’t know what crypto is🤣#biden #crypto #trump #coinbase https://t.co/PBRReikK0B pic.twitter.com/569PBG6gpV

— Angelica Saldaña❤️‍🔥 (@AngelofYHVH) June 12, 2024

Whether this marks a lasting policy reversal or a strategic manoeuvre for electoral advantage remains to be seen, but it undoubtedly reflects the evolving influence of the crypto community on mainstream political agendas.

The allure of high-risk tokens and the potential for significant profits may be propelling many cryptocurrency users, particularly young men, into engaging in risky trading practices.

The resurgence of memecoins, the availability of highly leveraged trading on decentralised exchanges, and the 24/7 nature of the cryptocurrency space have all contributed to growing concerns about addiction to crypto trading.

Addiction specialists caution that traders can easily become ensnared in a cycle of speculation, experiencing both wins and losses, often lured by social media influencers who share alluring stories of their financial windfalls.

The online, decentralised, and perpetually active cryptocurrency environment has also witnessed an increase in crypto gambling platforms.

Members of Parliament on the Treasury select committee have likened digital markets to the Wild West, with the committee chair, Harriett Baldwin, labelling cryptocurrencies as "fool's gold."

Britain's Public Healthcare Chief Raises Red Flag on More Youngsters' Addiction to Crypto Trading

Amanda Pritchard, the chief executive of the United Kingdom's (UK) National Health Service (NHS), is urging British lawmakers to intervene to protect young individuals from the perils of cryptocurrency trading addiction.

Speaking at the ConfedExpo for NHS managers in Manchester on 12 June, Pritchard highlighted the NHS's establishment of its fifteenth specialised gambling addiction clinic earlier this year, in response to what she described as a "real and growing social need."

Today at @ConfedExpo my message was simple — together we have achieved so much, but we have the ambition to do much more.

Read my speech in full. https://t.co/DWYL5VNdfR pic.twitter.com/LIR25rnS5R

— Amanda Pritchard (@AmandaPritchard) June 12, 2024

She said:

“In 1948 betting shops were still illegal. Fast forward to earlier this year. The NHS opened a 15th specialist centre for gambling addiction responding to a real and growing social need. The NHS can help, will help. But again, we can't solve this alone.”

She posed critical questions to the attendees about the role of the NHS in addressing such issues with its limited resources.

Pritchard reported that the health service has observed an increase in young individuals seeking assistance after becoming ensnared in the volatile cryptocurrency market.

She noted:

"Ever more opportunities spring up for younger people to get addicted to gambling including — as I've heard from staff when I visited the National Problem Gambling clinic earlier this year — on unregulated cryptocurrency markets."

2/8 As a society, we need to ask: Are we okay to just continue picking up the pieces while the methods employed to keep people hooked get ever more sophisticated?" Pritchard emphasized the urgent need for intervention to prevent gambling addictions, including those on… pic.twitter.com/qpTCfSjTO8

— Solo (@1S0L0) June 13, 2024

She cautioned that without proactive measures, the NHS could become an "expensive safety net," merely treating the consequences rather than preventing ill health.

Emphasizing the importance of tackling the root causes, Pritchard questioned whether society is resigned to the NHS merely "picking up the pieces" as the tactics used to foster addiction grow more sophisticated.

She drew particular attention to the burgeoning, unregulated cryptocurrency markets as a novel pathway for young people to develop addictive behaviours.

A consultant psychiatrist specialising in addiction treatment at Priory Hospital Roehampton, Dr Niall Campbell, echoed:

"Over the past few years we have seen a steady stream of patients who have got into serious difficulties with crypto currency dealing. For some it becomes an addiction, in that it takes over their life. As with other addictions, there are huge consequences to their mental health, financial health and relationship health. It can be very similar to gambling addiction, as people constantly chase their losses. We would use a similar treatment model to other addictions, in that we recommend abstinence."

The New Addiction Frontier: Crypto Trading

The surge in cryptocurrency trading over the past 15 years has opened a new frontier for potential addiction.

The Treasury committee's report, released last year, advocated for the regulation of cryptocurrencies akin to gambling, rather than as a financial service, to prevent the establishment of a 'halo' of credibility around the $1.2 trillion market.

Crypto trading addiction has become a public health concern in the UK — NHShttps://t.co/BBlTdoLyIT

— John Morgan (@johnmorganFL) June 13, 2024

The report underscored a July 2022 survey commissioned by HM Revenue & Customs (HMRC), which revealed that approximately 10% of UK adults—equivalent to five million people—currently hold or have previously held cryptoassets, with 'cryptocurrencies' being the most prevalent type (79%).

The report stated:

“Cryptoasset owners tended to be younger than the general population: 76% were under 45 compared with 45% of the general population. Most owners were male (69%). The most mentioned reason for having cryptoassets was that they are a 'fun investment' (52%), while 19% said cryptoassets were a 'core part of my investment portfolio'.”

Did you know: UK government research published in 2022 found that 52% of British crypto holders owned it as a “fun investment”, which sounds like a euphemism for gambling. Another 8% explicitly said it was for gambling.

This is why @BCBerc20 is my revenue share king $BCB #Crypto pic.twitter.com/M9kHHvTALt

— The Crypto Professor (@TheCryptoProfes) August 4, 2023

There was also anecdotal evidence suggesting that school children are engaging in cryptocurrency speculation.

The price volatility of unbacked cryptoassets—combined with their lack of intrinsic value—exposes consumers to substantial risks of financial loss.

One platform, Polymarket, has experienced its value locked in approaching nearly $29 million, as reported by DefiLlama.

This platform facilitates bets on a wide array of events, including sports and election outcomes, as well as more niche bets, such as whether Elon Musk will ban Apple devices at his companies.

7/8 The rise of high-risk tokens and decentralized crypto exchanges has made the problem worse. Many users, hoping for big gains, place highly leveraged bets, leading to significant liquidations and losses. Platforms like Polymarket have surged in popularity, with $29M in value… pic.twitter.com/D9RLAKnINi

— Solo (@1S0L0) June 13, 2024

It is estimated that more than 1.6 million people in England are involved in at-risk or problem gambling.

Industry Leaders in UK Push to Shape New Regulations

Critics have long drawn parallels between investing in cryptocurrencies and gambling, a view that has prompted the UK government to take steps towards regulating the crypto industry.

In June last year, King Charles sanctioned laws to subject cryptocurrencies to the same regulatory framework as other financial services, acknowledging the speculative nature of these assets as more akin to gambling than traditional financial services.

However, in July 2023, the Treasury declined a proposal from lawmakers to regulate retail trading of cryptocurrencies as gambling, choosing instead to maintain its classification as a financial service.

Andrew Griffith, the then-Financial Services Minister, was unequivocal in his rejection of treating cryptoassets as a form of gambling.

He had expressed:

“[Treating cryptos as a form of gambling] would run completely counter to globally agreed recommendations from international organizations and standard-setting bodies, including the International Organization of Securities Commissions and the G20 Financial Stability Board."

In recent developments, industry leaders are actively lobbying in the UK to shape the regulatory landscape.

Their agenda includes the expeditious introduction of comprehensive regulations, the resurrection of the stablecoin legislation proposal, the relaxation of marketing restrictions for crypto products, and the resolution of banking access challenges.

The success of these initiatives is contingent upon the political climate, especially with the potential for a Labour government to take office.

Economic Secretary Bim Afolami announced in April that further legislation is being developed to bring additional facets of the crypto industry, such as exchange operations and the custody of customer assets, under regulatory scrutiny for the first time.

CryptoUK board advisor Ian Taylor cautioned:

“We're fearful that if the government delays too long in getting a full regulatory package in place, we're going to be way behind our competitors.”

Anna Hemmings, chief executive officer of gambling support organisation GamCare, said:

“The gambling sector is large and growing in this country . . . so I think in the short term it would be very challenging for the Gambling Commission to take on crypto."

Castle Craig Hospital specialises in the treatment of cryptocurrency addiction, catering to individuals who are ensnared in trading, spread betting, and the exchange of digital currencies such as Bitcoin, Ethereum, Ripple, and Litecoin.

The hospital approaches these behaviours as manifestations of gambling addiction.

For the staff at the private Castle Craig rehab facility, located just outside Edinburgh, the shift in focus is both timely and critical.

The patients, all male, recount distressing tales of grappling with a modern form of addiction: an obsession with cryptocurrency trading.

Some reveal that their crypto addiction is intertwined with substance abuse, while others acknowledge that they initially viewed trading digital tokens as akin to gambling.

According to Anthony Marini, Castle Craig's senior specialist therapist, crypto addicts describe their experiences in a manner similar to how any gambler would describe their addiction.

He affirmed:

"So, for me, should it be regulated as gambling? Absolutely."

Since opening its doors to crypto traders in 2018, Castle Craig has welcomed over 300 patients seeking help for various forms of cryptocurrency addiction, establishing itself as the world's first dedicated centre for this emerging issue.

A patient expressed:

“Put gambling and crypto side by side, look at the repercussions of both of them, look at the severity of both of them, and tell me they're not the same."

The downfall of Terraform Labs and its founder, Do Kwon, in May 2022, serves as a poignant reminder of the complexities and risks inherent in the cryptocurrency domain.

In a striking turn of events, barely a year after the disintegration of his once-celebrated multi-billion dollar crypto venture, Kwon and an associate were apprehended in Montenegro on charges of possessing forged official documents.

Presently, Kwon is on bail in Montenegro, with his future uncertain as he awaits potential extradition to either the United States (US) or South Korea.

This sequence of events follows his departure from the company he once steered, a firm that was once heralded as a beacon of blockchain innovation.

Terraform Labs Settles Civil Lawsuit with the SEC for $4.47 Billion

In a significant development, Terraform Labs has reached a settlement with the United States (US) Securities and Exchange Commission (SEC), agreeing to a substantial payment of approximately $4.47 billion.

Terraform Labs To Pay $4.47B To Settle SEC Charges

Terraform Labs has agreed to settle its charges with the Securities and Exchange Commission (SEC) for the sum of $4.47 billion#LUNC #USTC #LUNA
https://t.co/sd2TKVXhnO

— Terra Luna army ™🦈 (@terra_army) June 13, 2024

This comprehensive resolution encompasses various financial components, including disgorgement fines amounting to roughly $3.6 billion, a civil penalty of $420 million, and prejudgment interest of nearly $467 million.

The agreement was concluded following a two-week trial where Terraform Labs and Kwon were found culpable for the collapse of the Terra ecosystem, an event that resulted in the erasure of $40 billion in investor assets.

The court filings read:

“From at least April 2018 through May 2022, Terraform and Kwon offered and sold crypto asset securities in unregistered transactions and perpetrated a fraudulent scheme that led to the loss of at least $40 billion of market value, including devastating losses for US retail and institutional investors.”

Under the terms of the settlement, Kwon is personally responsible for a significant portion of these remedies, including $110 million in disgorgement penalties, $80 million in civil penalties, and approximately $14.3 million in prejudgment interest fines.

The settlement filing outlines the immediate and short-term actions required, including the transfer of all crypto assets held by the Luna Foundation Guard and all Pyth Network (PYTH) token holdings from Kwon to offset the disgorgement fines and prejudgment interest, with any surplus from the sale of these assets to be applied towards the civil penalty fines.

The settlement also stipulates that Terraform Labs may treat the amount due as an unsecured claim in its bankruptcy proceedings, ensuring that the SEC receives funds through a distribution upon the effectiveness of Terraform Labs’ Chapter 11 plan, in accordance with distribution priorities.

The SEC is granted the authority to enforce the court’s judgment using all available collection procedures, including civil contempt measures should Kwon fail to comply with the transfer orders within 30 days of the judgment.

The court documents filed Wednesday stated:

“Payment of the monetary remedies against Kwon shall be deemed satisfied, provided that all transfers by Kwon to the SEC and the Terraform bankruptcy estate in the Bankruptcy Case total no less than $204,320,196, excluding the value of any Terraform Crypto Assets transferred to the Terraform bankruptcy estate, only if and until Kwon completes: (1) transferring into an escrow account agreed by Kwon and the Commission staff $4,700,000 within 30 days of Final Judgment.”

Furthermore, the agreement imposes permanent bans on Terraform Labs and Kwon, prohibiting them from engaging in fraudulent activities as outlined in Section 10(b) of the Exchange Act and Section 17(a) of the Securities Act.

It will also bar them from buying and selling crypto asset securities, including all tokens within the Terra ecosystem, with limited exceptions for transactions related to the bankruptcy case.

Kwon is additionally prohibited from serving as an officer or director of any issuer with registered securities or reporting obligations.

In a demonstration of the SEC's commitment to accountability, Kwon has agreed to a personal payment of $204 million, a figure that the agency emphasizes reflects nearly all the relief it sought against Kwon for his misconduct.

🚨🚨BREAKING: TFL agrees to pay the SEC 4.4 BILLION and Do Kwon must pay 204 million. Parties are waiting on the judge to authorize it.

Huge for LUNC!#Crypto $LUNC $LUNA pic.twitter.com/92HqSepSMM

— desolbert ⚡ (@miggdotpng) June 12, 2024

The lawyers wrote:

“If approved, the proposed judgment will send an unmistakable deterrent message to not only those who engage in brazen misconduct, but also to all those who seek to evade the requirements of the federal securities laws by crafting new standards of behavior for crypto assets that fall under the purview of the federal securities laws."

This settlement, which aims to serve as a deterrent, was submitted to the court on Wednesday and is awaiting approval by US District Court Judge Jed Rakoff of the Southern District of New York (SDNY).

Both parties have informed the court of their decision to settle, with filings due on 12 June, marking a significant step towards resolving the legal fallout from the Terra ecosystem collapse.

What Will Happen to Do Kwon?

This recent development unfolded within a mere two months after a Manhattan jury rendered a verdict of liability following a nine-day trial.

The SEC had levelled accusations against Terraform Labs and Kwon, claiming they misled investors regarding the stability of their products.

The collapse of the $40 billion ecosystem, which revolved around the algorithmic stablecoin UST and an earlier iteration of LUNA in May 2022, sparked a contagion that rippled through the industry.

Later in the month, the SEC signalled its intention to impose a $5.3 billion penalty to settle the case, marking one of its most substantial fines against a cryptocurrency project.

Terraform countered in court that only an "appropriate civil penalty" per violation should be applied.

During the trial, Terraform Labs’ current CEO Chris Amani disclosed that the company was in bankruptcy proceedings with roughly $150 million in remaining assets.

Kwon's legal team asserted that their client had "no illegal profits ... to disgorge."

Kwon, who remains on bail in Montenegro pending a decision on his extradition to either the US or South Korea to face criminal charges related to Terra's downfall, was notably absent during the trial.

In South Korea, Kwon faces separate allegations of financial crimes, including fraud, bribery, transaction volume manipulation, and violations of capital markets laws.

After serving a four-month sentence, Kwon was released from prison in Montenegro, where the courts have vacillated on the decision to extradite him multiple times.

Legal representatives for the Terraform founder have contested the proceedings, citing improper procedures and filings in the lower courts through various appeals.

Until the extradition issue is resolved, Kwon is anticipated to remain in the region.

The man is literally stuck in Montenegro and cannot leave.

▪️ Being very rich may have a price... Sometimes it may be necessary to share. #DoKwon #LUNC #USTC #LUNA pic.twitter.com/VqBbzbKDKj

— Crypto News Portal (@TerraNewsEN) May 24, 2024

According to court documents, both Kwon and Amani, consented to the terms of the settlement on 6 June.

However, the settlement agreement awaits approval by the New York judge presiding over the case before it becomes binding.

This settlement, one of the largest in SEC history, underscores the regulatory body's dedication to enforcing securities laws within the cryptocurrency market.

The judgment, should it be approved by the court, would conclude the legal conflict between the regulator and Terraform.

Terraform Labs' $4.47B Outsize Binance CZ's $4.32B

Similar to Terraform Labs, Binance Exchange recently settled a long-standing probe with the Department of Justice (DOJ).

The platform agreed to pay $4.32 billion to the DOJ, the Financial Crimes Enforcement Network (FinCEN), and the Commodity Futures Trading Commission (CFTC).

This settlement also led to the resignation of founder Changpeng Zhao (CZ), who is now in jail.

If accepted, Terraform Labs' settlement would be the largest in a crypto fraud case to date, surpassing Binance CZ's $4.32 billion settlement with the DOJ in November.

Binance Founder Changpeng Zhao Agrees to Step Down, Plead Guilty

Zhao’s crypto exchange will also admit wrongdoing and agree to pay $4.3 billion in fines

I have a lot of respect for CZ, and am confident he is doing this for the greater good of freedom. #MonetaryRevolution pic.twitter.com/vouZjWewFj

— Bruce Porter Jr.  (@NetworksManager) November 21, 2023

Settlement Funds Not Going to Victims, Spark Public Outcry and Criticisms

Coinbase's Chief Legal Officer, Paul Grewal, has voiced scepticism regarding the SEC's $4.47 billion settlement with Do Kwon and the now-bankrupt Terraform Labs.

Grewal questioned the practicality of the settlement in providing relief to Terraform's victims.

On X, Grewal expressed doubts about the settlement's efficacy, criticising the SEC's approach to the case.

He pointed out that the settlement merely positions the SEC as an unsecured creditor in Terraform's bankruptcy proceedings and requires Kwon to relinquish only $7 million of his assets.

It’s predictably on-brand to tout a settlement with Kwon and the now-bankrupt Terraform totaling $4.7 billion. But the settlement just makes the SEC an unsecured creditor in the BK and only orders Kwon to hand over $7 million of assets he actually has. There’s zero meaningful… https://t.co/x4AFd8gPXs

— paulgrewal.eth (@iampaulgrewal) June 12, 2024

Grewal argued that this falls short of adequately compensating those who suffered financial losses due to Terraform's allegedly fraudulent actions.

Joining the discussion, other prominent figures in the cryptocurrency industry have echoed similar sentiments.

...and where does all this penalty money go? Funding more cases. It's like a big law enforcement ponzi scheme.

— Chad Steingraber (@ChadSteingraber) June 12, 2024

Ki Young Ju, CEO of CryptoQuant, cast doubt on Terraform Labs' ability to possess the funds necessary for such a settlement, questioning the legitimacy of their financial dealings.

Ki's remarks reflect a broader scepticism within the crypto community about Terraform Labs' transparency and ethical standards.

There is growing concern among industry leaders and the crypto community about how the settlement funds will be allocated and their ultimate destination.

Zach Rynes, a community liaison at Chainlink, also expressed dissatisfaction with the fact that the settlement will be paid to the SEC rather than directly to those impacted by Terra's collapse.

Assuming Terraform Labs actually has $4.47 billion to pay… why is that capital going to a soulless government agency vs being used to compensate Terra’s victims?

Is this what ‘protecting investors’ is supposed to look like? If so, I’d like to opt out, thanks https://t.co/nvSdJqnU2i

— Zach Rynes | CLG (@ChainLinkGod) June 12, 2024

This criticism highlights an emerging debate on the importance of regulatory measures that prioritise investor protection and the recovery of misappropriated funds.

Wait.. so Terraform Labs agrees to pay 4 billion dollars to the US government when you could distribute that money to victims of the Luna crash? How is this acceptable?! That money belongs to Luna investors!

— Makickal (💙,🧡) (@Makickal) June 13, 2024

Additionally, there is scepticism about whether Terraform or Kwon actually have the financial resources to meet the settlement obligations.

So let me get this straight: SEC will get 4.5 bn without suffering any loss; Luna holders will get 💩 having all the losses; SEC is a great watchdog, Do Kwon is out of jail/claims? And second question: where does Do Kwon has 4.5 bn from to pay the bill? @NewsAsset @coinbureau https://t.co/kk7ugM2WZX

— AlexeyT (@AlexeyT16) June 12, 2024

Young Ju stated:

“$4.47B cash-out is impossible, even with a $40B market cap; Do and Terraform aren't supposed to hold that much money.”

Terraform agreed to a $4.47B settlement with the SEC, worth 64,824 #Bitcoin.

Where does this money come from? Did they actually use it to restore the peg? Sus.

$4.47B cash-out is impossible, even with a $40B market cap; Do and Terraform aren't supposed to hold that much money. https://t.co/Ji0PYTjtsq pic.twitter.com/p9Ctm4Ldil

— Ki Young Ju (@ki_young_ju) June 12, 2024

Terraform Labs' Collapse Revisited: Singapore Addresses Licensing Irregularities

Last month, Singapore distanced itself from the failed cryptocurrency venture Terraform Labs, clarifying that the platform was not engaged in activities requiring a license from the Monetary Authority of Singapore (MAS) and was neither licensed nor exempt from licensing by the regulator.

Singapore Revisits Terraform Labs' Collapse, Clarifies Licensing Irregularities https://t.co/gFit0MmZab

— Crypto Farmer 👀 (@CryptoFarmer00) May 9, 2024

The city-state also minimised the repercussions of the Terraform Labs debacle on its financial infrastructure.

Lawrence Wong, who was then the Deputy Prime Minister, Minister for Finance, Chairman of the MAS, and is now the prime minister of Singapore, observed that the aftermath of TerraUSD's collapse—the stablecoin developed by Terraform Labs—was confined to the cryptocurrency sector, with a negligible effect on Singapore's traditional financial system and economy.

He underscored that local financial institutions had minimal involvement with cryptocurrencies.

Lawrence concluded:

“We also remind those who trade cryptocurrencies that MAS' rules and regulations cannot prevent monetary losses arising from such activities. Consumers must be aware of the risks of doing so, and understand that cryptocurrencies are highly volatile and have no intrinsic value.”

Notwithstanding the contained fallout, the episode underscored the speculative and risky aspects of cryptocurrencies.

Since 2017, the MAS has been advising the public about these risks and took action to curb cryptocurrency advertising in public spaces in January 2022.

In line with evolving global standards, the MAS has implemented stricter regulations, with a focus on safeguarding retail consumers.

New measures set to be enforced this year include compulsory risk-awareness assessments for clients, prohibitions on trading incentives, and limitations on offering credit for cryptocurrency transactions.

These regulations also cover business conduct, mandating platforms to uphold proper asset segregation, conduct conflict of interest evaluations, and establish robust risk management protocols.

Insiders have revealed to the blockchain media outlet The Block that U.S. President Biden's campaign team is in talks with cryptocurrency industry participants to accept cryptocurrency donations through Coinbase Commerce. A few weeks ago, Republican presidential candidate Trump accepted cryptocurrency donations.

Coinbase Commerce is a service that allows merchants to accept payments in dozens of cryptocurrencies and has already facilitated cryptocurrency donations for Trump's campaign.

According to sources who requested anonymity due to the sensitivity of the discussions, this move represents Biden's campaign team’s latest effort to garner support from cryptocurrency enthusiasts ahead of the election.

Some congressional experts believe the election outcome will be decided by a narrow margin. A source told The Block that the Biden team might be seeking funds from well-off cryptocurrency supporters to bolster their campaign finances.

A source working with political figures and cryptocurrency industry leaders mentioned, "They are paying attention to issues in the crypto industry and trying to find a quick win to show they support the industry and are not its enemy."

As first reported by The Block last month, shortly after Biden's political opponent Trump made headlines by reversing his stance to support cryptocurrency, Biden’s campaign team has ramped up engagement with the cryptocurrency community in recent weeks.

Multiple sources indicate that the campaign team has since increased its efforts to promote crypto-related messages.

This is particularly true after President Biden faced strong opposition for vetoing a bipartisan push to repeal SAB 121.

SAB 121 is a controversial legislative measure criticized by crypto supporters for hindering the industry's development in the U.S.

An insider disclosed, "People close to Biden are now clearly telling the campaign team that if they remain silent on the cryptocurrency issue and do not keep up, they could lose the election."

He emphasized that discussions about the Biden camp accepting cryptocurrency donations are still in an "exploratory" phase.

Cryptocurrency-supporting donors are also mobilizing, drawing attention from political candidates on both sides.

In May, consumer advocacy organization Public Citizen cited Open Secrets data reporting that cryptocurrency-backed super PACs have raised $100 million.

Sources told The Block that it is certain how this money is allocated and to whom it is donated will be crucial, as voting patterns often align with the funding sources of wealthy donors.

One source remarked, "People seek money, and they seek every vote."

A Gateway for New Users or a Gimmick?

The cryptocurrency space is constantly searching for its "killer app," the one application that will propel mainstream adoption.

Enter "tap-to-earn" games on Telegram, a new trend with the potential to be that game changer.

These games, accessible through the familiar messaging platform, offer a seemingly effortless way to enter the crypto world.

Unlike traditional crypto games that require upfront investment and grapple with high gas fees, Telegram games present a low barrier to entry.

This ease of use has attracted millions, with some titles boasting over 100 million players.

However, the question remains: are these games a genuine gateway to crypto or simply a passing fad?

Telegram's Winning Formula

Telegram's success hinges on its ability to leverage familiarity. With nearly 1 billion users already comfortable with the platform, there's no need to learn a new interface.

This eliminates a major hurdle for crypto newbies, who might be intimidated by complex exchanges and unfamiliar wallets.

The games themselves are straightforward.

Take Hamster Kombat, for instance, where players earn points by tapping a cute hamster.

These points can be used to purchase strategies for a pretend crypto exchange run by the game's mascot.

This lighthearted approach gamifies the learning process, introducing players to basic crypto concepts without overwhelming them with technical jargon.

The rewards further incentivise participation.

Players can earn tokens within the game's ecosystem, potentially sparking their interest in exploring the wider crypto landscape.

A Stepping Stone to Crypto Exploration?

The ultimate goal, as many believe, is to convert these casual gamers into dedicated crypto users.

The games could act as a springboard, familiarising players with the concept of crypto wallets and the idea of earning digital assets.

Ideally, this would lead them to explore other crypto applications like staking and token swapping.

This strategy mirrors the "super app" model popular in Asia, where platforms like WeChat integrate various services within a single app.

Telegram, with its new focus on blockchain and mini-apps, might be evolving into a similar digital ecosystem.

However, the path from casual gamer to crypto enthusiast isn't guaranteed. The long-term success of these games hinges on their ability to retain players and provide a genuinely enjoyable experience.

The "play-to-earn" model of the past has seen its share of failures, with games like Axie Infinity suffering from hacks and economic instability.

Hamster Kombat Takes Telegram by Storm

While Telegram's tap-to-earn games offer a promising pathway to crypto adoption, it's too early to declare them the definitive "killer app."

Meanwhile, the world of crypto gaming has a new champion, and it's adorable, fast-paced, and built around the unlikely heroes – hamsters.

Hamster Kombat, a Telegram-based clicker game where players manage their own virtual crypto exchange, has exploded in popularity, amassing a staggering 100 million total players.

apps reaching 100 million users

WhatsApp: 3.5 years
Instagram: 2.5 years
TikTok: 9 months
Hamster Kombat: 72 days..116 million

because Hamsters are Power! 🐹❤️

— Hamster Kombat (@hamster_kombat) June 7, 2024

This number is truly awe-inspiring – it represents roughly one-ninth of Telegram's entire user base and boasts a player count three times larger than the record set by Notcoin, another popular Telegram game, before it closed its "mining phase."

Notcoin's total number of players prior to the conclusion of its "mining phase"

The social media buzz surrounding Hamster Kombat is deafening.

The game's official Telegram channel has become the biggest one on the entire platform, a testament to the captivating nature of the gameplay and the community it's fostered.

Players are fiercely competitive, vying for the coveted "daily combo" and "daily cipher code," which unlock a treasure trove of free coins, propelling them further up the virtual crypto exchange leaderboards.

The excitement surrounding Hamster Kombat isn't limited to social media frenzy.

The development team recently announced a crucial date for players eagerly awaiting the game's official token launch.

July has been targeted as the launch month for the Hamster Kombat token on The Open Network (TON), giving players a concrete timeframe to prepare for the much-anticipated airdrop.

This airdrop will likely see players who've diligently managed their virtual exchanges rewarded with real-world value, further fueling the game's meteoric rise.

With its blend of adorable aesthetics, strategic depth, and the potential for real financial rewards, Hamster Kombat has become a phenomenon within the crypto gaming space.

Its impact on Telegram and the sheer number of players it's attracted suggest this is just the beginning for the clicker game that's taken the crypto world by storm.

Hamster Kombat's Daily Cipher for Free Coins

The game has geared up for a new way to amass in-game wealth besides the daily combo. The daily cipher offers a secret stash of 1 million free tokens every single day.

This ingenious feature, unveiled on 5 June, rewards dedicated players with a daily dose of digital currency.

The announcement came through a cryptic message on the game's official Telegram channel, accompanied by a Morse code sequence displayed subtly on the loading screen – a playful hint that read "LOADING."

But don't be fooled by its simplicity!

Unlocking this treasure requires mastering a specific input method. Here's the ultimate guide to cracking the code:

○ Step 1: Activating the Cipher

On the main screen, tap the "Earn per tap" box three times consecutively.

This will transform your hamster icon's background to a fiery red, and a brand new "Daily Cipher" box will appear beneath your earnings meter. You're now ready to embark on your code-cracking mission!

○ Step 2: Deciphering the Secret Message

The daily cipher will be a specific term, and to claim your reward, you'll need to enter it using Morse code. Each letter is represented by a series of taps and holds:

A long hold signifies a dash (-)

A quick tap represents a dot (.)

How to type #Hamster's Morse code?

1️⃣ Use Morse Code Chart
2️⃣ Just touch for (.)
3️⃣ Hold more than one second for (-)
4️⃣ In writing a letter, start the next (.) or (-) before it passes the circle
5️⃣ For new letter, wait till the letter appears#hamsterkombat #memecoin pic.twitter.com/WGOFWw3cM9

— Hamster Kombat Tracker (@HamsterCombat) June 10, 2024

○ Step 3: Cracking the Code (Example: 5 June's Cipher)

The very first daily cipher, unveiled on 5 June, was none other than "BTC" – the abbreviation for Bitcoin. Here's how you would've entered it:

B: Begin with a long hold, followed by three quick taps.

T: A single long hold.

C: A long hold followed by a tap, another long hold, and a final tap.

The game thoughtfully displays each letter you enter on the screen, so you can be sure you're on the right track.

With a little practice and patience, you'll be deciphering these codes like a seasoned Morse code expert, raking in those free coins in no time!

○ Step 4: The Hunt for the Daily Cipher

The clock strikes 7pm UTC every day, marking the reset of the daily cipher.

This information was revealed in an official YouTube video, where Hamster Kombat also confirmed the first code as "BTC."

But here's the intriguing part: some players, even before the video's release, managed to unearth this code.

Did they stumble upon it through sheer persistence, or were there cryptic clues hidden elsewhere?

The answer remains a delightful mystery!

As of now, it's unclear whether Hamster Kombat will officially reveal the daily codes in the future.

○ Step 5: Uncovering the Future

While the current daily cipher, as of 12 June, remains "HAMSTER," the quest for future codes is wide open.

#HAMSTERKOMBAT cipher code for today is:

HAMSTER

H: ....
A: ._
M: __
S: ...
T: _
E: .
R: ._.

Follow for TOMORROW'S code @HamsterCombat @HamsterCombat #tapswap #memecoin #notcoin #yescoin pic.twitter.com/AzDlIRlUOe

— Hamster Kombat Tracker (@HamsterCombat) June 11, 2024

Social media platforms like Twitter and TikTok, similar to how the daily combo surfaces, might just be the treasure trove where these hidden messages are unearthed.

So, keep your eyes peeled on social media and sharpen your Morse code skills – the daily cipher awaits your decoding prowess!

Notcoin's Current Status

On the other hand, Notcoin is experiencing a surge in popularity.

With 40 million users, it boasts a massive player base, with a significant 15% increase in active users in just a week.

Quick recap

Notcoin has 40M users total 🎉

These are the activated users from the database, not from web analytics tools that multiply # of users by their sessions and now show 500M Notcoin users lol pic.twitter.com/UUIp6oK0RA

— Notcoin Ø (@thenotcoin) June 9, 2024

This user growth is reflected in the token's price, which recently enjoyed a brief spike to $0.0197. While the price has settled back somewhat, it still sits comfortably above the $0.01 mark.

Notcoin's Price: A Glimpse and a Caution

The NOT token currently holds a market cap of around $1.9 billion.

This is a respectable position, but down from its lofty high of $2.56 billion a month ago.

Analysts predict the NOT token could reach $0.047 by 2025, but a significant caveat exists: Notcoin lacks a whitepaper, leaving many details about the project's future unclear.

Despite this, Notcoin has managed to attract a large user base and investment.

Ambitious Plans for the Future in Notcoin's Roadmap

Notcoin's roadmap hints at exciting possibilities.

The project aims to capitalise on Telegram's massive user base of 900 million to further inflate Notcoin's popularity.

A key focus is to expand earning potential by a factor of ten.

This ambitious goal is coupled with plans to introduce new gaming levels, enable users to share earnings, and streamline the process for new projects to launch campaigns within the Notcoin app.

Can Notcoin Sustain the Momentum?

The emergence of tap-to-earn games on Telegram presents a fascinating development with the potential to bridge the gap between mainstream users and the cryptocurrency space.

However, as Notcoin's future becomes increasingly reliant on maintaining and rewarding its expanding user base, questions arise about its ability to do so effectively.

While the project outlines ambitious plans including game integration, staking opportunities, trading bot functionality, and an NFT voucher/reward program, the absence of a whitepaper raises concerns regarding its long-term viability.

In contrast, Hamster Kombat demonstrates significant potential through its ongoing development of innovative features within the Telegram gaming ecosystem.

Should Notcoin fail to leverage its substantial user base and sustain its development efforts over the long term, it risks being overshadowed by the momentum and innovation of Hamster Kombat.

How Long Can Tap-to-Earn Games Survive on Telegram

Tap-to-earn games on Telegram represent an exciting development in the cryptocurrency space, offering a potential bridge to mainstream adoption.

These games allow users to earn cryptocurrency rewards by completing various in-game activities, making them accessible to a wider audience beyond traditional crypto enthusiasts.

With the emergence of projects like Notcoin and Hamster Kombat, which offer features like game integration, staking opportunities, and NFT voucher/reward programs, the landscape of tap-to-earn games on Telegram continues to evolve rapidly.

However, the long-term success of these projects will depend on their ability to retain players, deliver engaging experiences, and build trust through transparent development practices amidst the ongoing digital gold rush.

AI crypto tokens have emerged as a trending topic within the cryptocurrency ecosystem, capturing the attention of enthusiasts and investors alike.

These tokens have experienced a significant uptrend in the first few months of 2024, reaching a peak in February with soaring trading volumes and market valuations across various exchanges.

Data from Bitget, a cryptocurrency platform, shows that the AI token zone saw a remarkable 400% increase in trading volume throughout February, achieving a total market capitalisation exceeding $39 billion.

This surge has been largely driven by investors flocking to AI-focused projects such as Worldcoin (WLD), Livepeer (LPT), and Arkham (ARKM), whose prices have skyrocketed in recent months.

But despite notable advancements in AI technology, the space remains in its early stages.

However, over the past week, tokens like SingularityNET (AGIX), Fetch AI (FET), and Ocean Protocol (OCEAN) have seen declines of over 20%: FET is down 25.8%, AGIX by 24.0%, and OCEAN by 23.5%.

This contrasts sharply with March, when alliance member tokens rallied following the initial merger announcement.

In addition, AI-related tokens have been languishing, mirroring the broader cryptocurrency market's struggles.

According to CoinGecko, the market capitalisation of AI crypto tokens plummeted by 6% in the past 24 hours, reaching $33.286 billion as of Tuesday.

And at the time of writing, it has dropped further to $31.6 billion, a 7.8% change in the last 24 hours.

The Artificial Superintelligence Alliance Delays its Proposed Token Merger

The Artificial Superintelligence Alliance has postponed the date for its planned token merger, as announced on Tuesday.

The consolidation of AI-themed cryptocurrencies FET, AGIX, and OCEAN into a new ASI token will now occur on 15 July.

https://t.co/jf83tXYS2P

— Artificial Superintelligence Alliance (@ASI_Alliance) June 11, 2024

The alliance, a collective of AI-focused blockchain developers including SingularityNET, Fetch AI, and Ocean Protocol, initially declared their intention to merge their tokens into the ASI token in late March.

The total supply of the new token is set at 2.63055 billion.

This move is aimed at establishing ASI as the pre-eminent open-source, decentralised network in the AI industry, challenging the dominance of major tech companies in AI development and commercialisation.

The merger date was originally scheduled for 13 June.

Fetch AI CEO Humayun Sheikh, who also chairs the board of the Artificial Superintelligence Alliance, stated that the group is collaborating with centralised exchanges (CEXs) to complete the necessary preparations.

He said:

"Due to technical constraints and the demanding regulatory environment, we recently became aware of the need to delay the merger to ensure we meet the exacting processes required for our tokenholders.”

He emphasized that the delay does not hinder the substantial progress made toward the creation of a decentralised superintelligence network.

2/ Why the delay? The rescheduling allows us to exceed the needs and technical requirements of our respective ecosystem partners. This ensures a seamless transition to the new ASI network and token.

— Fetch.ai (@Fetch_ai) June 11, 2024

He added:

“While the finalisation of the ASI token merger is now scheduled for July due to necessary adjustments by our partners, the commitment and vision driving this alliance remain stronger than ever…Our teams are actively working with centralised exchanges to finalise the remaining steps.”

Ben Goertzel, founder and CEO of SingularityNET Foundation and CEO of the Artificial Superintelligence Alliance, remarked that the three-way token merger signifies a significant milestone.

He anticipates a succession of increasingly exciting developments that will propel the ecosystem's growth.

Announcing the revised timeline for our three-way token merger with @oceanprotocol and @Fetch_ai.

This change ensures the merger is carried out with the highest standards of accuracy and efficiency.

Learn more 👇 https://t.co/86DAnMagSC

— SingularityNET (@SingularityNET) June 11, 2024

In a statement, he noted that:

“The finalisation of the three-way tokenomic merger on July 15 will be a major milestone. We anticipate a series of progressively more exciting milestones after that as we leverage our $ASI token-based network to move toward increasingly capable AI systems and, in time, actual superintelligence.”

Bruce Pon, founder and CEO of Ocean Protocol and board director in the Artificial Superintelligence Alliance Council added:

"We appreciate the patience of the community and look forward to a combined $ASI token that is supported by all partners, exchanges and token holders.”

🔄 Key Merger Facts:

→The existing $FET , $AGIX , and $OCEAN tokens will continue to trade independently on exchanges until the final integrations are completed.

→Once ready, they will merge into the $ASI token, marking a significant step in the ASI future.

— Ocean Protocol (@oceanprotocol) June 11, 2024

The projects cited the need to meet their ecosystem partners' technical requirements as the reason for the delay.

They explained that the rescheduling is intended to ensure a smooth transition to the new ASI network and token, given the complex integrations and coordination required for the token merger.

Initially, FET token holders were to migrate to ASI through a token migration contract on 11 June, with AGIX and OCEAN holders following at a later date.

Now, all token holders will transition to the new ASI token concurrently on 15 July.

Until that time, FET, AGIX, and OCEAN tokens will continue to be traded independently on exchanges.

Apple AI's Flashy Upgrades Met with Lackluster Response

At the Worldwide Developer Conference (WWDC) on Monday, Apple unveiled its foray into the generative AI domain with the introduction of Apple Intelligence.

CEO Tim Cook presented forthcoming enhancements to Siri, cloud services, and integration with OpenAI's ChatGPT, which had been widely anticipated by observers and enthusiasts.

However, the announcement failed to ignite excitement among investors, who were underwhelmed by the details of Apple's AI strategy.

$AAPL this is about the worst possible WWDC

Extremely underwhelming on "Apple Intelligence" and only gave the minimum expected functionality with the ChatGPT integration, giving users only access to the free 4o

AAPL remains WELL behind the curve on AI

— 247 Drip💧 (@247_drip) June 10, 2024

As a result, Apple's shares declined by nearly 2% during the day, even as the S&P 500 and Nasdaq reached new record highs.

Following Apple's entry into AI, AI-related cryptocurrencies further extended their losses on Tuesday.

According to data from CoinGecko, the AI category of digital assets shed 6% of its total market capitalisation within the past 24 hours, reaching $33.286 billion on Tuesday.

Conventionally, positive AI-related announcements tend to stimulate gains in asset prices, yet Apple's AI initiative did not yield the expected positive response.

Moreover, Elon Musk criticised the tech giant's move, expressing concerns over potential compromises in user security and privacy.

And visitors will have to check their Apple devices at the door, where they will be stored in a Faraday cage

— Elon Musk (@elonmusk) June 10, 2024

It’s patently absurd that Apple isn’t smart enough to make their own AI, yet is somehow capable of ensuring that OpenAI will protect your security & privacy!

Apple has no clue what’s actually going on once they hand your data over to OpenAI. They’re selling you down the river.

— Elon Musk (@elonmusk) June 10, 2024

AI Tokens on a Downward Spiral

Cryptocurrencies associated with AI experienced a downturn on Monday, as Apple's much-anticipated annual developers conference failed to enthuse traders.

Tokens such as Render (RNDR), FET, and AGIX saw declines of 3%-5% over the past 24 hours, while Bittensor's TAO fell by nearly 6% within the same period.

Layer-1 network Near Protocol (NEAR) also recorded a 3.2% drop.

This decline occurred amidst high expectations that Apple would unveil its AI strategies and demonstrate how it would integrate artificial intelligence into its products at this week's WWDC2024.

Regarding the Artificial Superintelligence Alliance's decision to postpone their proposed token merger, it remains uncertain whether the delay had an immediate impact on the prices of the three coins involved.

AI Tokens FET, AGIX, OCEAN Drop Amid Bitcoin Decline and Merger Delay

AI tokens FET, AGIX, and OCEAN dropped over 7% as a merger delay was announced, extending the timeline for their unification under the ASI token.#Blockchain #CryptoNewshttps://t.co/u2OIV4J4sS

— Global Crypto News (@GlobalCNNews) June 11, 2024

This is because AI-related tokens, along with the broader cryptocurrency market, have been in a slump.

🐂The AI coin market has endured an overall decrease in the last 7 days, with the most notable drop by https://t.co/9Tx4cqH6sT, which decreased by 21.3%.📉 Despite the current fluctuations, we remain optimistic about AI's long-term development and the financial value of AI coins.… pic.twitter.com/51kbq0zVAJ

— GainFi - Web3 AI Fitness App｜DePIN (@GainFi_Official) June 10, 2024

The overall market capitalisation for AI tokens is down 7.8% for the day, as reported by CoinGecko.

The individual tokens of ASI members are also trading in the red: AGIX is at $0.657, down 6.4% for the day; FET is at $1.53, down 6.8% for the day; and OCEAN is at $0.6764, down 5.5% for the day.

Over the past seven days, all three tokens have seen losses exceeding 20%: FET is down 25.8%, AGIX by 24.0%, and OCEAN is down 23.5%.

So What Are AI Tokens?

AI tokens are cryptocurrencies that support AI-based projects, applications, and services within the blockchain ecosystem.

They serve three pivotal roles:

Facilitating Transactions: AI tokens act as the medium of exchange within AI-powered platforms, allowing users to pay for services, access data, and engage in platform activities.

Enabling Protocol Governance: These tokens often confer governance rights to holders, empowering them to participate in decision-making processes that shape the development and direction of the AI project or platform.

Incentivising Contributions: Users who contribute to the growth of the AI protocol or project—by providing data, computational resources, or developing AI applications—can receive rewards in the form of AI tokens.

Despite their significant roles, AI tokens remain technically complex and volatile, similar to most cryptocurrencies.

AI Tokens' Downturn is Short-Term But Others Unconvinced

Crypto trader Matthew Hyland believes that the downturn would not last forever.

#NVDA surging#AI coins quiet now but don't expect that to last pic.twitter.com/3JTSxZQ16d

— Matthew Hyland (@MatthewHyland_) May 28, 2024

But some sceptics question the intrinsic value of AI tokens.

In a recent report, Coinbase analyst David Han posited that AI-related tokens might be driven more by hype than by genuine value, particularly in the short to medium term.

Although he recognised that certain crypto-AI tokens still offer profitable opportunities, he emphasized that the long-term viability of the ecosystem will depend on more than just the decentralisation of AI components.

In a more critical assessment of the market, Albert Edwards, the chief global strategist for financial services giant Société Générale, drew parallels between the AI token frenzy and the numerous financial bubbles observed in history.

He pointed out:

“Every bubble has a compelling narrative. The current narrative centers on the anticipation of an AI-driven surge in corporate profits to fully justify the current stratospheric valuations. Those of us who lived through the late 1990s [tech] bubble have heard it all before and roll our eyes skyward."

Toufi Saliba, CEO of HyperCycle, a blockchain project connecting AI machines, said:

“Whether this growth is sustainable in the long term will depend on how effectively projects like HyperCycle, SingularityNET, Fetch.ai, Ocean Protocol, and other decentralised AI technologies continue to evolve and deliver value to businesses and consumers."

The cross-chain interoperability protocol Wormhole released the tokenomics model for its governance token $W in early February this year. In March, it airdropped a large number of tokens to various protocol communities, NFTs, and eligible users, sparking heated discussions in the community.

Last Thursday (6th), the official Wormhole community announced a $W staking plan, allowing users to participate in governance through staking $W . However, for Wormhole, which had already conducted an airdrop, this staking plan seemed to lack sufficient appeal, especially given the low price of $W at that time.

Stake For Governance is now live for W token holders!

This is your opportunity to participate in the governance and impact the future direction of the Wormhole DAO and platform.

Get started now at the @tallyxyz Governance Portal: https://t.co/PrL3F8cE2C pic.twitter.com/XrVhMD991t

— Wormhole (@wormhole) June 6, 2024

Nevertheless, a post on the following day (7th) regarding interaction with the Monad public chain sparked community discussion and led to a surge in $W staking.

Expectations of a Monad Airdrop

In April, Monad Labs announced the completion of a $225 million financing round, led by Paradigm, with participation from Electric Capital and Greenoaks, among others.

Notably, part of Wormhole's March airdrop was allocated to Monad's Discord community. At that time, anyone who obtained the "nads" role in the Monad Discord community received up to 8,000 $W tokens (worth about $10,000 at the opening price).

Simultaneously with the launch of the staking plan, Wormhole also introduced a limited-time task on the decentralized mission platform Galxe, which included a requirement to stake $W tokens. Users who completed the task received the "Steakorrr" role in the Discord community. Many believed this was one way to qualify for the Monad airdrop.

$W Price Reversal

Due to the expectations of a Monad airdrop, the Wormhole staking plan became extremely popular, driving the price of $W up from a low of $0.62 on the 6th to a high of $0.76, an increase of 22.5%.

However, since the limited-time task on Galxe only lasted until June 10th and Wormhole's staking plan did not lock the $W tokens, many users sold off their $W tokens after completing the task. As a result, the price of $W continued to plummet, reporting $0.5497 at the time of writing, down 11.8% in the past 24 hours.

Sandwich bots have long been causing disruption on the Solana network.

In response, the Solana Foundation has removed a group of validator operators from its delegation programme.

This decisive action addresses the operators' involvement in executing "sandwich attacks" on Solana users.

Solana Foundation restricts validators involved in sandwich attacks

The Solana Foundation has announced the removal of a group of validator operators from its delegation program due to their involvement in sandwich attacks on Solana users. The decision aims to ensure that the… pic.twitter.com/PzTne5OrVo

— EchoeWeb (@Echoeweb) June 10, 2024

Enabling Sandwich Attacks Resulted in Validators being Stricken Off

A cohort of Solana (SOL) validators is facing financial repercussions for allegedly aiding economic attacks against cryptocurrency traders.

Over 30 validator operators were removed from the Solana Foundation Delegation Programme, according to a source with knowledge of the situation.

Although they can still act as validators on the network, they are no longer entitled to receive performance-based incentives for validating transactions on the Solana blockchain.

The decision was based on the Solana Foundation rules prohibiting validators from malicious activity. The guilty validators won’t be assigned any delegation work moving forward. pic.twitter.com/WGT7hByv8J

— Bard Ramsden (@bard_ramsden) June 11, 2024

It has been mentioned that many of these operators were of Russian origin.

This action intensifies a prolonged covert conflict between prominent figures in the Solana validator community and an underground network of validators suspected of exploiting traders for financial gain through a tactic known as a "sandwich attack."

This strategy involves bots executing trades ahead of and immediately after those of unsuspecting traders, a method that falls under the category of maximal extractable value (MEV) tactics on blockchains that utilise mempools—essentially queues for unconfirmed transactions.

Solana does not have a native mempool, but the widely used validator software developed by Jito Labs previously did.

In the Solana Foundation's official Discord channel, Tim Garcia, the Solana Validator Relations Lead, stated that the decisions to remove these validators are final and that enforcement actions will persist as they identify operators engaging in mempool activities that enable sandwich attacks.

Garcia emphasized that such tactics contravene the Solana Foundation's guidelines.

Garcia warned:

“Decisions in this matter are final. Enforcement actions are ongoing as we detect operators participating in mempools which allow sandwich attacks.”

Mert Mumtaz, co-founder of Solana RPC provider Helius, explained that this move is intended to ensure that the foundation does not delegate to validators who engage in malicious attacks against retail users.

Mumtaz clarified that sandwich attacks are a pernicious form of MEV attack that systematically disadvantages retail users by ensuring they receive the least favourable prices, while the attackers reap all the profits.

Mumtaz said:

“A sandwich attack is a malicious form of MEV attack that ensures retail always gets the worst possible price while extracting all the profit for themselves."

Despite Solana's design inherently preventing such attacks, some individuals have modified their validators to permit sandwiching.

He also indicated that stake pools may adopt similar policies against sandwich attacks in the future.

I'm sure a lot of super honest people who have a perfect understanding of MEV on Solana and the Foundation Delegation program will try to misrepresent reality to feel better about their bags

For those genuinely curious, I'll summarize:

- a sandwich attack is a malicious form of… pic.twitter.com/KhfGBgGuyT

— mert | helius | hSOL (@0xMert_) June 10, 2024

He added:

“Most importantly, these operators can still do whatever they want; it's a permissionless network—it just won’t be Foundation subsidized."

Dummy's Guide to Sandwich Attack & its Connection to MEV

A sandwich attack involves a malicious actor taking advantage of other traders' transactions to make a profit.

Here is a simplified explanation:

Imagine you want to buy some crypto tokens, so you place a transaction on the blockchain.

A malicious actor sees your transaction before it gets processed.

The attacker quickly places a buy order for the same token just before your transaction (this is the first "slice of bread" in the sandwich).

Your transaction goes through, and the demand from your purchase pushes the token's price up.

The attacker then places a sell order immediately after your transaction, selling the tokens they just bought at the now higher price (this is the second "slice of bread").

As a result, the attacker makes a profit from the price increase that your purchase caused, and you end up buying the tokens at a higher price than you would have without the attack.

How is it connected to MEV?

MEV refers to the maximum profit that a validator or miner can extract from transaction manipulation, beyond the standard block rewards and gas fees.

In the case of a sandwich attack, the attacker extracts value from the normal sequence of transactions by placing their own transactions in strategic positions to profit.

Validators or miners who can see the pending transactions in the mempool (a sort of waiting area for transactions) might exploit this by rearranging transactions to maximise their own profit, often at the expense of regular users.

In a nutshell, a sandwich attack exploits the timing and sequence of transactions to benefit the attacker, and MEV represents the profit potential from such manipulations.

Not the First Sandwich Attack

In March, during the peak of Solana's meme coin craze, Jito Labs disabled the mempool function to protect traders from the relentless and costly sandwich attacks.

The CEO of Jito positioned this decision as being for the greater good of the Solana ecosystem, even though it eliminated a potential revenue source for validators, the server operators who maintain the decentralised network's operations.

Rather than eradicating the issue, Jito's action drove it underground.

Rumours soon surfaced of private mempools where operators were earning substantial sums, sometimes hundreds of thousands of dollars, by facilitating sandwich attacks.

One proposal from infrastructure operator DeezNode offered validators who joined its private mempool a 50% share of the profits generated by MEV.

In May, Solana validators' earnings from MEV surpassed those of the Ethereum blockchain.

This revenue has been growing rapidly since mid-March and has recently reached new highs.

Intriguingly, Jito is projected to generate approximately $25 million in revenue over the next year, according to Token Terminal.

Jito's business model involves taking a 5% cut of the MEV tips paid to Solana validators.

A recent Jito Foundation governance post suggests that 10% of the JitoSOL pool is being delegated to validators operating private mempools.

The Jito Foundation has proposed additional economic sanctions against these validators by restricting more staked SOL.

The Solana Foundation's delegation blacklist, which targets a total of 32 operators holding 1.5 million SOL, or about 0.5% of the program's stake, is a small fraction of the delegation programme, as reported by a source.

Crypto Community Displeased with the Resolution

Despite the removal from the Solana Foundation Delegation Programme, these operators can continue their activities on the network, given Solana's permissionless nature.

However, they will forfeit certain advantages: the programme aims to support validators by delegating SOL tokens, enabling operation without the need for a significant token holding, based on performance criteria.

The decision has sparked criticism within the cryptocurrency community, with some suggesting it underscores Solana's centralisation relative to other blockchains.

solana’s real scaling issue is trying not to expose how centralized it is while trying to protect the network from malicious attacks in the process pic.twitter.com/C3rCbHB0jg

— Mike Three (@0xMikeThree) June 10, 2024

This debate resurfaces whenever the network experiences downtime, reigniting the argument that the SOL blockchain exhibits centralised tendencies.

Open Nature of Blockchain Might Not Always Be Good

In 2022, a study of transaction data from Uniswap V2 and Sushiswap revealed that in April 2021, sandwich attacks occurred at an average rate of one every 30 seconds, totalling 84,000 for the month.

Source: Impact and User Perception of Sandwich Attacks in the DeFi Ecosystem study

The cryptocurrency realm is a fertile ground for innovative ideas and opportunities, yet these advancements also bring unforeseen risks.

One such risk is the elusive "Sandwich Attack," which can wreak havoc in decentralised finance (DeFi).

Even Ethereum co-founder Vitalik Buterin issued a cautionary note about these deceptive tactics as far back as 2018.

Sandwich bots and MEV, while ethically dubious, highlight the transparency inherent in Web3.

They exemplify the open nature of blockchain technology, where every transaction is visible to all.

This raises a significant question: Is it preferable to have a high degree of freedom in the crypto world, accepting that clever manipulations may occur, or should the focus be on creating an environment that is extremely secure, albeit less free?

Thailand Revokes Zipmex’s License After Compliance Failures

On May 28, Thailand’s Ministry of Finance revoked Zipmex’s digital asset business license, acting on recommendations from the Securities and Exchange Commission (SEC). This decision followed the exchange’s repeated failures to comply with regulatory directives.

In a statement on Monday, the SEC detailed its concerns. Firstly, it highlighted issues regarding the firm’s financial health, suggesting potential risks to customers. Secondly, it criticized Zipmex’s management structure and staffing as insufficient for running the business responsibly and adhering to regulations.

Earlier this year, Zipmex faced scrutiny from Thai regulators. In January, the SEC identified problems with the exchange's finances and management. The SEC ordered the company to make necessary changes, but Zipmex failed to comply. As a result, the SEC temporarily suspended its trading and brokerage services in February, giving the company a brief period to address the issues.

Zipmex did not respond to Cryptonews' request for comment by press time.

SEC Investigation and Subsequent Actions

The situation worsened when the SEC launched an investigation, accusing former CEO Akarlap Yimwilai of fraud and deception. The investigation revealed that Zipmex had transferred customer funds from Thai wallets to overseas accounts without prior notification to regulators, contradicting earlier information provided by the exchange and raising serious trust issues.

Despite the suspension and deadline, Zipmex failed to resolve the compliance issues. By February 21, the SEC concluded that the exchange had not made the necessary operational changes.

The SEC has now set strict guidelines for Zipmex regarding customer asset management. Zipmex is required to return assets to customers within 15 days. If customers do not claim their assets, Zipmex must secure them in a reliable system and report each step of this process to the SEC promptly.

The advent of artificial intelligence (AI) has demonstrated its potential to catalyse beneficial innovation across various industries, including the cryptoasset sector.

However, as with any burgeoning technology, there is a concern that malicious actors may exploit these advancements for illegal activities, capitalising on the hype, novel capabilities, and regulatory gaps.

Recognising the early signs of illicit activity is crucial for fostering sustainable innovation and addressing emerging risks at their inception.

While AI-enhanced crypto crime has not yet become a prevalent threat, Elliptic, a blockchain analytics firm, emphasizes the importance of proactively identifying and mitigating potential emerging crime trends to promote long-term sustainable innovation.

AI Drives Evolution of Crypto Crime

Elliptic has recently published a comprehensive blog titled "The State of AI-Enabled Crypto Crime: Emerging Typologies and Trends to Look Out For," which highlights the concerning increase in the use of AI to perpetrate various crypto crimes.

Additionally, their new horizon scanning report, "AI-enabled Crime in the Cryptoasset Ecosystem," reveals that AI-facilitated crimes within the cryptocurrency ecosystem are still in their early stages.

AI-enhanced crypto crime is not seen as a mainstream threat just yet, but by monitoring behaviors we can get ahead of the curve and promote long-term sustainable innovation.

Read our latest blog ➡️ https://t.co/cuoN0rpd62

Download the report ➡️ https://t.co/HkRyGrurVG

— Elliptic (@elliptic) June 10, 2024

Timely and strategic interventions by stakeholders can prevent these activities from becoming widespread.

Senior crypto threat researcher at Elliptic, Dr. Arda Akartuna, said:

“[...] these trends are currently in their relative infancy and avenues for prevention do exist. Stakeholders across industries will need to come together to devise best practices early on, so that these trends do not become mainstream."

The report also notes a significant increase in tokens associated with AI-related keywords such as GPT, OpenAI, and Bard, with approximately 4,500 of these tokens residing on the BNB Smart Chain.

The emergence of AI-driven crypto crimes heralds a new phase of cyber threats, as the Elliptic report exposes how cutting-edge technologies are being misused for deepfake scams, state-sponsored attacks, and other complex illicit activities.

Crypto Criminals Go AI: Elliptic Warns of Deepfake Scams & More

Be aware! Crypto criminals are getting smarter with AI. Stay on top of the latest scams to protect your crypto investments. New report by Elliptic warns crypto crime is entering a new era with the rise of AI. From… pic.twitter.com/V3EZUx8OTb

— CRUXX | Crypto News App (@Coin_CRUXX) June 10, 2024

The report identifies five key typologies of how crypto criminals could leverage AI to augment their criminal endeavors, based on current indicators.

It also underscores the increasing use of generative AI in cryptocurrency scams, identifying it as a critical area where crypto professionals and law enforcement can join forces to combat these emerging threats.

Generative AI: A New Tool for Crypto Scammers

Participants in the cryptocurrency industry are likely familiar with investment scams, many of which now employ deepfakes of celebrities and public figures to promote fraudulent schemes.

Notable individuals such as Elon Musk, former Singaporean Prime Minister Lee Hsien Loong, and the current and former Presidents of Taiwan, Tsai Ing-wen and Lai Ching-te, have been impersonated in these scams.

These promotional deepfakes are commonly disseminated on platforms like TikTok and X.

The report noted:

“Crypto giveaway and doubling scams are increasingly using deepfake videos of crypto CEOs and celebrities to encourage victims to send funds to scam crypto addresses.”

Other scams involve the use of AI to fabricate aspects of a crypto 'business' to enhance its credibility.

In 2022, Binance's former Chief Communications Officer, Patrick Hillmann, was the subject of a deepfake scam where his likeness was used to deceive potential victims within the crypto community.

Patrick Hillmann, CCO at Binance, encourages vigilance against scams after scammers made a deepfake and impersonated him on Zoom calls. pic.twitter.com/NRz4TEM2j3

— Morning Brew ☕️ (@MorningBrew) August 23, 2022

AI can be misused in several ways to make crypto scams and fraudulent activities more persuasive:

-Suggesting celebrity or official endorsement: Deepfakes, as seen with the impersonations of Singaporean and Taiwanese leaders, can falsely suggest that a project has legitimate or official support, thereby increasing its appeal to potential victims.

Former PM Lee warned:

“This is extremely worrying. People watching the video may be fooled into thinking that I really said those words. Please remember, if something sounds too good to be true, do proceed with caution.”

-Streamlining scam operations: Large-scale scams, such as the Sha Zhu Pan ('pig butchering') crypto romance scams originating from Southeast Asia, involve prolonged and intricate communications with victims. There is limited evidence suggesting that these illicit operations are exploring AI to enhance their efficiency.

-Deepfake executive impersonations: A small number of high-profile cases have involved scammers posing as high-level executives during video conferences for corporate espionage or authorising significant transactions. At least one such case targeted the CCO of a major cryptocurrency exchange.

🚀🚨 Beware! Crypto scammers hijacked 35+ @YouTube channels, spreading #DeepFake #crypto #scam of @elonmusk. Scammers abuse #SpaceX Starship's 4th flight test, luring victims with double profits. Stay vigilant! pic.twitter.com/SBDpSDDWZ7

— Avast Threat Labs (@AvastThreatLabs) June 6, 2024

-Generating fake marketing materials: AI-generated images and videos can lend an air of legitimacy to scam websites by depicting supposed employees, headquarters, office spaces, and other visuals, creating the illusion of a genuine investment company without revealing the true identities or locations of the scammers.

Fortunately, there are several red flags that can help individuals avoid falling prey to deepfake scams.

To authenticate a video, one can examine the synchronisation of lip movements with speech, the presence of shadows where expected, and the naturalness of facial activities like blinking.

The report stated:

“There are, fortunately, a number of red flag indicators that can help prevent you from falling victim to deepfake scams. To verify the video's authenticity, you can check whether lip movements and voices synchronise, make sure shadows appear where you expect them to, and check that facial activity such as blinking looks natural.”

Spotlight on "AI-Associated" Scams, Tokens, and Market Exploits

Creating a token on many blockchains is a straightforward process, a fact that scammers have exploited to generate hype and inflate token prices before liquidating their holdings for substantial profits.

This action causes prices to plummet, leaving investors with losses and worthless investments in what is known as a "rug-pull."

Additionally, organised groups engage in sudden buying and selling of tokens to profit from market manipulation, commonly referred to as "pump-and-dump" schemes.

Scammers may also hype their tokens by falsely claiming affiliations with major events or companies.

Coin Laundering Process by ChatGPT-related Scammers

AI has been a recent focal point for scam tokens, with hundreds listed on various blockchains containing variations of "GPT" in their names, such as "GPT4 Token," "CryptoGPT," and "GPT Coin."

While some of these tokens may represent legitimate projects, others have been promoted in amateur trading forums by scammers who falsely assert official connections with ChatGPT or other reputable AI entities.

Source: Elliptic

Large Language Models Leveraged in Cyberattacks

Advancements in AI, exemplified by tools like ChatGPT, have sparked a vigorous debate about their potential use in code auditing and bug detection, as well as the risk that malicious hackers could exploit these same capabilities to identify and engineer exploits.

Reports from Microsoft and OpenAI have documented attempts by Russian and North Korean threat actors in this vein, yet white hat hackers argue that the technology is not yet sufficiently advanced for such applications.

ChatGPT and similar mainstream AI tools have improved in recognising and rejecting malicious prompts, prompting cybercriminals to seek out AI services without ethical constraints on dark web forums.

This demand has been met by paid tools such as HackedGPT and WormGPT, which openly advertise their abilities to assist with carding, phishing, malware development, vulnerability scanning, hacking, crafting malicious smart contracts, cyberstalking, harassment, identity theft, disseminating private sensitive material, and other unethical activities for financial gain, whether legal or illegal.

These "unethical GPTs" have garnered mixed reviews from their users, and blockchain analytics platforms possess the capability to trace payments made to their administrators by subscribers.

Increasing Scale of Crypto Scams and Disinformation

Certain crypto scammers may execute a single scam operation and then retire after amassing sufficient illicit funds or once their scheme has been widely exposed.

However, many threat actor groups engage in a pattern of cyclical scamming operations.

They create scam investment, airdrop, or giveaway sites, promote them extensively on social media and messaging apps, and then execute a "rug pull" once the scam nature of their sites becomes a subject of controversy among victims.

The cycle then restarts with a new site and fresh marketing tactics.

Cycling through scam sites can be a resource-intensive process, and some illicit groups are seeking to enhance efficiency through the application of AI.

One scam-as-a-service provider has boasted of using AI to automatically design scam website interfaces, optimised for search engine optimisation (SEO) considerations.

Elliptic investigator shows the cross-chain obfuscation patterns of funds originating from drainer operator wallets

Identity Theft Not Just for Crypto

Identity theft and the creation of false documents are among the most entrenched criminal activities on the dark web.

Cybercrime forums frequently feature advertisements from cybercriminals who pride themselves on their proficiency with photo editing software, offering to produce images of counterfeit passports, ID cards, and utility bills within minutes.

Now, some of these document fabrication services are investigating the use of AI to expand their operations.

One such service, which uses the likeness of Keanu Reeves's John Wick character in its advertising, has both claimed and denied using AI to manipulate images.

Elliptic has identified a cryptocurrency address used for payments to this service, which has received enough transactions to generate nearly 5,000 fake documents in just one month.

Shrinking Safety Net as Cyber Threats Evolve

It is important to reiterate that the benefits of emerging technologies like AI far outweigh their potential for criminal exploitation.

Anne Neuberger, the US Deputy National Security Advisor for Cyber and Emerging Technologies, delved into the mounting apprehensions surrounding the misuse of AI.

She emphasized that AI is not solely relegated to commonplace scams but is increasingly wielded in intricate criminal endeavours:

“Throughout numerous dark web cybercrime forums, Elliptic has identified chatter that explores the use of LLMs to reverse-engineer crypto wallet seed phrases, bypassing authentication for services such as OnlyFans, and providing alternatives to image ‘undressing’ manipulation services such as DeepNude.”

The intersection of AI and cryptocurrency offers both tremendous opportunities and significant challenges.

While AI can bolster security and efficiency in the crypto space, its potential for misuse underscores the necessity for a strategic and informed response.

The report recommends a set of prevention measures collectively known as DECODE, which stands for Detect, Educate, Cooperate, Defend, and Enforce.

The majority of these threats are still in their early stages, and with measured early responses from responsible industry partners, they may be effectively mitigated before they become widespread and ensure that technologies like AI can continue to innovate sustainably.

But with cyber threats evolving at an alarming rate, the safety net shrinks further.

Will AI-driven crypto crimes eventually cease to exist? No.

But what we can do is to be more informed and alert to mitigate the risks and have a better fighting chance.

Binance founder and former CEO Changpeng Zhao entered a California prison on June 1 to serve his sentence for violating U.S. anti-money laundering regulations. With the soaring price of Binance Coin (BNB), his net worth jumped by $4.1 billion. U.S. media revealed that he has become the wealthiest incarcerated individual in the country.

U.S. Judge Richard Jones sentenced Changpeng Zhao to four months in prison. The sentence was significantly lighter than the prosecution's request due to his voluntary surrender, willingness to take responsibility, lack of criminal history, and numerous support letters from industry figures, the crypto community, and family and friends.

Once the richest Chinese person, Changpeng Zhao’s wealth has continued to increase despite his imprisonment. According to Fortune, his net worth increased by $4.1 billion within a few months.

U.S. media reported that during his first week in prison, Binance Coin surged past $720 to a historic high, cementing his status as the wealthiest incarcerated individual in the U.S. This increase added $4.1 billion to his 2023 year-end valuation of $43 billion.

On Tuesday, June 11, during Asian trading hours, Binance Coin fell back to $624.30, but the bulls still controlled the market.

According to the 2023 Forbes billionaire rankings, Changpeng Zhao's current wealth places him between the 45th and 50th positions globally.

Although Changpeng Zhao has never publicly disclosed his Binance Coin holdings, the 2017 Binance Coin whitepaper states that 80 million Binance Coins were allocated to the founding team. At current market prices, this is equivalent to about $51.2 billion.

Last Saturday, Binance announced that its global registered users had reached 200 million. Binance CEO Richard Teng stated that within just two years and two months, the number of users grew from 100 million to 200 million, marking not only Binance's victory but also the robust growth and maturity of the broader crypto industry.

“This reflects the transition of crypto assets from ‘early adopters’ to ‘early majority,’ indicating that more people worldwide are beginning to embrace crypto assets and the limitless possibilities they bring,” he mentioned.

Richard added, “We are very honored and humbled to welcome 200 million registered users who trust Binance. This achievement highlights the continued trust in the Binance ecosystem by the crypto community and industry participants.”

“We cherish this trust. As a user-centric platform, we are always committed to meeting the growing needs of our users and prioritizing them.”

Looking ahead, he pointed out that Binance remains focused on promoting inclusive finance and innovation. As the industry moves towards the collective goal of attracting 1 billion users, Binance’s determination to foster sustainable growth in the crypto asset field has become even stronger.

“This industry’s evolution is an exciting journey, and Binance is thrilled to be at the forefront,” he concluded.

According to CoinTelegraph, Binance’s user growth has been rapid. By the end of 2022, Binance had about 130 million registered users, and in 2023, it added 40 million users, bringing the total to 170 million. If the trend continues, Binance is expected to reach 300 million total users by 2026.

Based on Triple-A research, the number of global cryptocurrency holders will reach 562 million in 2024, an increase of 142 million from 420 million in 2023. This data shows that Binance users account for approximately 36% of the global crypto user base.

The decentralized social platform Friend.tech officially launched in August last year. It quickly gained popularity due to its unique gameplay, airdrop expectations, and support from renowned venture capital firms such as Paradigm. However, this wave of enthusiasm significantly waned by October last year. Interest was only reignited in April this year when it announced the upcoming release of V2 and the opening of airdrop claims.

Friend.tech opened the airdrop claim for the FRIEND token on May 3 and launched the V2 version on May 4. However, since its launch, the price of FRIEND has been steadily declining. According to CoinGecko data, FRIEND is currently priced at $0.92, down from a peak of $169 on May 3, representing a drop of over 99%. In the past month alone, it has fallen by 56.6%.

Huang Licheng's Unrealized Loss of $7.7 Million

Notably, as FRIEND continues to plummet, well-known artist Machi Big Brother Huang Licheng, who has been closely following the direction of Friend.tech and is also the largest individual holder of FRIEND tokens, has suffered significant losses. On May 5, he tweeted that FRIEND's price would rise to $10, but this goal seems increasingly out of reach.

According to Lookonchain monitoring, since May 3, Huang Licheng has spent a total of 4975 ETH (approximately $15.6 million) to buy 8.6 million FRIEND tokens at an average price of $1.81. Based on the current price of $0.92, Huang Licheng has an unrealized loss of about $7.7 million.

Machi Big Brother(@machibigbrother) has been buying $FRIEND since May 3.

He has spent 4,975 $ETH($15.6M) to buy 8.6M $FRIEND at an average price of $1.81.

At the current price, he lost $7.9M on $FRIEND!https://t.co/j5UByo2jpN pic.twitter.com/tiew7f377A

— Lookonchain (@lookonchain) June 8, 2024

Can Friend.tech Regain Its Glory?

Defillama data shows that Friend.tech's TVL (Total Value Locked) peaked at $52.04 million in October last year but has been gradually declining since then, with a sharp drop starting in May this year. The current TVL is only about $9.73 million, indicating that V2 and the airdrop tokens have not successfully attracted users and funds back.

DUNE data shows that the number of traders and transactions for Friend V2 significantly decreased after mid-May. On June 8, there were only 139 traders and 449 transactions. The creation and number of creators for Clubs were also bleak, with only 33 creations and 33 creators on June 8.

Friend.tech is striving to regain its past popularity. Co-founder Racer first announced in May that they would migrate away from the Base chain and then announced on June 8 that they would partner with cryptocurrency infrastructure company Conduit to launch their own blockchain, Friendchain, using FRIEND as the gas token.

Encouraged by this news, FRIEND surged over 10% yesterday. However, whether Friendchain can save Friend.tech from its current bleak performance remains to be seen.

During the Dragon Boat Festival holiday, the crypto community was shaken by reports of OKX users lamenting that their accounts were hacked within 15 minutes, resulting in the theft of all tokens stored in their accounts, valued at nearly 5 million RMB. This quickly triggered widespread FUD (fear, uncertainty, and doubt) among many users.

1.答应兄弟们的，详细叙述下被盗的过程，这两天一直在外地，早晨在酒店吃完早餐，顺手翻推特，看到 #maneki 项目方更新了推特，也就是这个时候，在推特下方留言页面里，有人冒充项目方写了一个常见的“2）”，用过推特的都知道，有时候单页面内容写不下的时候，会在后面接着写。 pic.twitter.com/3MLYxEqq6v

— SilveryGray (@GraySilvery) June 9, 2024

On the 9th of this month, a user named "Leyan" in a Chinese social media group posted on Twitter X platform, stating, "5 million stolen in 15 minutes: How hackers breach OKX to steal user assets without any hindrance." Leyan claimed that all his assets in OKX were stolen by hackers, amounting to nearly 5 million RMB (approximately 22.5 million TWD), which were his lifetime savings.

《15分钟被卷走500万，为什么黑客进Okex交易所抢夺用户资产如入无人之境》
希望所有用OKEX交易所的用户都能看见这条推文！最近okex交易所盗币事件频发，我恰巧就是其中一名受害者，昨晚，我在ok交易所账户内的所有资产都被黑客盗走，接近500万，一辈子的积蓄全部被盗，前后不过15分钟！@okxchinese pic.twitter.com/8TwZtJ41TH

— 乐颜 (@huangshiyuan17) June 9, 2024

The sensational headline was intended to attract OKX's attention and prompt action. In the detailed account, Leyan mentioned that "hackers could log into my OKX account and add a whitelist for withdrawals without obtaining my verification code."

In the images posted by Leyan, it was evident that the email containing the withdrawal verification code was still unopened, yet all the tokens in the account had been withdrawn. This led many netizens to question if there was a vulnerability in the OKX system that allowed bypassing the verification code process to withdraw assets.

Similar Cases Within 24 Hours

Coincidentally, similar incidents of OKX users being hacked were reported multiple times within 24 hours. Netizen "Dr.Hash” Wesley" posted a video, claiming that his friend had $1 million stolen, which drew significant attention.

突发，群友ok直播被盗了100w u。@okx pic.twitter.com/PcOB1WtbAk

— Dr.Hash“Wesley” (@CryptoApprenti1) June 9, 2024

Another netizen, "Ludan," also mentioned that a friend had $800,000 stolen, with similar methods involved:

The OKX registration email was bombarded with spam.

The market value was used to frantically buy Ethereum.

Ethereum was withdrawn using a phone verification code.

无独有偶，昨日朋友在同一时间也发生了同样的事件，80万U，请@okx @OKXHelpDesk_cn @okxchinese 尽快跟进，是否存在安全隐患

1. ok关联邮箱被垃圾邮件轰炸
2. 市价疯狂买入以太
3. 通过手机短信验证码提走以太

设备信息：iphone，专门交易的设备，未曾点击任何链接。@CryptoApprenti1… https://t.co/MD7FAKW6uS pic.twitter.com/ZYUKWS0rx1

— 一颗卤蛋🥚Call Me Egg (@AsAnEgg) June 9, 2024

The spread of multiple hacking incidents not only caught the attention of OKX but also prompted SlowMist founder Yu Xian, who often tracks down victims in the crypto network, to conduct a preliminary analysis. He noted that the methods used to steal coins from the two victims were remarkably similar, including SMS messages showing locations outside Hong Kong and the creation of new APIs for trading and withdrawing.

Yu Xian indicated that this was a premeditated group operation.

两个不同的受害者，今天凌晨遭遇的交易所账号被盗币事件的手法及一些特征居然是相似的，除了 @AsAnEgg 提到的共性，还包括短信风险通知来自“香港”这个特征、创建了新的 API Key（有提现、交易权限，这也是为什么之前怀疑有对敲意图，目前看来可以排除了）。… https://t.co/pqIjqLhmkB

— Cos(余弦)😶‍🌫️ (@evilcos) June 9, 2024

Official Response: Platform Will Take Responsibility

if Accountable The victims described how OKX's customer service did not respond appropriately at the time of the incidents, leaving them disheartened and confused. Under the pressure of numerous netizens, OKX formally responded on Twitter, stating that if it is found to be a platform issue, they will take proactive measures:

“We take the reported ‘user asset theft on the exchange’ situation seriously and have contacted the affected users. We are currently investigating the relevant circumstances. If it is ultimately determined to be a platform responsibility, we will take proactive measures to address it. Additionally, we will announce the results immediately after the investigation concludes. Please be patient and refrain from unnecessary speculation. Thank you for your support.”

关于今日网络反馈的“交易所用户资产被盗”情况我们十分重视，已经与相关用户取得联系，目前正在就相关情况进行调查，如最终确定为平台责任平台会主动承担。此外，我们会在相关调查结束后第一时间公布结果，请各位耐心等待并停止不必要的猜测。感谢大家的支持。

— OKX中文 (@okxchinese) June 9, 2024

Just a few days ago, OKX was reported to have accidentally burned over $10 million worth of BTC while reorganizing wallets with a consolidation program.

With these latest user hacking reports and suspected platform vulnerabilities, the community is deeply concerned. We suggest that users worried about their token assets stored on the exchange withdraw them to a secure wallet until the situation is clarified.

Republican presidential candidate Donald Trump has positioned himself as a cryptocurrency advocate, dubbing himself a "crypto president" and criticising Democratic efforts to regulate the industry.

He vowed to reverse the anti-crypto stance of President Joe Biden and the United States (US) Securities and Exchange Commission (SEC) Chair Gary Gensler swiftly upon re-election.

While Trump expressed the importance of cryptocurrency and his support for the sector, he did not elaborate on a concrete policy framework.

Given his history of prioritising rhetoric over action, there is scepticism about whether his sudden enthusiasm for crypto will translate into meaningful policy changes or if it is merely a tactic to court crypto-friendly voters.

The depth of Trump's understanding of cryptocurrency and his ability to deliver on his promises remain iffy.

Trump Wants to Add the Moniker "Crypto President" to His Name

At a fundraiser hosted by tech venture capitalists David Sacks and Chamath Palihapitiya in the upscale Pacific Heights area, Trump garnered $12 million in donations.

The cryptocurrency sector, facing intense regulatory scrutiny and reeling from the 2022 bankruptcies of major firms that led to investor losses and exposed fraud, is actively seeking to influence US politics.

Trump emphasized the importance of crypto and his support for the industry, according to Republican National Committeewoman Harmeet Dhillon, though he did not provide specifics on his crypto policy plans.

Trevor Traina, a San Francisco-based tech executive and former Trump ambassador to Austria, said:

"He said he would be the crypto president."

JUST IN: 🇺🇸 Donald Trump pitched himself as the 'crypto president' at a San Francisco tech fundraiser.#Bitcoin #Trump #Crypto #USElection #election #Cryptocurrency pic.twitter.com/9hX3mrLEz3

— Crypto Popcorn🍿 (@crypto_popcorn_) June 8, 2024

Vying to unseat President Biden in the 5 November election, Trump has pledged to overturn Biden and Gensler's anti-crypto policies within an hour of taking office if re-elected.

Jacob Helberg, an adviser to data analytics provider Palantir, expressed:

"President Trump made clear that the Biden-Gensler crusade against crypto will grind to a halt within one hour of a second Trump administration."

He also mentioned Senator Elizabeth Warren's opposition to crypto.

Despite San Francisco's liberal leanings, several prominent local venture capitalists and crypto investors have endorsed Trump, citing concerns over what they perceive as excessive regulation.

The group of people supporting former President Donald Trump in San Francisco has grown a bit to about a couple hundred. Since they’re not allowed to gather as a group in the park, they’re staying on the sidewalk/bikeway along Marina Blvd. pic.twitter.com/82pQtqc7yW

— Sergio Quintana (@svqjournalist) June 6, 2024

Dhillon noted that executives from Coinbase, along with Gemini co-founders Tyler and Cameron Winklevoss and other prominent figures in the crypto industry, attended the event on Thursday.

Trump's First Official Rally Since Felony Conviction

Trump wrapped up a rally on 9 June in Las Vegas' sweltering 110-degree heat, preparing for a virtual interview with probation officers the next day as part of his hush money trial defense.

The interview will be conducted today via video conference from his Mar-a-Lago residence in Florida, with his lawyer Todd Blanche in attendance.

Former President Donald Trump held his first official campaign rally since his felony conviction Sunday in Las Vegas. CBS News has confirmed he’s scheduled to meet with his probation officer Monday – via Zoom, from his Mar-A-Lago home. pic.twitter.com/dTteGvvbr2

— CBS Evening News (@CBSEveningNews) June 10, 2024

Trump's campaign spokesman, Steven Cheung, said in statement Sunday:

“President Trump and his legal team are already taking necessary steps to challenge and defeat the lawless Manhattan DA case."

Although New York convicts typically meet with probation officials alone, Judge Juan Merchan has permitted Blanche's presence.

Trump's campaign accused President Biden's Democratic allies of escalating "Witch-Hunts" and abusing power to interfere in the election.

Judge Merchan has set Trump's sentencing for 11 July, with the potential for penalties ranging from probation to four years in prison.

At the Las Vegas rally, Trump criticised Biden's immigration policies, called a recent asylum halt "bulls***," and labelled Biden as "incompetent," not just "old."

He repeated his calls to "stop the steal" and attacked the media.

Trump promised to secure the border, boost energy production, and lower prices if elected.

He also claimed that Russia's invasion of Ukraine and Hamas's attack would not have occurred under his presidency.

Trump boasted of his campaign's fundraising success and rising poll numbers post-trial, deriding Biden as "corrupt" and "low IQ."

He said:

“Too big to rig, that's what we want, too big to rig.”

He concluded by warning of the world's proximity to "World War III," envisioning a conflict fought with nuclear weapons of unprecedented power, seemingly overlooking the atomic bombings of Japan in 1945.

He thanked attendees, notably Congresswoman Marjorie Taylor Greene, for their support.

Is Anti-Crypto Biden Softening to Crypto in a Desperate Attempt to Win More Votes?

Trump's evolving position on cryptocurrency mirrors a broader trend in US politics, as crypto gains significance among voters.

Surveys indicate that over 20% of Americans have invested in crypto and view it as a pivotal issue.

The Biden administration has reportedly initiated crypto outreach efforts, coinciding with Trump's pro-crypto stance.

The SEC has also adjusted its approach to spot Ethereum ETFs, approving them on 23 May after earlier expected denials.

Anthony Scaramucci, founder of SkyBridge Capital, speculates that President Biden may align with the crypto industry, even if it contradicts Gensler's views.

Scaramucci suggests that Biden's stance on Bitcoin and crypto could be influenced by the recent approval of spot Ethereum ETFs, indicating a potential shift towards a more favorable view of cryptocurrencies.

He speculated:

“I think the Biden team, they vetoed this bill (SAB 121) last week but they did get the Ethereum stuff passed despite Elizabeth Warren and Gary Gensler not wanting it. I think they're going to pivot…I think they're going to pivot now on Bitcoin and crypto assets. I don't think Biden, who is a moderate, I don't think he wants to be left out in the dark on this. This is a razor-thin election, and I don't think Joe Biden wants to lose this election because of the capricious whims of Elizabeth Warren or Gary Gensler.”

Anthony Scaramucci is for Biden because he dislikes trump.

Bizarre stance especially given he went on to describe how Biden and Warren have undermined the constitution in relation to $BTC.

That is literally your only role as a voter - uphold the constitution. Tf is wrong with… pic.twitter.com/mmuNNUypAi

— Steve Nakamoto 🔺🐔 (@stevesnakamoto) June 9, 2024

Biden's 2022 executive order focused on fostering the responsible development of digital assets, prompting regulators like the SEC and CFTC to provide guidance and rules to mitigate crypto risks.

The White House has expressed willingness to collaborate with Congress on a regulatory framework for cryptocurrencies.

Spokesperson Robyn Patterson emphasized the administration's support for digital asset innovation while prioritising consumer protection from the risks associated with emerging technologies.

Gary Gensler Takes a Swing at Crypto Exchanges

On CNBC last week, SEC Chair Gensler cautioned cryptocurrency exchanges that mere disclosures to investors do not insulate them from regulatory action.

He underscored that disclosures are insufficient if exchanges are involved in market manipulation or spread misleading information that impacts investment choices.

Gensler also noted that many crypto firms fail to provide any disclosures, operating in ways that would be deemed unacceptable in traditional financial markets.

He said:

“These crypto exchanges, Jim, are doing things we would never allow this New York Stock Exchange to do. Our laws don’t allow you to trade against your customers.”

#SEC Chair Gary Gensler criticized #crypto exchanges, stating they engage in activities not permitted for traditional exchanges like the NYSE. Saying Crypto exchanges are actively trading against their customers. This sparked a range of reactions on social media, with some users… pic.twitter.com/lRIXryFUmO

— Crypto Piggie (@DatCryptoPiggie) June 5, 2024

The SEC is currently engaged in legal battles with major players in the US cryptocurrency market, including Coinbase, the largest exchange by daily trading volume in the US.

Gensler has adopted a more nuanced stance when discussing the possibility of crypto ETFs, particularly those related to meme coins like BONK on the Solana network.

This moderated approach is consistent with the SEC's recent approval of spot Ethereum ETFs, a move that surprised many given the previous classification of Ethereum as an unregistered security.

Gensler has suggested that such products should be registered as securities, although it remains unclear whether he fully understands the nature of meme coins associated with public figures that are not issued by the individuals themselves.

Trump's Penchant for Empty Promises

CNN's Abby Phillip has drawn attention to former President Trump's tendency to promise the unveiling of ambitious plans within two weeks, only to never materialise them.

In April, the presumptive GOP presidential nominee pledged to reveal his plans for access to abortion medication, stating it would come within the next week or two.

This pattern of promising plans in two weeks is a recurring theme for Trump, as evidenced by a montage aired on "Newsnight" showing Trump during his presidency hinting at imminent proposals on various issues such as health care, taxes, infrastructure, and the coronavirus pandemic.

She added:

“Well, surprise! It is June, and there is still no plan, and, according to sources, those plans don't exist. It's been 10 years...and we're still waiting on a health care plan, by the way.”

A decade of waiting for a healthcare plan feels like an eternity. Abby Phillip's exposé on Trump's empty promises hits hard. #HealthcareDeception #EmptyPromises pic.twitter.com/aaMzUmdOL6

— Adam Johnson (@AdamAdamjhonson) June 7, 2024

Recently, Trump has appeared to shift his stance on cryptocurrency, adopting a more accommodating approach and promising a favourable future for the industry in the US.

The question arises whether Trump's newfound interest in crypto is genuine or merely a strategic move to garner votes as the election approaches.

Following the Biden administration's threat to veto the H.J.Res. 109 SEC crypto bill, which would enable US-regulated financial institutions to custody cryptocurrencies, Trump has capitalised on the crypto community's dissatisfaction with Biden, claiming that crypto is leaving the US due to hostility.

Trump has suggested that to prevent the exodus of the crypto industry, the US must be more welcoming.

However, scepticism remains about Trump's true understanding and commitment to cryptocurrency.

Mónica Taher, a former director for the government of El Salvador, has criticised the opportunistic use of crypto by some politicians to enhance their image as innovators, pointing to Trump's initial opposition to cryptocurrencies and his recent acceptance of donations in crypto due to financial troubles.

Andrew M. Bailey, a fellow at the Bitcoin Policy Institute, believes Trump's pro-crypto stance is a reaction to Senator Elizabeth Warren and the Biden administration's approach, fitting a pattern of positive rhetoric without substantial follow-through.

Taher emphasizes the importance of financial inclusion over political posturing and advises trusting only those politicians who genuinely educate their constituents about the new monetary system.

Venture capitalist Tim Draper has also criticised regulators' lack of knowledge, highlighting that many trying to regulate crypto do not even own a crypto wallet.

With the November elections still over five months away, there is ample time for candidates' positions to evolve or for Trump's legal issues to develop further.

Given Trump's history of prioritising talk over action, there is a risk that his sudden enthusiasm for crypto could lead to unfulfilled promises aimed solely at rallying crypto voters.

To create a decisive voting bloc of crypto holders, Trump will need to demonstrate his advocacy through concrete plans for the industry.

Otherwise, his promises may be viewed as just another empty political gesture.

In a report released on Wednesday, JPMorgan indicated that U.S.-listed Bitcoin mining enterprises possess substantial electricity resources, making them potential acquisition targets for hyperscale data centers and AI companies.

According to Coindesk, the JPMorgan report stated:

"Hyperscale data centers and AI companies are exploring various alternatives to meet their electricity needs, which might make Bitcoin mining enterprises with attractive electricity contracts potential acquisition targets."

The bank estimates that U.S.-listed Bitcoin mining enterprises consume up to 5 GW (gigawatts, 1 billion watts) of electricity, with an additional 2.5 GW available, making them appealing potential acquisition targets.

Additionally, following the fourth Bitcoin halving completed in April, the block reward has further decreased from 6.25 BTC to 3.125 BTC, leading some Bitcoin mining enterprises facing financial pressure to be more inclined to accept acquisition offers.

Mergers and Acquisitions Surge Post-Halving The report also noted that merger and acquisition activity in the mining sector is heating up post-halving. This week, U.S.-listed Bitcoin mining and hosting service provider Core Scientific announced a 12-year partnership agreement with cloud computing solutions provider CoreWeave. Core Scientific plans to provide 200 MW (megawatts) of infrastructure, with the agreement expected to generate over $3.5 billion in cumulative revenue for the mining company. Bloomberg revealed that insiders claim CoreWeave has made an all-cash offer of approximately $1 billion, equivalent to $5.75 per share, to acquire Core Scientific.

Another major U.S.-listed Bitcoin mining enterprise, Riot Platforms (RIOT), proposed an acquisition offer to fellow miner Bitfarms (BITF) last month, but it was rejected. Bitfarms claimed it was severely undervalued and had received more acquisition interest from other parties.

JPMorgan stated in the report that the deal between Core Scientific and CoreWeave could accelerate the cryptocurrency mining sector's move into high-performance computing (HPC) businesses, while noting:

With the emergence of a new class of buyers (hyperscale data centers), this transaction might raise the "valuation floor for small-scale miners."

Transferring electricity capacity from miners can help "rationalize the Bitcoin network" and enhance the profits of the remaining miners.

The cryptocurrency market has once again been stirred by the remarkable ascent of the MOTHER token, created in association with rap artist Iggy Azalea, which reached a new peak on Thursday.

This digital asset, part of the burgeoning meme coin category on the Solana blockchain, has been a subject of intense interest and scrutiny due to its rapid rise and the inherent risks associated with celebrity-endorsed cryptocurrencies.

Within a week of its launch, the MOTHER token achieved a market capitalisation exceeding $200 million, a feat that has enriched some savvy investors who witnessed a staggering 90% surge in value within 24 hours.

pic.twitter.com/hPPp2WOZz3

— IGGY AZALEA (@IGGYAZALEA) June 6, 2024

This catapulted MOTHER into the upper ranks of Solana's meme coin ecosystem.

Leveraging her substantial social media following, Azalea has been actively promoting the token on her platform, engaging with her close to eight million followers.

At the time of writing, however, the market cap has slightly receded to $197 million.

MOTHER Rising Despite Other Celeb Tokens Tanking

The creation of meme coins has become increasingly accessible, with Pump.Fun, a notable entity in this space, facilitating the launch of hundreds of thousands of tokens on the Solana network.

MOTHER, the second-largest asset by market cap to emerge from Pump.Fun, has delivered extraordinary returns for early investors.

For instance, a wallet that held $3,200 worth of the token on 28 May saw its value soar to nearly $9 million by Thursday morning.

Iggy Azalea's MOTHER Meme Coin went from $3K to $9M for a trader! 🚀 Who knew music and memes could make such money moves? 🎶💰 #CryptoQueen #MotherOfAllGains https://t.co/AioT53mIO1

— TomorrowNook (@TomorrowNook) June 6, 2024

While the exact involvement of Azalea in the creation of the MOTHER token remains unclear, her enthusiastic promotion of it from the outset is undeniable.

In a recent post, she shared insights into her motivations for supporting the token, further fuelling its visibility and market momentum.

To be transparent,
It’s the motivation in the way people enjoy gambling to have fun winning/taking an L at times with enough you don’t mind losing.
Also at least for me…
I like sitting at that blackjack table n talking to ppl a lil.
It’s the thrill of it I guess. https://t.co/lGRsCmvNTN

— IGGY AZALEA (@IGGYAZALEA) May 29, 2024

Despite its impressive trajectory, MOTHER still has significant ground to cover to match the success of established meme coins.

According to Blockgraze, a crypto trader known for turning a modest investment into a substantial fortune through early bets on Dogwifhat (WIF), celebrity-backed tokens like MOTHER face unique challenges.

Blockgraze said:

"In addition to all the ways a regular meme coin can fail you have all the added mistakes and risks from tying yourself to her personally. She can get bored, tweet the wrong thing, face personal legal action/whatever else."

insane that some of you are just gonna sit back and let $Mother steal WIF’s spot as the original crypto meme coin

time to go on offense

— blockgraze (@blockgraze) June 1, 2024

However, Azalea's role as a prominent advocate for the token has been instrumental in sustaining its price and generating ongoing interest.

Blockgraze added:

"The Iggy coin itself is only really interesting because she seems to be trying to stick with it and so far the price reflects people appreciating that."

Her frequent posts, featuring provocative memes that challenge naysayers, continue to drive attention and excitement around MOTHER.

https://t.co/KNVz7Aaxdw

— IGGY AZALEA (@IGGYAZALEA) May 30, 2024

The recent surge of celebrity-backed crypto tokens has taken a steep decline, with most experiencing significant price drops since their launch last week.

These overhyped meme coins, driven by speculative interest, raise questions about the true impact of celebrity endorsements in the crypto space.

The majority of these tokens have seen significant losses, with JENNER, DAVIDO, and RICH dropping at least 66% from their peaks.

JENNER, for instance, reached a $30 million market cap within the first 24 hours, amidst debates over its authenticity.

Despite Caitlyn Jenner confirming its legitimacy, the token has plummeted 79% from its all-time high of $0.0061, now holding a $7.1 million market cap with minimal price fluctuations.

Similarly, the RICH token from rapper Rich the Kid attracted attention upon its launch but has since declined to a $678,000 market cap.

The Timeless Davido (DAVIDO) token, launched by Nigerian singer David Adedeji Adeleke, peaked at $0.0033 on 30 May but has fallen over 66% to $0.0011.

Other tokens, linked to celebrities like boxing legend Floyd Mayweather and rappers Moneybagg Yo (SPEAK) and Trippie Red (BANDO), have dropped around 90%.

If you invested in one of the celebrity shitcoins last week, then unsurprisingly you're down bad.

The only exception is $MOTHER by Iggy Azalea.

$1,000 USD invested on day 1 is today:$JENNER (Caitlyn Jenner): $175 USD.$RICH (Rich The Kid): $473 USD.$DAVIDO (Davido): $165…

— wale.moca 🐳 (@waleswoosh) June 5, 2024

In stark contrast, Iggy Azalea's MOTHER token, launched on 29 May, remains the only celebrity-endorsed cryptocurrency that has not succumbed to the widespread downturn affecting similar assets.

Vitalik Buterin Not Amused with Recent Celeb Meme Coins Surge

The emergence of celebrity-endorsed memecoins has sparked a debate within the cryptocurrency community, with Ethereum co-founder Vitalik Buterin expressing dissatisfaction with the trend.

In a recent post on 5 June, Buterin articulated his belief that the essence of a successful project lies in the satisfaction and happiness of its participants, even if the tokens themselves eventually lose all value.

A quick summary of features that a celebrity crypto project needs to have for me to be more willing to respect it:

1. Have some kind of public-good goal that it's serving, other than enriching the celebrity and early adopters. Realistically, either an art project or the…

— vitalik.eth (@VitalikButerin) June 5, 2024

He emphasized that the true measure of a project's worth is its contribution to society, such as advancing healthcare, supporting open-source software, or fostering artistic creativity.

Buterin's critique extends to the current cycle of celebrity-driven meme coins, echoing concerns he previously outlined in a March opinion piece regarding the so-called "degen cycle."

He said:

“Regular businesses and charities accomplish this goal all the time. It's a low bar, but things we build should meet this bar as well.”

He posits that the ultimate objective of a meme coin project should be to create an experience that participants would be proud to have been a part of, regardless of the token's financial performance.

This perspective was underscored in response to discussions about the MOTHER token, which could potentially set a precedent for sustainable value creation in the realm of celebrity experimentation.

Buterin differentiates between celebrity tokens, which are cryptocurrencies created and promoted by famous individuals, and projects that he deems more respectable, such as Ashton Kutcher and Mila Kunis' Stoner Cats initiative.

He outlines specific criteria for what he considers a commendable celebrity crypto project, including a clear public benefit goal that extends beyond mere profit for the celebrity and early investors.

Longevity is another key factor for Buterin, who favours projects with the potential to endure for over a decade, rather than those that enjoy fleeting popularity before fading into obscurity.

Furthermore, Buterin advocates for celebrity tokens that offer more than just speculative trading.

While he has reservations about token-voting decentralised autonomous organisations (DAOs), he acknowledges their potential to foster a sense of community and engagement among participants.

He suggests that while a DAO should not dictate the project's direction, it should play a meaningful role in shaping its future.

Essentially, Buterin's critique calls for a re-evaluation of the values and objectives driving the development of celebrity-endorsed cryptocurrencies, urging creators and investors alike to prioritise long-term sustainability and societal impact over short-lived hype.

Iggy Azalea Fought Back with Sarcastic Humour

In the ensuing hours, Azalea took to social media with a subtweet, sharing a humorous photoshopped image that depicted her breastfeeding a baby Vitalik Buterin, accompanied by the caption, "He was just hangry"—a playful nod to the slang term for being irritable due to hunger.

He was just hangry pic.twitter.com/AlTwEtfIKd

— IGGY AZALEA (@IGGYAZALEA) June 5, 2024

This lighthearted response, however, drew further scrutiny from the more philosophically-minded members of the cryptocurrency community.

Hayden Adams, the architect of the decentralised trading protocol Uniswap and a pioneer in the token-swapping technology that underpins the on-chain trading of meme coins and a myriad of other assets, rebuked Azalea for mocking "the best builder in the entire space" without leveraging her foray into cryptocurrency for a more noble cause.

No issues with memecoins or celebcoins - I think there’s value to memetic attention and it’s cool to create markets for it

That said, the underlying purpose and value of the tech goes way beyond financial games. And the best builders in the space are motivated by positive social… https://t.co/FQhawNl7GP

— hayden.eth 🦄 (@haydenzadams) June 6, 2024

What initially seemed like a jest worth a million dollars has now escalated into a profound debate about the very essence of cryptocurrency.

As the discourse unfolded, Evgeny Gaevoy of Wintermute, a prominent figure in market-making, dismissed the attempts by Adams and Buterin to "solve capitalism," injecting a note of scepticism into the conversation.

Idk guys I’m with Iggy on this one🙃

— wishful cynic (@EvgenyGaevoy) June 6, 2024

What's the Outlook for MOTHER & Other Celeb Tokens?

In the wake of launching her token, Azalea has demonstrated a level of commitment to the cryptocurrency ecosystem that surpasses many of her celebrity counterparts.

iggy a better bullposter than 99% of crypto twitter

— Ansem 🐂🀄️ (@blknoiz06) May 29, 2024

She has been observed engaging in lengthy Twitter Spaces discussions, utilising Telegram, and even incorporating memes into her online presence.

By adopting a Mad Lads NFT as her profile picture, Azalea has tapped into the NFT community for business development and guidance in navigating the crypto space, as suggested by X user Kev4Evaa.

2/12- While essentially all prev celeb projects have been rugs, Iggy is hustling & showing a dedication to be a part of this space. Doing hour after hour of spaces, on TG rn, uses our memes (go look), funny, got listed on gecko & mexc fast, see post below https://t.co/i0ILCo53xg

— Kevin MD | X (@kev4evaa) June 2, 2024

The recent volatility in the value of celebrity-backed tokens underscores the speculative nature of these digital assets.

Despite the initial excitement they generate, their rapid declines serve as a reminder for investors to approach them with caution.

While Azalea's MOTHER token appears to be a success story, the broader market remains unpredictable.

As the cryptocurrency market matures, it is imperative for both celebrities and investors to grasp the intricacies of these projects and the risks they entail.

The longevity of celebrity-backed coins will hinge on their capacity to deliver sustained value beyond the initial hype.

Without the necessity to rely on technical teams, there is little crypto insiders can do to stop celebrities from capitalising on their influence to potentially profit at the expense of their fans—unless regulatory bodies step in.

The participation of celebrities in the crypto world is a testament to the mainstream adoption of digital assets and, in Azalea's case, the crypto culture itself.

However, it also brings to light the potential pitfalls associated with inexperienced individuals entering the crypto arena.

In the case of MOTHER, Buterin's critique may have inadvertently provided the meme coin with a publicity boost.

Yet, the question lingers: After the initial surge, how long will it be before the inevitable downturn?

In June last year, South Korea passed the Virtual Asset User Protection Act to introduce a regulatory mechanism for virtual assets, aiming to enhance investor protection. The law integrates 19 crypto-asset-related regulations, defining digital assets and setting penalties for illegal activities such as using non-public information, market manipulation, and unfair trading. This law is set to take effect on July 19, 2024.

Banks Must Pay Interest on Custodied Cash

Among these 19 regulations, one law could severely impact bank profits. According to South Korean media reports, under the Enforcement Decree and Supervisory Regulation of the Virtual Asset User Protection Act, banks entrusted by virtual asset exchanges must pay interest on user deposits (cash in Korean won) deposited through the exchanges.

Therefore, this law might significantly affect K-Bank, the digital bank entrusted by Upbit, South Korea's largest virtual asset exchange. Reports indicate that K-Bank currently has 5 trillion KRW (3.6 billion USD) in deposits from Upbit, accounting for over 20% of its customer balances. After the new law takes effect in July, if the interest rate is set at 1%, K-Bank will need to pay approximately 50 billion KRW (36 million USD) in interest, which is close to K-Bank's net profit for the first quarter of this year.

Note: The expected 1% interest rate is based on the current deposit interest rate paid by Korean securities companies to investors.

Additionally, K-Bank is preparing for an IPO this year, coinciding with the implementation of the new law, which might affect its valuation. Upbit, being the largest virtual asset exchange in South Korea with a large user base, leads to K-Bank holding a significant amount of virtual asset deposits, while other Korean banks do not have significant positions in virtual asset deposits.

It is reasonable to speculate that banks should be able to conduct some level of financial operations with the cash they are entrusted with under the new law; otherwise, no bank would be willing to cooperate. However, whether this is worthwhile from the bank's perspective remains to be confirmed with further information.

Contents of the Virtual Asset User Protection Act

At the end of last year, the Financial Supervisory Commission (FSC) of South Korea issued legislative notices on the enforcement ordinance of the Virtual Asset User Protection Act and the regulations for supervising the virtual asset industry, specifying details authorized by the law.

The enforcement ordinance and supervisory regulations specify authorized matters, including:

Adding entities not subject to the Virtual Asset User Protection Act, such as deposit tokens linked to CBDCs and NFTs

Clarifying the management institutions and operation methods for user deposits

Requiring 80% of user virtual assets to be stored in cold wallets

Establishing standards for insurance mutual aid or reserve accumulation to address responsibilities for incidents such as hacking or computer failures

Defining the possible timing of non-public important information leaks and insider trading based on the characteristics of the virtual asset market

Principally prohibiting arbitrary freezing of user virtual asset deposits and withdrawals, with exceptions specified

Imposing obligations on virtual asset trading platforms to monitor abnormal transactions and establishing penalty procedures for unfair trading behaviors.