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- Bitcoin, Ethereum, Cosmos and more Week 20 2024
Bitcoin, Ethereum, Cosmos and more Week 20 2024
Keeping you updated on crypto, web3 and blockchain
TL;DR
CME to Launch Bitcoin Trading for Hedge Funds
Morgan Stanley Invests in Bitcoin ETF: $1.5 Trillion Move
Vitalik Speaks Out on MEV and Decentralization Challenges
SEC Signals Potential Denial of Ether ETFs
Ripple Launches an EVM XRP Ledger Sidechain Using Cosmos
Stargaze and Union Partner for NFT Interoperability
Binance Executive Denied Bail by Nigerian Court
Biden Blocks Chinese Bitcoin Mining Firm from Owning Land Near Wyoming Missile Base
and much more!
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Bitcoin Highlights of the Week
Harnessing the power of cryptocurrency to generate wealth is undeniably impressive, but what truly elevates the game is transforming an entire nation's economy. That's precisely what's happening in El Salvador. In a groundbreaking move, the country embraced Bitcoin as legal tender in 2021, making history as the first nation to do so. Since November 17, 2022, they've embarked on a daily routine of purchasing one Bitcoin without fail, utilizing the renowned saying, "a Bitcoin a day keeps the doctor away." Adding a touch of brilliance to this narrative is their utilization of free, environmentally friendly volcanic energy to bolster their Bitcoin mining efforts.
Nestled amidst 20 active volcanoes, El Salvador boasts an abundance of geothermal power. Leveraging this resource, the country has mined a staggering 474 BTC (equivalent to approximately $32 million) over the past three years alone. As a result, El Salvador's Bitcoin reserves now stand at an impressive 5,752 BTC, valued at around $373 million.
The Chicago Mercantile Exchange (CME), the world's largest futures exchange, plans to offer spot bitcoin trading on its platform, according to a Financial Times report. This move would provide major hedge funds and institutional traders with a regulated venue to trade Bitcoin. Already the global leader in Bitcoin futures trading, CME aims to offer clients an integrated platform that includes both spot and derivatives markets. This integration enables complex trading strategies like arbitrage and basis trading, leveraging price differences between the two markets.
Currently, most spot bitcoin trading occurs on offshore exchanges like Binance. By providing a regulated alternative, CME targets institutional investors who require strict due diligence and compliance standards. The exchange has reportedly held talks with traders who have expressed strong interest in trading bitcoin in a regulated environment. This development comes as Wall Street ramps up its Bitcoin offerings amid surging demand.
The Senate has just passed legislation H.J.Res. 109 to overturn the SEC's Staff Accounting Bulletin (SAB) No. 121, which prevents highly regulated financial firms from custodying Bitcoin and other cryptocurrencies. The measure passed with bipartisan support in a 60-38 vote. Having already passed the House last week, the resolution aims to dismantle SAB 121. This bulletin imposes stringent restrictions on financial institutions, effectively barring them from acting as custodians for digital assets like Bitcoin.
H.J.Res. 109, under the Congressional Review Act, seeks to remove these barriers, enabling regulated financial firms to offer custody services for cryptocurrencies. However, the White House has stated that President Biden will veto the bill if it reaches his desk. The administration argues that overturning SAB 121 would "disrupt the SEC's work to protect investors in crypto-asset markets and safeguard the broader financial system." Proponents of H.J.Res. 109 argue that overturning SAB 121 is crucial for protecting U.S. consumers, especially in light of the recent approval of several spot Bitcoin ETFs by the SEC.
In the first quarter, according to 13F filings with the U.S. Securities and Exchange Commission (SEC), 414 institutions have disclosed holdings in Blackrock’s spot bitcoin exchange-traded fund (ETF), the Ishares Bitcoin Trust (IBIT). Institutional investment managers overseeing over $100 million in assets are required by the SEC to file Form 13F to disclose their securities holdings.
Bloomberg senior ETF analyst Eric Balchunas described this achievement as “mind-boggling,” noting that it “blows away record.” He emphasized that having even 20 holders for a newly launched ETF is “highly rare.” Other ETFs launched in January have not achieved nearly as many institutional holders as Blackrock’s IBIT, including other spot bitcoin ETFs like the Bitwise Bitcoin ETF (BITB), the Fidelity Wise Origin Bitcoin Fund (FBTC), and the ARK 21shares Bitcoin ETF (ARKB).
Recent 13F SEC filings have uncovered significant allocations to Bitcoin among major US financial institutions through spot ETFs, revealing holdings of institutional investors with over $100 million allocated. Following the SEC's approval of several spot Bitcoin ETFs earlier this year, investors have eagerly awaited these disclosures. Filings now reveal institutions such as the State of Wisconsin Investment Board, Wells Fargo, JPMorgan, and others.
The latest disclosure unveils that financial services giant Morgan Stanley has acquired $269.9 million worth of Grayscale's GBTC, positioning itself as one of the largest institutional holders of GBTC alongside Susquehanna's $1.8 billion position. With assets under management exceeding $1.5 trillion, this move signals Morgan Stanley's growing confidence in Bitcoin's role within portfolios. While some firms like Vanguard have expressed opposition to Bitcoin, the broader trend leans towards embracing Bitcoin exposure.
Ethereum Highlights of the Week
In a series of tweets on May 16th, Szilágyi criticized the Ethereum community for prioritizing vested interests and short-term solutions at the expense of the protocol's integrity. He expressed concerns about the acceptance of MEV, liquid staking, and rising hardware demands, warning that these trends could lead to centralization and liken Ethereum to traditional financial systems.
Responding to these concerns in a post on May 17th, Buterin acknowledged their validity but countered that the situation wasn't as dire as depicted in Szilágyi's tweets. He highlighted ongoing efforts to address these issues through protocol enhancements and adjustments to the roadmap. Measures include:
Promoting MEV-free applications like CoW Swap
Implementing encrypted mempools to thwart front-running attacks
Employing techniques like MEV quarantining using proposer/builder separation (PBS) and inclusion lists
Additionally, Buterin pointed to initiatives such as Verkle trees and EIP-4444 aimed at reducing hardware requirements, expanding validator sets, and enhancing node operation efficiency and storage demands.
Just like last week's EIP-7702, this latest proposal, EIP-7706, also bears the mark of Vitalik's ingenuity. Here's what you need to know about EIP-7706:
Introduction of a novel gas fee structure
Enhanced precision in assigning transaction costs
Reduced fees for data-intensive transactions
Think of it as a sophisticated gas meter, allowing you to precisely allocate resources for each segment of your transaction. These advancements not only enhance Ethereum's scalability but also prepare it for an influx of new users, bolstering the bullish outlook for Ethereum.
Analysts have uncovered details from a March filing with the United States Securities and Exchange Commission suggesting that the regulator may contemplate categorizing Ether (ETH) tickers, currently priced at $3,123, as securities. In a May 13 post on X, Davis Polk and Wardwell Associate Scott Johnsson reviewed a March 4 filing from BlackRock regarding its application to list and trade a spot Ether exchange-traded fund (ETF) on the Nasdaq.
The filing extended the commission's deadline to decide on a spot Ether ETF from BlackRock until June and also invited public feedback on whether the investment vehicle could be classified as a commodity.
"The evident intention is to potentially reject on the grounds that these spot filings are improperly categorized as commodity-based trust shares and do not qualify if they are holding a security," commented Johnsson.
A small cohort of community members has united to develop NotWifGary (NWG), a decentralized meme coin. NWG takes a stance against the Securities and Exchange Commission while supporting Ethereum. This initiative arises amidst increased regulatory scrutiny in the crypto industry. Although some NWG members have backgrounds in the zkEVM ecosystem Linea, Marco Monaco clarified that this project is a personal endeavor for the entire team, with no affiliation to Linea or Consensys.
Monaco described NWG as a form of peaceful activism, focused on fun. With the SEC's legal battles consuming much of companies' resources, NWG aims to amplify community voices, using meme culture to foster engagement. Monaco, along with 11 collaborators, attributed the project's inception to Ethereum's regulatory uncertainty. If successful, NWG plans to establish a treasury and a DAO. The hope is that companies facing regulatory lawsuits and financial challenges can propose funding from the NWG treasury. However, the immediate goal is to launch the meme coin.
Alexey Pertsev, the developer behind Tornado Cash, has lodged an appeal against his money laundering conviction in the Netherlands. A spokesperson for the s-Hertogenbosch Court of Appeal confirmed the appeal filing but did not provide details on its approval. Any potential hearing could be months away. Tornado Cash is a decentralized protocol on the Ethereum blockchain, aiming to enhance transaction privacy and enable anonymous transfers.
Pertsev, who received a 64-month prison sentence for facilitating $1.2 billion in money laundering through Tornado Cash, was immediately taken into custody following the verdict. However, he may request to await an appeal trial at home. Although platforms like Tornado Cash facilitate private financial transactions, they have been misused for money laundering. One judge emphasized the criminal aspect of Tornado Cash, a perspective influencing Pertsev's conviction.
Cosmos Highlights of the Week
Ripple and Evmos have joined forces to create an Ethereum Virtual Machine (EVM) XRP Ledger (XRPL) sidechain, utilizing Evmos' evmOS technology. This sidechain will leverage evmOS, an adaptable modular solution employing Cosmos and CometBFT, ensuring EVM compatibility for web3 enterprises.
The Cosmos announcement underscores that integrating the XRP Ledger into cross-chain functionality will unite a diverse array of users, decentralized applications (dApps), and liquidity across more than 90 interconnected networks. Illustrating this interoperability, XRPL users will have the capability to swap assets with platforms like Osmosis seamlessly within a single transaction, bypassing the need to switch wallets or connect to disparate chains, even if Osmosis lacks EVM compatibility.
In a groundbreaking move, Stargaze, a prominent blockchain platform, has announced its partnership with Union, a leading player in the crypto space. This collaboration aims to usher in a new era of interoperability by introducing blue-chip Ethereum and Polygon NFTs to the Stargaze ecosystem through the innovative zk-IBC bridge.
The partnership, announced via Stargaze's official Twitter handle, marks a significant milestone for both platforms. With the integration of the zk-IBC bridge, users can seamlessly transfer major Ethereum and NFT collections such as CryptoPunks, Pudgy Penguins, and y00ts between Stargaze and other platforms, creating a more vibrant and dynamic marketplace for digital assets.
According to Stargaze, the collaboration is not just about transferring assets; it's about connecting communities and simplifying the blockchain experience. By bridging Ethereum and Polygon ecosystems, Stargaze aims to establish itself as a central hub for top-tier NFTs, regardless of their origin.
Range has launched the IBC Explorer, a tool designed to help users track cross-chain transactions and assets in real-time. This new explorer supports several networks, including Osmosis, Noble, Dymension, Neutron, Celestia, Cosmos Hub, and Stride.
The IBC Explorer is a public dashboard that enhances the user and developer experience for IBC transactions in the Cosmos ecosystem. It aims to boost security and usability, promoting broader adoption of the IBC Protocol, the leading interoperability protocol in the blockchain industry.
Range also announced plans for future enhancements, including more features, integration with Range Trail forensics, and support for additional chains.
Developers can now use the Rollchains Spawn platform to launch Interchain Security (ICS) consumer chains, joining the expanding Atom Economic Zone (AEZ). CosmosHub, with its 180 validators and over $2.5 billion in staked tokens, provides the ideal security for these new chains.
Spawn streamlines the development process, allowing devs to:
Choose any Cosmos-SDK module to fit their needs
Automatically test with Interchaintest, CI tests, and unit tests
Integrate with GitHub for automated setup and CI configurations
Accessing blockchain data across multiple chains is challenging. Real-time data requires low latency, while historical data needs separate archive nodes. Developers, node operators, and data analysts need both for efficient analytics and dApp development.
KYVE, a decentralized protocol for historical data validation and archiving, has partnered with Synternet, a blockchain that enables modular and interoperable data infrastructure across major chains. Together, they leverage the Interchain Stack to ensure reliable access to all types of data in Web3.
KYVE originally started as a smart contract archiving historical data on Arweave. However, to fully realize its potential, KYVE needed its own blockchain for scalability and security. The Interchain Stack, known for its simplicity, security, and flexibility, was the ideal solution. Consequently, KYVE launched its own Cosmos SDK Layer 1 blockchain in April 2022, enhancing its capabilities and integration with other blockchains.
Other Highlights of the Week
Justice Emeka Nwite, presiding over Nigeria's Federal High Court, has ruled against granting bail to Binance executive Tigran Gambaryan, citing concerns about his potential to flee the country. The Nigerian court's decision comes in light of Gambaryan facing charges related to money laundering and tax violations. Despite his plea for bail, the court deemed him a flight risk and thus denied his request.
Gambaryan's detention dates back to late February when he, along with Binance’s Africa regional manager, Nadeem Anjarwalla, visited Nigeria to engage in discussions regarding the company's operations with the Nigerian government. The trial commenced recently, with Gambaryan entering a plea of not guilty to the charges of money laundering. As legal proceedings unfold, the outcome remains uncertain, shaping the trajectory of this high-profile case.
President Joe Biden has blocked MineOne Cloud Computing Investment I L.P. from acquiring certain properties near the Francis E. Warren Air Force Base in Cheyenne, Wyoming, due to national security concerns. This decision follows findings that MineOne Partners Limited, a company based in the British Virgin Islands and primarily owned by Chinese nationals, aimed to purchase real estate within one mile of the base.
The specific property in question, acquired by MineOne in June 2022, is Lot 1, Block 10 North Range Business Park 3rd Filing. The development of this site for cryptocurrency mining raised alarms about potential espionage and surveillance risks due to the foreign-sourced equipment used.
The Committee on Foreign Investment in the United States (CFIUS) acted on a public tip and identified significant national security threats linked to the transaction, leading to the President’s intervention.
Two brothers have been indicted by the US government for allegedly attacking Ethereum trading bots last year. The Department of Justice revealed charges against Anton and James Peraire-Bueno on Wednesday, accusing them of conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. The brothers allegedly exploited the Ethereum blockchain to fraudulently obtain about $25 million in cryptocurrency within 12 seconds.
They were arrested on Tuesday and will appear before judges in Massachusetts and New York. The April 2023 attack targeted bots designed to profit by front-running transactions on the network. This type of activity, known as maximum extractable value (MEV), seeks to gain extra value during transaction block production beyond standard rewards and fees.
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