Crypto prices plunged amid Middle East crisis, SEC enforcement over Uniswap, and SBF appeals sentence
DATA from CryptoCompare shows that Bitcoin's price failed to remain above the $70,000 mark over the past week, with Iran’s attack on Israel seemingly leading to a sharp price drop to a $61,000 low, before recovering to now trade at $66,030.
Ethereum’s Ether, the second-largest cryptocurrency by market capitalisation, moved in a similar way. Over the past week, ETH’s price plunged by nearly 6% from around $3,700 to a current level of $3,215, having recovered from a low around $2,900 when tensions escalated in the Middle East.
Headlines in the cryptocurrency space over the week pointed to the world’s largest asset manager BlackRock significantly expanding the number of authorized participants for its spot Bitcoin exchange-traded fund, the iShares Bitcoin Trust (IBIT).
The new entrants are Wall Street heavyweights Goldman Sachs, Citigroup, UBS, and Citadel Securities, along with clearing house ABN AMRO, which join the existing participants, which include Jane Street Capital, JPMorgan Chase, Macquarie, and Virtu Americas.
A crucial role of these authorized participants is to ensure that the ETF’s share price aligns with the fund’s underlying assets and provide a significant source of liquidity for the fund. It’s common for established ETFs to have multiple APs.
Headlines also revealed that in the decentralised finance space, Coinbase’s Ethereum Layer-2 network Base saw its total value locked top the $4 billion level amid a memecoin trading frenzy that took advantage of its low transaction costs.
The network’s average daily transactions per second experienced a nearly 30% increase, averaging 35.19 transactions per second. This rate surpasses the combined transaction rate of Ethereum itself and its competitor Arbitrum.
Developers on Solana, another high-performance blockchain with low transaction fees that was flooded with memecoin trading, had to address a significant congestion problem that affected the network and saw users report slow processing times and a large number of transactions being dropped.
The congestion came as a result of a wave of spam transactions, where bots attempted to flood the network and prioritize their own activity over legitimate transactions and was compounded by memecoin trading.
Decentralised exchange Uniswap receives Wells Notice from SEC
Over the past week, leading decentralized exchange Uniswap revealed it received a Wells notice from the US Securities and Exchange Commission (SEC), signalling the regulator’s intent to pursue enforcement action against it.
A Wells notice is used by the SEC to inform entities of possible enforcement action, and allows companies to write back to the regulator and explain why they shouldn’t move forward with it. Uniswap detailed the SEC’s focus appears to be on the platform potentially operating as an unregistered securities exchange and broker.
Meanwhile, the SEC also deferred its decision on allowing options trading on spot Bitcoin exchange-traded funds, pushing its decision deadlines to either approve or reject them to May 29.
The New York Stock Exchange, a self-regulatory organization, submitted a rule change request on February 9, which began a period for public commentary. As no conclusion was made within the first 45 days SEC chose to utilise the allowable extension.
Sam Bankman-Fried appeals against 25-year sentence
Sam Bankman-Fried, the founder of the collapsed cryptocurrency exchange FTX, has lodged an appeal against his federal fraud and conspiracy charges, as well as his 25-year prison sentence.
Just a month ago, Judge Lewis A. Kaplan from the U.S. District Court in Manhattan handed down the sentence to Bankman-Fried, 32, who was also ordered to forfeit $11 billion for his involvement in what the prosecution has labeled as one of the largest financial frauds ever.
A panel of three judges from the 2nd Circuit U.S. Court of Appeals in Manhattan will hear the appeal. Federal criminal defendants typically have a low success rate in appeals, with less than 10% of cases being overturned. If Bankman-Fried’s appeal in the 2nd Circuit is unsuccessful, he would have to make a petition to the U.S. Supreme Court, a path deemed even more difficult.
The week also saw the administrators of the FTX estate sell a portion of its Solana holdings at a steep discount. The sale, which attracted major cryptocurrency players, is estimated to have seen the estate offload between 25 to 30 million SOL tokens for roughly $64 each, raising up to $1.9 billion.
Solana is currently trading at around $150 per token, and has remained above the $100 mark for most of this year. The tokens FTX sold are locked into a predetermined vesting period, meaning they won't be immediately available for trading. This gradual release will take place over the course of four years.
READ MORE: Sam Bankman-Fried to appeal 25 year sentence
Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies.
