Crypto news: We bring you a roundup of what’s been happening in crypto this week. The US Securities and Exchange Commission (SEC) sued PulseChain founder Richard Heart in a lawsuit the industry had long expected was coming.
Meanwhile, the world of decentralized finance (DeFi) was “all shook up” by exploits stealing over $50 million from exchanges. At the same time, Ripple’s XRP Ledger achieved a strong uptake after a favorable legal ruling in July.
Other stories making headlines include the downgrading of US credit to AA+ by ratings agency Fitch and rumors of new US fraud charges against Binance.
Curve Finance Exploit Starts Gloomy Week for DeFi
The $50 million-plus exploit of DeFi pillar Curve Finance on Sunday shook the confidence of investors who regarded the exchange as one of the most secure in the industry.
The exploiter milked a bug in the compiler for the Vyper programming language to steal what’s believed to be up to $70 million from various Curve liquidity pools. Crypto risk firm Gauntlet estimated the hacker stole the funds in CRV and another ETH-based token.
While not “big” by DeFi standards, the hack nevertheless sapped the confidence of users depending on the protocol for lending and other activities. It also capped off a grim month for DeFi exploits, which ended Q1 75% lower than a year ago.
Ripple Ruling Boosts XRP Ledger Business
Judge Analisa Torres’ Ripple ruling is making waves across the world, as newfound confidence in the company’s ledger technology is seeing several institutions advance digital currency efforts.
Entities, including Hong Kong’s Fubon Bank, Palau’s Ministry of Finance, and Seoul’s Catalyze Research, leverage the XRP ledger to streamline financial functions, including loan issuance, stablecoin transfers, and also to boost appetite for XRP trading.
Last month, Torres ruled that XRP sales to investors through exchanges did not fulfill all the criteria of an investment contract in US securities law. Despite recent disagreements on the ruling, the crypto industry hopes its legitimizing crypto will catalyze adoption.
SEC Sues PulseChain Founder Richard Heart for Securities Fraud
Monday’s SEC lawsuit against HEX founder Richard Heart awakened DeFi users to the sobering truth about crypto securities, despite the recent XRP ruling.
The SEC sued Richard Heart for allegedly earning $1 billion through staking products the SEC argues satisfies all prongs of the Howey Test and is therefore subject to regulation. Heart has yet to respond publicly to the charges, including securities fraud for abusing investor funds.
Last month, the SEC reopened comments on a proposal to amend the definition of exchanges under US securities rules. It affirmed it would crack down on certain DeFi protocols while the new definition is finalized.
Crypto – Socially Speaking
Fitch US Credit Downgrade: Earth-Shattering or a Fat Nothingburger?
On Wednesday, TradFi and crypto players were scratching their heads to understand the implications of Fitch’s US credit downgrade. The rating agency trimmed its US credit rating from AAA to AA+ amid what it sees as an erosion of governance amid soaring US debt. The country’s national debt burden stands at around $33 trillion.
But the rating did little to move financial markets, with a 0.5% improvement on an overnight 1% decline in stock futures. Yields on 10-year treasuries fell slightly.
Overall, market commentators agree the downgrade was of little material value since US treasuries have no alternatives. They expect equity markets to benefit from the expected pause in rate hikes in early 2024.
But What About Binance?
Our roundup of this week’s bigger stories would be incomplete without mentioning the world’s largest exchange. On Wednesday, a report published in Semafor said US prosecutors were considering fraud charges against Binance. However, authorities are worried action against the exchange may cause a bank run and harm consumers.
To minimize harm, prosecutors are considering fines and non-prosecution agreements. The exchange also faces lawsuits from the SEC and US Commodity Futures Trading Commission (CTFC).
The report capped off a tough few weeks for the exchange that saw it withdrawal from Germany and the Netherlands. Its share of spot volumes for July fell to 40.4%, its lowest since August 2022.
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This Week in NFT News: Yuga Labs Tops Weekly Sales as Monday Ends Bleak July
NFT sales volumes are up 2% versus the previous week, according to NonFungible.com’s market tracker.
Yuga Labs’ Bored Ape Yacht Club saw 501 sales in the last seven days, recording $8 million in volume. The most expensive token, Bored Ape #2651, sold for 275 ETH, or roughly half a million dollars.
CryptoPunks, another so-called blue-chip collection, came in second, recording just under $3.8 million in weekly trades.
How the Top 10 Performed This Week
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