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CEO Throws Cold Water On May Ethereum ETF Approval – Impact On Price

The much-anticipated arrival of spot Ethereum exchange-traded funds (ETFs) in the US seems to be hitting a snag. Industry leaders are voicing growing concerns about the likelihood of securing regulatory approval from the Securities and Exchange Commission (SEC), with a deafening silence from the agency fueling anxieties.

Jan van Eck, CEO of investment firm VanEck, recently cast a shadow of doubt on the possibility of SEC approval for spot Ether ETFs in May. In a CNBC interview, van Eck expressed his belief that their application would likely be rejected, citing a complete lack of communication from the regulatory body.

This sentiment finds an echo in the words of Eric Balchunas, a Senior Bloomberg ETF analyst, who has significantly downgraded his odds of approval to a mere 35%. Balchunas attributes this pessimism to the ongoing “radio silence” between the SEC and fund issuers.

Ethereum ETF Applications Languish In SEC Limbo

The SEC’s lack of response extends beyond van Eck’s application. Seven other proposals for spot Ether ETFs are currently gathering dust, with no indication of progress. This regulatory purgatory is fueling skepticism among industry commentators. CoinShares CEO Jean-Marie Mognetti believes that approval for any of these applications is unlikely “this side of the year,” further amplifying the prevailing uncertainty.

The current roadblock for Ethereum ETFs stands in stark contrast to the success story of Bitcoin ETFs. The SEC’s green light for Bitcoin ETFs offered a glimmer of hope for the cryptocurrency market. Van Eck highlights the growing interest in Bitcoin as a “maturing asset class,” with significant untapped investor demand.

Notably, VanEck’s own spot Bitcoin ETF, known by the ticker HODL, has witnessed significant inflows since its launch in mid-January, signifying a strong investor appetite for crypto exposure.

Lack Of Clarity Creates Murky Investment Landscape

The lack of interaction from the SEC is a major concern for James Seyffart, another analyst in the field. He emphasizes that “zero comments or interactions from the SEC is a bad sign.” This sentiment suggests a troubling trend in the approval process, further dampening hopes for a swift resolution on the Ethereum ETF front.

Despite the current cloud of uncertainty surrounding Ethereum ETFs, the cryptocurrency market continues to experience growth and gain wider acceptance. This indicates that opportunities for investment diversification in the digital realm are on the rise.

However, until the SEC sheds light on its stance, investors and industry stakeholders will be forced to navigate a landscape fraught with uncertainty and intense regulatory scrutiny.

The path forward for Ethereum ETFs remains shrouded in doubt. The SEC’s silence is deafening, and industry leaders are bracing for potential rejection. With a lack of clear communication and mounting skepticism, investors are left facing a blank wall, waiting for a sign from the SEC.

Featured image from Micoope, chart from TradingView

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Uniswap Bloodbath: UNI Price Crashes 16% On SEC Lawsuit Fears

The US Securities and Exchange Commission (SEC) has served a Wells Notice to Uniswap, a leading decentralized exchange (DEX). This pre-enforcement notice, a precursor to potential legal action, triggered a plunge in Uniswap’s native token, UNI.

At the time of writing, UNI was trading at $9.37, down 16.2% in the last 24 hours, data from Coingecko shows. The crypto has also sustained a 15% loss in the last seven days.

Uniswap Whales Seek Safer Shores

The news of the SEC’s looming action acted as a fire alarm for Uniswap’s biggest investors. On-chain data analysts at Lookonchain reported significant market movements, with three large whales shedding a staggering 2.03 million UNI tokens – a cool $20 million vanishing from the Uniswap ecosystem within hours.

The wallets offloaded a combined 1.25 million UNI, potentially profiting by $3.5 million if they sold at current market prices. These tokens, interestingly, originated from a Binance transfer in March 2023, hinting at a potential strategy of holding on the exchange until the regulatory clouds cleared.

Another whale liquidated over 472,000 UNI for a quick $4.6 million USDC payout, netting a cool $1.67 million in profit. The fire sale wasn’t limited to these three giants – six other whale-sized wallets collectively moved 316,400 UNI tokens to Binance, valued at roughly $3.15 million. This mass exodus of heavyweight investors exacerbated the downward spiral of UNI’s price, leaving retail investors scrambling to assess the situation.

Uniswap Founder Vows To Fight, DeFi Future Uncertain

Uniswap founder Hayden Adams reacted swiftly and fiercely to the SEC’s move. In a fiery statement posted on the X platform, Adams condemned the SEC’s approach, accusing them of prioritizing opaque, legacy financial systems over the interests of consumers.

He emphasized the need to defend Uniswap and the broader DeFi industry, underscoring the potential of decentralized finance to revolutionize financial inclusion.

The Wells Notice marks the beginning of what could be a long and arduous legal battle. Adams acknowledged the possibility of a years-long fight, highlighting the immense stakes involved.

The outcome of this clash, he argued, could significantly impact the future trajectory of DeFi and the entire cryptocurrency landscape.

Related Reading: From Hat To Heights: Dogwifhat’s $17 Crypto Leap Electrifies Investors

Crypto Market Braces For Regulatory Storm

Investors are now grappling with the specter of increased regulatory scrutiny for DEXs, a sector that has thrived on its permissionless nature. The uncertainty surrounding Uniswap’s legal status has cast a shadow over investor confidence, raising concerns about the potential devaluation of their holdings.

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Ripple Provided Major XRP Price Discounts To Select Investors, SEC Claims

In the XRP lawsuit, the US Securities and Exchange Commission (SEC) filed its motion for remedies and entry of final judgment against Ripple, proposing a suite of penalties that includes injunctive relief, disgorgement of profits, and a notable $2 billion in civil penalties today. But that’s not the whole story as the 210-page document contains some interesting statements and assertions.

Did Ripple Favor Select Institutional Investors?

One of the assertions made in the SEC document and pointed out by XRP community lawyer Bill Morgan was a key revelation that Ripple engaged in discriminatory pricing practices, offering substantial discounts on XRP tokens to a select group of institutional investors. This practice, the SEC alleges, created an uneven playing field, benefiting certain “favored” investors at the expense of others.

XRP community lawyer Bill Morgan provided a summary of this aspect, highlighting the potential damage to Ripple’s standing in the eyes of institutional investors. “The SEC’s brief is a possible problem for Ripple beyond this case. The SEC is able to argue that there were two groups of institutional sales investors (it calls them favored and unfavored) and Ripple offered one group significant discounts in XRP price over the other group that did not receive them,” Morgan noted via X (formerly Twitter).

He further delved into the SEC’s claim that such practices harmed the “unfavored” group of investors to the tune of $480 million, a figure based on assumptions that Morgan suggests need thorough examination. “The evidence of causation of this alleged harm seems thin,” he added.

The SEC’s filing goes on to argue that Ripple’s sales tactics, specifically the discounted sales to certain investors, directly contributed to downward pressure on the overall market price of XRP. This point is not just a matter of regulatory compliance but also raises the specter of legal action from those institutional investors who may feel aggrieved by not being privy to the same discounts.

Morgan also touched upon the ramifications of these actions being classified as investment contracts by the SEC, saying, “As these sales to institutions were found to be investment contracts, it means that this offering of discounts to some but not other institutions is the very disclosure according to the SEC that should have, and would have been made to the institutions, if the sales to institutions had been registered.”

He further noted that these claims by the SEC are also not great for the reputation of Ripple. “Not sure this revelation is great for Ripple’s reputation with institutional investors,” Morgan remarked.

Ripple CLO Alderoty Responds

Ripple’s Chief Legal Officer, Stuart Alderoty, also issued a broad response to the SEC’s filing via X, vehemently disputing the narrative presented by the regulatory body. Alderoty stated, “Our response will be filed next month, but as we all have seen time and again, this is a regulator that trades in statements that are false, mischaracterized and designed to mislead.”

He further attacked the SEC for its illegitimate reasoning, stating: “They stayed true to form here. Rather than faithfully apply the law, the SEC remains bent on wanting to punish and intimidate Ripple – and the industry at large. We trust the Court will approach the remedies phase fairly.”

At press time, XRP traded at $0.64365.

XRP price

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Ripple CEO Responds To SEC’s Shocking $2 Billion Demand

In a rather shocking development, the United States Securities and Exchange Commission (SEC) has demanded a $2 billion sanction against Ripple. Responding to the startling demands, Ripple’s Chief Executive Officer (CEO), Brad Garlinghouse has taken a firm stance against the agency’s demands, determined to expose the true nature of the SEC.

Ripple CEO Criticizes SEC’s Demands

Stuart Alderoty, the Chief Legal Officer (CLO) of Ripple recently disclosed in a post on X (formerly Twitter) that the US SEC has petitioned a Judge for $2 billion in fines and penalties against Ripple. According to the Ripple CLO, the SEC is in a relentless pursuit to “punish and intimidate Ripple,” rather than faithfully applying the law. 

Challenging the SEC’s $2 billion penalty, Garlinghouse emphasized that the agency has consistently operated beyond the bounds of law in various enforcement actions. He disclosed that Judges have also taken note of the SEC’s actions, previously admonishing the agency for its extensive abuse of power entrusted to it by Congress. 

The Ripple CEO also criticized the SEC’s penalty demand, arguing that it lacks precedent and justification, particularly given the absence of any allegations, findings of fraud or recklessness in the case. As a result, Garlinghouse has vowed to expose the SEC for its conduct, emphasizing that Ripple will vigorously respond to the SEC’s action. 

Notably, Alderoty has disclosed that the company’s legal team will be addressing the SEC’s demands in a filing scheduled for next month. Offering his perspective on the SEC, the Ripple CLO characterized the agency as one “that trades in statements that are false, mischaracterized and designed to mislead.”

SEC Actions Hurt XRP Holders The Most

In its lawsuit against Ripple, the US SEC accused the payment company of violating securities laws by selling XRP in unregistered securities offering to investors in the US. According to the agency, the company and its executives had allegedly failed to protect its investors, depriving them of adequate disclosures of XRP. 

However, members of the Ripple community argue that the SEC’s enforcement actions against Ripple have not protected investors but caused even deeper challenges and financial losses for XRP holders. 

A popular XRP enthusiast, identified as XRPCryptoWolf has asserted that it should be the SEC, not Ripple, paying billions to XRP holders. 

“The SEC asking for $2 billion in fines and penalties is ridiculous when they’re the ones who financially hurt XRP holders the most. The SEC owes XRP holders tens of billions of dollars,” he stated. 

The XRP community member disclosed that after the SEC announced its lawsuit against Ripple, approximately $15 billion was wiped out from XRP’s market capitalization, and the token was also delisted from major exchanges. As a result of the lawsuit’s significant impact on XRP’s value, millions of XRP holders experienced financial losses.

XRP price chart from Tradingview.com (Ripple SEC)

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Analyst Warns Of Bitcoin Pre-Halving Retrace Echoing Troubling 2020 Trend

Rekt Capital, a cryptocurrency expert and enthusiast, has identified a similar pattern between the recent Bitcoin pre-halving retrace and the one that took place in 2020 before the crypto asset witnessed an upsurge to its previous all-time high.

Bitcoin Pullback Is Almost Identical With 2020 Pre-Halving Retrace

Bitcoin, the largest cryptocurrency asset, is presently demonstrating momentum, rising over $70,000 and recovering from a recent downward trend. Following the recovery, Rekt Capital believes that the pullback might be over, citing a similarity to the 2020 pre-halving retrace.

Given the uncertainty of the crypto market, the analyst is not sure if the recent upsurge marks the end of the pre-halving retrace. However, if that is the case, then Bitcoin would have nearly matched the pre-halving correction from 2020.

Bitcoin

According to the analyst, the digital asset has recorded a pullback of over 18% in this cycle. Meanwhile, in the 2020 cycle, it retraced by over 19%, suggesting the potential of the asset mirroring the 2020 movement this cycle.

A further dive into the correction made by the analyst reveals that Bitcoin has been trapped inside the Weekly range (black-black) ever since it retraced by over 18%. Both the upside-wicking 2021 peak and the candle-bodied 2021 peak combine to create the weekly range that Rekt Capital has indicated.

Thus, he claims that BTC reclaiming the $69,200 ‘range high’ as support, which has already played out, could signal the conclusion of the recent decline. In addition, this demonstrates that Bitcoin is poised to move over its weekly range and soar higher.

With the 2024 Bitcoin halving drawing closer, the cryptocurrency is having difficulty in reclaiming its most recent peak of $73,000. However, there are rumors that today’s increase could mean the pre-halving decline is coming to an end.

Considered Catalysts For BTC’s Strength This Cycle

As of the time of writing, BTC has rebounded to around $70,806, indicating a daily increase of over 5%. Its market cap and trading volume are also showing strength, rising by 5.49% and 47.82%, respectively, in the past day.

One of the main drivers of Bitcoin’s growth this cycle is thought to have been the approval of spot BTC ETFs in January 2024. With the acceptance of the product, investors now have a convenient way to profit from Bitcoin’s value without actually owning any of it. 

Since then, the crypto asset has witnessed increased adoption from industry leaders and a massive inflow of capital, propelling its price as well. The BTC price has increased from $46,000 to a peak of $73,000 since the ETFs were approved by the US Securities and Exchange Commission (SEC).

Another catalyst considered to have impacted the coin’s price is the anticipation surrounding the upcoming Bitcoin Halving set to occur in April. In the past, these kinds of events have led to notable price upticks. Due to this, investors will shift their attention to BTC to position themselves for significant gains following the halving event.

Bitcoin

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Ethereum’s Rocky Road To $4,000: Will SEC Hurdles Derail Its Bullish Journey?

Ethereum (ETH) stands at a crucial juncture, with its eyes set on the $4,000 price mark. Amid this ambitious pursuit, the digital asset faces a significant challenge that could influence its trajectory: scrutiny from the US Securities and Exchange Commission (SEC).

Despite this potential regulatory hurdle, some analysts remain optimistic about Ethereum’s prospects. A detailed analysis by Captain Faibik, a market watcher, highlighted a bullish pattern in ETH’s four-hour candlestick chart, suggesting that the $4,000 threshold is within reach.

Ethereum Eyes $4,000 Milestone

This optimism stems from a descending wedge pattern observed by Faibik, indicating an end to Ethereum’s consolidation phase and signaling a possible price breakout. The technical analysis paints a promising picture for Ethereum, suggesting that the asset could reclaim its lost valuation.

However, the recent market conditions have posed challenges for Ethereum, with the asset experiencing a more than 15% drop over two weeks, further exacerbated by the broader Bitcoin market correction.

This decline saw ETH trading below the $3,500 mark, with a significant dip to $3,070 on March 20, amid reports of the SEC’s increasing interest in classifying Ethereum as a security.

Particularly, reports indicate that the commission has been seeking financial records from US companies engaged with the Ethereum Foundation, intensifying the debate over Ethereum’s classification. Such regulatory scrutiny casts a shadow over Ethereum’s path to $4,000, introducing uncertainty into its future.

ETF analyst James Seyffart suggests that the SEC’s stance could lead to the denial of spot Ethereum ETF applications by May 23, 2024. He cites a lack of engagement on Ethereum specifics, contrasting with the approach taken for Bitcoin ETFs.

Ethereum’s Network Activity: A Silver Lining

Despite these challenges, Ethereum’s network has witnessed notable growth, with increases in daily active users and transaction volumes signaling a bullish outlook for the cryptocurrency. An upsurge in network activity typically indicates heightened demand, a positive sign for Ethereum’s price potential.

From January 3, the number of daily active Ethereum addresses surged by over 46%, coinciding with a significant price rally. This increased activity and price appreciation period highlights Ethereum’s resilience and potential for growth, even in the face of regulatory uncertainties.

As Ethereum navigates through these regulatory and market challenges, the coming weeks will be critical in determining its ability to breach the $4,000 mark. The juxtaposition of technical bullish signals against the backdrop of SEC scrutiny presents a complex scenario for ETH.

However, the strength of its network and the increasing user engagement offer a glimmer of hope for Ethereum enthusiasts and investors.

Ethereum (ETH) price chart on TradingView

Featured image from Unsplash, Chart from TradingView