SEC May Classify Ether as a Security, Raising Regulatory Concerns

This week's top news includes the SEC investigating Ether's classification as a security, Celsius seeking $2 billion in withdrawals, the SEC facing sanctions for abuse of power, Binance offering rewards for insider trading reports, SBF contesting his proposed 50-year sentence, and Ether's potential to reach $5,400 by 2024.

Is the SEC Poised to Classify Ether as a Security?

The Securities and Exchange Commission (SEC) is reportedly probing Ether, the native token of the Ethereum blockchain, to determine whether it should be categorized as a security. This classification would have significant implications for the regulation and trading of Ether.

According to a recent report, the SEC has issued subpoenas to several companies as part of its investigation into the Ethereum Foundation, the non-profit organization responsible for developing and maintaining the Ethereum network. This probe could potentially grant the SEC regulatory authority over Ether if it is deemed to be a security.

The catalyst for the investigation may be a GitHub prompt suggesting that the Ethereum Foundation is under scrutiny by a "state authority." Additionally, numerous U.S.-based companies have reportedly received requests from the SEC to provide documents and financial data pertaining to their dealings with the Ethereum Foundation.

Celsius Seeks to Reclaim $2 Billion in Customer Withdrawals

Celsius Network, the now-bankrupt crypto lender, is reportedly attempting to recover $2 billion from major customers who withdrew funds from the platform shortly before its collapse in July 2022.

A Celsius bankruptcy oversight committee has reportedly begun contacting customers who withdrew over $100,000 prior to the company's demise. The goal is to use any potential recovered funds to repay customers who were unable to withdraw their assets in a timely manner.

The committee is offering affected customers a "favorable price" if they agree to settle, while threatening legal action if the funds are not returned. Additionally, customers who settle may have their notional digital assets adjusted based on their July 2022 value, which was near the bottom of the crypto bear market.

SEC Sanctioned for 'Gross Abuse of Power' in Debt Box Case

A United States district court has imposed sanctions on the SEC for acting in "bad faith" in a lawsuit filed against Debt Box, a software mining license provider.

The SEC initially filed a motion to dismiss without prejudice, but this was denied by Judge Robert J. Shelby. Shelby criticized the regulator for intentionally misleading the court about evidence it obtained to secure a temporary restraining order and freeze of Debt Box's assets in August 2022.

In its lawsuit, the SEC alleged that Debt Box perpetrated a $50 million fraudulent cryptocurrency scheme, claiming that the company had already sent $720,000 abroad and would flee to the United Arab Emirates to transfer additional assets if it was notified of the order.

However, Shelby concluded that the SEC misrepresented the evidence and that the $720,000 transfer was instead sent within the United States.

Binance Offers $5 Million Reward for Insider Trading Tip-Offs

Cryptocurrency exchange Binance has announced a reward program offering $100,000 to $5 million for information leading to the detection of insider trading or corruption on its platform.

On March 16, Binance announced that it would list the Solana-based memecoin, Book of Meme (BOME). The token was paired with Bitcoin, Tether, First Digital USD, and the Turkish lira.

Prior to the Binance listing, a crypto whale purchased 314 million BOME tokens for $2.3 million on the Raydium decentralized exchange at an average price of $0.0074. After the listing, the value of the tokens surged to a high of $0.026, valuing the tokens at approximately $8 million.

After the listing, the trade was flagged, sparking community discussions. Some speculated that it was an insider trade, while others suggested that the trader may have been an insider from Binance.

SBF Slams Proposed 50-Year Sentence as 'Medieval'

Lawyers representing former FTX CEO Sam Bankman-Fried (SBF) have argued that a proposed maximum sentence of 50 years in prison for the founder is based on a "medieval" view of punishment and does not accurately reflect the severity of his crimes.

On March 19, Bankman-Fried's lawyers, Marc Mukasey and Torrey Younger, wrote to Judge Lewis Kaplan in response to the federal government's sentencing proposal, which was submitted on March 15.

"With marked hostility, the memorandum distorts reality to support its treasured 'loss' narrative and casts Sam as a wicked super-villain," they stated.

Market Winners and Losers

At the end of the week, Bitcoin (BTC) was trading at $65,744, Ether (ETH) at $3,516, and XRP at $0.64. The total market capitalization stood at $2.51 trillion, according to CoinMarketCap.

Among the top 100 cryptocurrencies, the top three altcoin gainers of the week were Ondo (ONDO) at 37.73%, Jupiter (JUP) at 35.27%, and Fantom (FTM) at 33.59%.

The top three altcoin losers of the week were Bonk (BONK) at -31.09%, dogwifhat (WIF) at -27.28%, and Near Protocol (NEAR) at -26.12%.

Memorable Quotations

"Clients still will never be in the same place they would have been had they not crossed paths with Mr. Bankman-Fried and his so-called brand of 'altruism.'"

• John Ray III, restructuring officer and CEO of FTX

"Am I sorry for a corporation going bankrupt? No. Like, corporations go bankrupt all the time."

• Kyle Davies, co-founder of Three Arrows Capital

"People can do what they want with their money but sending money to a 'memecoin presale' that has a 99.9% chance of rugging is definitely just dumb as hell."

• Anthony Sassano, independent Ethereum educator

"I suppose it's that time of the cycle where everybody freaks out about Cardano's potential and roadmap, so they throw a wave of FUD at us."

• Charles Hoskinson, founder of Cardano

"Dogecoin's enduring popularity and the active community support suggest that it has transcended its origins as a meme to become a staple of the cryptocurrency world."

• Coinbase, cryptocurrency exchange

"It will be interesting to watch what, if any, excuse the SEC uses if it were to delay or deny an ETH ETF, given it has already informed the market on ETH being outside its jurisdiction."

• Brian Quintenz, former commissioner of the CFTC

Ethereum Price May Reach $5.4K in 2024, Says Key Indicator

Ether's price could potentially reach $5,400 in 2024, according to a technical price indicator used by traders to determine whether a cryptocurrency is overbought or oversold.

On March 22, Ether's price was trading around the $3,500 mark, approximately 27% below its all-time high of $4,891 reached on November 16, 2021, according to CoinMarketCap data.

According to pseudonymous CryptoQuant-verified analyst Binhdangg, Ether could surpass $5,400 in a high-risk scenario based on the Mayer multiple oscillator, a ratio that compares Ether's current price to its 200-day moving average.

However, Bitfinex analysts cautioned that Ether's price could potentially reach a much higher level:

"We expect it to reach oversold conditions this year based on the fact that there's a cyclical behavior of the asset to oscillate between the overbought and oversold bands of the indicator. However, it is a dynamic moving average-based deviation, and the upper band could also be much higher than the $5,400 level by the time the price reaches those levels."

Hacker Moves $10 Million from 2023 Phishing Incident to Twister Money

On March 21, blockchain security firm CertiK flagged an account linked to the $24 million hack transferring 3,700 ETH to Twister Money. The funds had been stolen from a crypto whale in a phishing incident on September 6.

At the time, the investor lost $24 million in staked ETH on the liquid staking provider Rocket Pool. The hack was executed in two transactions: one took 9,579 stETH, while the other drained 4,851 rETH from the crypto whale.

Rip-off Sniffer, an anti-scam project, indicated that the victim had signed an "Increase Allowance" transaction, which enabled token approvals for the hacker. With smart contracts, this feature allows third parties to spend ERC-20 tokens belonging to others if granted approval.

Old Dolomite Exchange Contract Exploited for $1.8 Million

An outdated contract previously used by the Dolomite crypto exchange was exploited for approximately $1.8 million, according to a March 20 report from blockchain security platform CertiK.

The exploit affected users who had previously granted approvals to the contract, and the development team recommended revoking approvals to the Ethereum Dolomite address beginning with 0xe2466.

The development team claimed that users who had only interacted with the current version on Arbitrum would not be affected.

They also disabled the vulnerable contract to protect users who had not yet fallen victim to the attack. Nonetheless, the team urged users to revoke approvals to this contract.