Category Archives: Cryptocurrencies

Lawyer lays out his reasoning on why XRP is not a security

Lawyer Jeremy Hogan believes the United States Securites and Exchange Commission has failed to legally demonstrate that XRP is a security.

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Lawyer lays out his reasoning on why XRP is not a security

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Ripple’s XRP (XRP) is not a security because it does not fit the definition of an “investment contract,” the “only” legislative definition that it could “possibly” fit, according to Jeremy Hogan, a partner at the law firm of Hogan & Hogan.

In a series of tweets on April 9, Hogan explained that, in his opinion, XRP could only be considered a security under the definition of an “investment contract,” as it doesn’t fit the other definitions of a security such as stocks or bonds.

Hogan argues, however, that the United States Securities and Exchange Commission has not demonstrated an implied or explicit investment contract in its suit against Ripple.

The #1 reason why XRP is not a Security (a thread).

First, under the legislative definition of a security, XRP can only POSSIBLY fit under the definition of an “investment contract.” It is not a stock or bond, etc..

Even the SEC concedes this: “investment contract.”

— Jeremy Hogan (@attorneyjeremy1) April 9, 2023

“Instead it argues that the purchase agreement is all that is required — and that is all it proves,” Hogan stated.

“But that argument tears the ‘investment’ from the ‘contract’ as a simple purchase, without more, [there] cannot be an ‘investment contract,’ it is just an investment (like buying an ounce of gold) as there is no obligation for Ripple to do anything except transfer the asset,” he added.

The SEC initiated a lawsuit in December 2020, claiming that Ripple illegally sold its XRP token as an unregistered security.

Ripple has long disputed the claim, arguing that it doesn’t constitute an investment contract under the Howey test — a legal test used to determine if a transaction qualifies as an investment contract. It was established in 1946 by the U.S. Supreme Court in the SEC v. W.J. case.

Hogan further argues that all of the “blue sky” cases, which the Howey case relies on for defining an “investment contract,” involved some form of a contract regarding the investment.

Related: Ripple CEO: XRP lawsuit resolved by June, SEC conduct ‘embarrassing’

“Indeed, how can a person ‘reasonably rely’ on an offeror to make them a profit when they have zero legal recourse when that offeror fails to come through?” he said.

“They cannot. Even the oft-quoted four-part test implies that a ‘contract’ of some sort is required.”

Hogan says the crux of the issue is not whether Ripple used money from the sale of XRP to fund its business, but if the SEC has proven that there was either an implied or explicit “contract” between Ripple and XRP purchasers relating to their “investment.”

“There was no such contract,” Hogan claimed.

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Bitget launches $100M Web3 fund for crypto projects in Asia

Bitget’s new fund will receive $100 million as an initial investment to support the next generation of Web3 projects.

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Crypto derivatives exchange Bitget launched a new fund focused on supporting the next generation of Web3 projects. According to a statement seen by Cointelegraph, $100 million will be invested in the fund as an initial investment. 

Bitget says it will target funding Web3-friendly venture firms and projects worldwide. It will focus on Asian projects from experienced teams with clear roadmaps that are working on real-world problems.

“We can see that Web3 space is evolving rapidly and many projects deserve the support to further advance such development and make Web3 a truly global phenomenon, as Web2 had once become. That is why the Bitget Web3 Fund will strive to seek out projects that have the most impact on this process,” said Gracy Chen, managing director of Bitget.

Related: China to upgrade national blockchain standards by 2025

According to the exchange, potential partners in the initiative include several venture capitalists such as Foresight Ventures, ABCDE Capital, SevenX Ventures and DAO Maker, as well as Dragonfly Capital — which recently announced a $10 million investment on Bitget to support its ongoing global expansion.

Bitget revealed that since launching in 2018, it has attracted over 80,000 traders and 380,000 copy traders. The exchange plans to expand spot trading, the launchpad and Bitget Earn products in 2023. Bitget recently acquired the BitKeep wallet — a Web3 access gateway with over 9.5 million users — for $30 million.

During last year’s bear market, the exchange also launched a $200 million fund to safeguard users’ assets and restore investors’ confidence. Bitget pledged to secure the fund’s value for three years. In addition, the exchange claims to have implemented strict Know Your Customer (KYC) and Anti-Money Laundering (AML) policies last year to keep bad actors out of its services. 

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Ethereum validator cashes in 689 ETH from MEV-Boost relay

The 689 Ether, worth nearly $1.3 million, is the largest reward received since the 691 Ether reward on March 20 paid to Lido.

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A 689 Ether (ETH) reward worth $1.28 million has been paid from a single Miner Extractable Value (MEV)-boost relay block on the Ethereum Beacon Chain in one of the largest rewards in recent months.

Ethereum liquid staking solution Lido was paid the reward from block number 17007842 on the Beacon Chain — which was finalized on April 9, contained 47 transactions and was built by, according to transaction data.

High Proposer Payment Alert!
Validator 0x388c… received 689.02 ETH.
Block built by a @beaverbuild builder (0x96a59d…)‍
Slot: 6,181,978.
Received through the @GnosisDAO relay.

— MEV-Boost Bot (@mevproposerbot) April 9, 2023

The reward almost matched Lido’s most recent high of 691 Ether on March 20.

The figure raised the eyebrows of Martin Köppelmann, the co-founder and CEO of Ethereum-based infrastructure platform Gnosis, who suggested Ethereum users should use a service like MEVBlocker to prevent their transactions from being exploited.

More than 90% of the MEV currently being paid to validators could go to users if all users or wallets would use services like

— Martin Köppelmann (@koeppelmann) April 9, 2023

According to MEVBlocker, MEV bots have extracted more than $1.38 billion from Ethereum users attempting to trade, provide liquidity and mint nonfungible tokens (NFTs).

These centralized MEV-boost relays are able to extract value by aggregating blocks from multiple builders in order to select the one with the highest fees.

One of the most common types of MEV exploits is the “sandwich” attack, which occurs when an attacker places a large trade on either side of a target’s transaction, manipulating the price and profiting from the price change.

Related: ETH staking on top exchanges contributes to Ethereum censorship: Data

MEV-boost relays stem from the concept of Proposer-Builder Separation (PBS), which was introduced by the Ethereum research organization Flashbots in 2021 in the lead-up to Ethereum’s transition to proof-of-stake in September.

Separating the role of proposers from block builders is intended to promote more competition at the consensus level, further decentralize the Ethereum network and strengthen censorship resistance.

However, Ethereum has encountered several censorship issues since The Merge took place, namely compliance with standards laid down by the Office of Foreign Assets Control (OFAC), although the number of compliant blocks has since fallen.

There are currently 10 active relays, with Flashbots responsible for relaying more than 50% of the MEV-boost blocks since MEV was introduced in 2021, according to

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Ethereum staking deposits dip due to regulatory pressure and Shapella upgrade

The amount of ETH being staked monthly has recently dipped according to the on-chain analytics platform Glassnode.

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Ethereum staking deposits have declined slightly in recent weeks due to increased regulatory pressure and the Shapella upgrade slated for April 12.

On April 9, on-chain analytics provider Glassnode reported on the current state of the Ethereum staking ecosystem.

The data revealed that deposit activities are currently low “due to regulatory pressure and the Shanghai upgrade.”

Financial regulators in the United States have been coming down hard on crypto this year. The Securities and Exchange Commission (SEC) is adamant that Ether (ETH) is a security and has cracked down on staking despite there being no official legislation from Congress classifying ETH as such.

The Ethereum network will undergo a long-awaited upgrade on April 12. The Shapella hard fork, also known as the Shanghai hard fork, will enable the phased release of ETH staked on the Beacon Chain.

These two factors have caused the dip in Ethereum staking deposits, according to Glassnode.

The firm also noted that major centralized exchanges such as Coinbase, Binance, and Kraken have lost a lot of market share to the liquid staking platform Lido.

“As the dust settled between the three giants, it was Lido who emerged victorious, continuing to dominate deposit inflows as of present,” it noted.

Deposit trends by staking providers have exhibited a clear shift over time with Kraken, Binance and Coinbase jousting for deposit allocations across the Beacon Chain’s early days.

As the dust settled between the three giants, it was Lido who emerged victorious, continuing to…

— glassnode (@glassnode) April 9, 2023

Lido currently accounts for almost a third of the total amount of ETH staked. This equates to around $11 billion from the 5.9 million ETH on the platform.

Centralized exchanges such as Coinbase take a hefty 25% commission from the staking rewards, with Coinbase’s commissions being even higher for other assets such as Cardano (ADA) and Solana (SOL).

Lido takes a 10% commission and offers the potential of earning additional yields on DeFi platforms through its staking token Lido Staked ETH (stETH). This explains the shift over time as savvy stakers switched to more profitable platforms.

Analysts have predicted that liquid staking platforms such as Lido will get a boost when ETH is released from the Beacon Chain after the Shapella upgrade.

Related: Analysts debate the ETH price outcomes of Ethereum’s upcoming Shapella upgrade

According to the Ethereum metrics tracking platform Ultrasound.Money, there are currently 18.1 million ETH staked in total currently valued at around $33.7 billion and representing 15% of the entire supply.

After the Shapella upgrade, this will be slowly released for withdrawal in the weeks and months that follow.

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‘Right time’ for Hong Kong’s Web3 push despite market flux — Financial Secretary

Now is the “right time” for Hong Kong to push forward with Web3 despite the crypto market fluctuations, according to the Financial Secretary of Hong Kong, Paul Chan.

In an April 9 blog post, Chan explained that one of the three major directions he has proposed in the city’s budget was for the further development and application of Web3.

Translated, Chan wrote that for “Web3 to steadily take the road of innovative development” Hong Kong will “adopt a strategy that emphasizes both ‘proper regulation’ and ‘promoting development.'”

Chan says the region also plans to focus on financial security, preventing systemic risks and focus on investor education, protection, and measures around anti-money laundering.

Paul Chan appearing via Zoom to deliver opening remarks for a Hong Kong financial conference. Source: Twitter

In October last year, the government of Hong Kong floated the idea of introducing a bill to regulate crypto.

By Feb. 20 of this year, Hong Kong’s Securities and Futures Commission (SFC), the local securities regulator, released a proposal for a regime for cryptocurrency exchanges set to take effect in June.

The industry has been suffering a savage bear market and setbacks with exchange collapses and ongoing scrutiny from regulators.

According to Chan the industry is simply going through the same process as the Internet in the early 2000s, and after the “bursting of the bubble”, market participants became much calmer.

“After the tide of speculation ebbs, the remaining powerful players will focus more on competing in technological innovation, practical application and value creation, and contribute to improving the quality of the real economy,” Chan wrote.

“In the next stage, market participants need to develop blockchain technology more deeply, so that its characteristics and advantages of transparency, efficiency, security, disintermediation, de-platformization, and low cost can find wider application scenarios and solve more existing problems.”

Hong Kong’s approach to crypto regulation greatly contrasts that of the United States, which has adopted a more hardline response that’s led to speculation that the crypto industry’s “center of gravity” will shift to Hong Kong.

Related: Hong Kong crypto firms seeing interest from Chinese banks: Report

Cryptocurrency exchange has already announced plans to launch a presence in Hong Kong following the local government’s planned 50 million Hong Kong dollar ($6.4 million) cash injection into Web3 in the city’s 2023-24 budget.

In a March 20 speech in Hong Kong, the Secretary for Financial Services and the Treasury, Christian Hui, stated that Hong Kong has been attracting “interest” from various crypto firms worldwide since October 2022.

“The road of innovation and technological change has never been smooth sailing,” Chan said in his latest post.

“Even if the development direction is locked, the actual path has to be worked out step by step; only by persisting in trying can we find new solutions and new ways out,” he added.

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FTX financial controls were a ‘hodgepodge’ of apps, says court filings

FTX was run by three inexperienced people “not long out of college,” who relied on “a hodgepodge” of online shared documents and communications across a series of different apps to manage the multi-billion dollar empire according to FTX CEO John Ray III.

In an April 9 court filing in a Delaware Bankruptcy Court, John J Ray III gave his first detailed account of the control failures at FTX.

Ray stated that his restructuring team had “identified extensive deficiencies in the FTX Group’s controls” from a lack of appropriate financial and accounting controls to an inadequate group management structure and record-keeping process.

FTX apparently “relied on a hodgepodge of Google documents, Slack communications, shared drives and excel spreadsheets” to manage its assets and liabilities.

FTX used the accounting software QuickBooks, which Ray said was designed for “small and mid-sized businesses” and not for a firm that operates across “multiple continents and platforms” such as FTX.

Related: Names of non-US FTX users demanded by mainstream media outlets

FTX’s bookkeeping was reported to have been neglected as around 80,000 transactions were left as unprocessed accounting entries in “catch-all QuickBooks accounts titled ‘Ask My Accountant.’”

Ray emphasized that co-founders Sam Bankman-Fried and Gary Wang, along with former engineering director Nishad Singh had the “final voice in all significant decisions,” despite very limited experience.

“These three individuals, not long out of college and with no experience in risk management or running a business, controlled nearly every significant aspect of the FTX Group.”

Wang and Singh’s significant control over FTX was noted by an unnamed FTX executive who stated that “if Nishad [Singh] got hit by a bus, the whole company would be done. Same issue with Gary [Wang].”

It was noted that the company couldn’t provide a complete list of its employees at the time of bankruptcy filing in Nov. 2022.

FTX failed to file its financials on time at the end of financial reporting periods and did not carry out back-end checks to identify and correct material errors.

Brett Harrison, the president of FTX.US, raised concerns with Bankman-Fried and Singh regarding “the lack of appropriate delegation of authority, formal management structure, and key hires at FTX.US.”

In response, Harrison’s bonus was significantly reduced and he was instructed to apologize to Bankman-Fried by the firm’s internal counsel, which he refused to do. It was reported that Harrison resigned following the disagreement.

Not sure how this is “new,” as I’ve written and spoken publicly about the circumstances of my resignation from FTX US a number of times since January.

— Brett Harrison (@BrettHarrison88) April 9, 2023

Ray stated in a Feb. 6 court filing that when he took control of FTX in Nov. 2022 there was “not a single list of anything” related to bank accounts, income, insurance or personnel, causing a “massive scramble for information.”

He pushed back against the motion to assign an independent examiner to the bankruptcy case out of fears that “inadvertent errors” could result in “hundreds of millions of dollars of value being destroyed.”

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Coinbase CEO says Bitcoin Lightning is ‘something we’ll integrate’

“Lightning is great and something we’ll integrate,” Armstrong said in response to an allegation that he was “ignoring” the network.

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Bitcoin (BTC) layer 2 scaling solution Lightning may feature on the cryptocurrency exchange Coinbase in some capacity, according to its chief Brian Armstrong.

In a tweet on April 8, Armstrong said that “Lightning is great and something we’ll integrate” in response to a tweet criticizing him for “actively ignoring” the network.

My tweets auto-delete after some number of months, so there is no search history.

Lightning is great and something we’ll integrate.

— Brian Armstrong (@brian_armstrong) April 8, 2023

Armstrong provided no further details on what a Lightning integration with Coinbase would involve or when it could be expected.

Coinbase, along with Binance and the now bankrupt FTX, has been called out in the past for not integrating the Lightning network which enables faster and cheaper BTC transactions than the Bitcoin base network.

According to a GitHub repository by Lightning enthusiast David Coen, Coinbase would join Bitfinex, Kraken and OKX as the largest trading platforms to have integrated Lightning, if Armstrong stays true to his word.

Coen had previously suggested that Lightning integration may go against the business plan for many of these trading platforms, “since the priority seems to be to integrate as many altcoins as possible and follow the trends of the market.”

Armstrong claims to have tested out a Lightning network application in recent days, and sent Cointelegraph reporter Joseph Hall $100 in BTC after Hall shared a video of himself using Bitcoin in Senegal.

The $100 was a prize by Armstrong for those who shared the “best” examples of how people are using crypto in Africa. Hall said he would give away the funds to onboard others to Bitcoin.

— Joe Nakamoto (@JoeNakamoto) April 7, 2023

Hall reported, however, that he hasn’t received the payment, prompting Bitcoiner Derek Ross to suggest that Armstrong “needs a lesson on Lightning.”

Coinbase has lately been more active in the Ethereum ecosystem having launched “Base” on Feb 23 — an Ethereum layer 2 application-focused network powered by fellow layer 2 Optimism.

Related: Bitcoin Lightning Network growth is organic, coming from real-world adoption

Interestingly, Armstrong wrote a “Scaling Bitcoin” article in January 2016, where he said that he would throw support behind Bitcoin scaling solutions:

“We also did it to show our support for scaling Bitcoin, and encourage things to move forward, since we’d like to see a solution sooner rather than later.”

Lightning was launched about two years later in March 2018, with last month marking the fifth anniversary of the network.

Cointelegraph contacted Coinbase for comment but did not receive an immediate response.

Magazine: Bitcoin in Senegal: Why is this African country using BTC?

Bitcoin price sets up for an explosive move as ADA, XLM, AAVE and CFX turn bullish

The long weekend has not produced any fireworks in Bitcoin (BTC) price, which continues to trade inside an ever-narrowing range. Bitcoin is on track to form a third consecutive Doji candlestick pattern on the weekly chart. This suggests that the Bitcoin bulls and the bears are not clear about the next directional move.

It is not only Bitcoin that is stuck inside a range. On April 7, Jurrien Timmer, director of global macro at asset manager Fidelity Investments, tweeted that the S&P 500 Index had been stuck inside a range for the past nine months and a breakout was due “sooner or later.”

Crypto market data daily view. Source: Coin360

Bitcoin’s failure to break above the $30,000 level has attracted profit-booking in several altcoins but a few have witnessed shallow pullbacks. This indicates that traders are holding on to their positions expecting a move higher.

Let’s study the charts of select altcoins that may turn up and start an uptrend if Bitcoin breaks out to the upside. What are the resistance levels above which these five cryptocurrencies turn bullish?

Bitcoin price analysis

Bitcoin has been trading inside a tight range for the past two days, indicating indecision among the bulls and the bears. Usually, tight ranges are followed by an expansion in volatility.

BTC/USDT daily chart. Source: TradingView

The 20-day exponential moving average ($27,500) is flattening out and the relative strength index (RSI) has gradually been slipping toward the center. This suggests a balance between supply and demand.

If the price tumbles below the 20-day EMA, several short-term stop losses may be triggered and the BTC/USDT pair may dive to the breakout level of $25,250.

Conversely, if the price rebounds off the 20-day EMA with strength, it will suggest that the sentiment remains positive and traders are buying the dips. A rally above $29,200 could enhance the prospects of a rally to $30,000 and subsequently to $32,500.

BTC/USDT 4-hour chart. Source: TradingView

The 20-EMA is flattening out on the 4-hour chart and the RSI is just below the midpoint. This does not give a clear advantage either to the bulls or the bears. This uncertainty is unlikely to continue for long and a directional move could soon start. However, it is difficult to predict the direction of the breakout.

Therefore, it is better to wait for the breakout to happen before establishing directional bets. The important level to watch on the upside is $29,200 and on the downside is $26,500. A breach of either level could start a short-term trending move.

Cardano price analysis

The bulls are not allowing Cardano (ADA) to dip below the 20-day EMA ($0.37), indicating demand at lower levels.

ADA/USDT daily chart. Source: TradingView

The upsloping 20-day EMA and the RSI in the positive area suggest that the path of least resistance is to the upside. The ADA/USDT pair could first rise to the neckline of the inverse head and shoulders (H&S) pattern. A break and close above this resistance will signal a potential trend change. The pair could then rally toward the pattern target of $0.60.

If bears want to prevent the up-move, they will have to quickly yank the price back below the 20-day EMA. The pair may then drop to the 200-day simple moving average ($0.35) and later to $0.30.

ADA/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows that the bulls have pushed the price above the 20-EMA and will next try to overcome the barrier at the downtrend line. If they do that, it will suggest that the pullback may be over. The pair may then climb to the neckline where the bears are expected to mount a strong defense.

Contrarily, if the price faces rejection at the downtrend line, it will suggest that bears are active at higher levels. The selling could accelerate below $0.37 and the pair may plunge to the 200-SMA.

Stellar price analysis

Stellar (XLM) turned down from the overhead resistance of $0.12 and the price is nearing the 20-day EMA ($0.10). The bulls are likely to buy the dips to the 20-day EMA.

XLM/USDT daily chart. Source: TradingView

If the price rebounds off the 20-day EMA, the bulls will again try to clear the overhead hurdle. If they succeed, the XLM/USDT pair will complete a bullish rounding bottom pattern. That could signal the start of a new up-move. The pair may first rally to $0.15 and thereafter march toward the pattern target of $0.17.

Contrary to this assumption, if the price turns down and breaks below the 20-day EMA, it will suggest that bulls are losing their grip. The pair may then drop to the 200-day SMA ($0.09). This is a make-or-break level for the bulls because if it cracks, the pair may plummet to $0.07.

XLM/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows that the pair is correcting inside a falling wedge pattern. The price has bounced off the support line and the bulls will next attempt to propel the pair above the wedge. If they manage to do that, the pair could rally to $0.11 and subsequently to $0.12.

On the other hand, if the price turns down and plummets below the support line, it will suggest that the selling has intensified. There is a small support at $0.10 but if that cracks, the decline could extend to the 200-SMA.

Related: SushiSwap approval bug leads to $3.3 million exploit

Aave price analysis

Aave (AAVE) has turned down from the overhead resistance of $82, indicating that the bears are fiercely protecting this level. They have pulled the price below the immediate support at the 20-day EMA ($75).

AAVE/USDT daily chart. Source: TradingView

The AAVE/USDT pair could next slip to the 200-day SMA ($73), which is close to the uptrend line. Buyers are likely to defend this level with vigor. If the price rebounds off the uptrend line and breaks above the 20-day EMA, the pair could reach $82.

If bulls overcome this barrier, the pair will complete an ascending triangle pattern. This setup has a target objective of $100. This bullish view will invalidate if the price continues lower and breaks below the uptrend line. The pair may then slide to $68 and later to $64.

AAVE/USDT 4-hour chart. Source: TradingView

The bears have pulled the price to the 200-SMA on the 4-hour chart. The 20-EMA has started to turn down and the RSI is in the negative territory, indicating that bears have the upper hand.

If the 200-SMA gives way, the pair could decline further to the uptrend line. This is an important level for the bulls to defend because a break below it will further strengthen the bears.

On the upside, a break above the 20-EMA will be the first sign that the bulls are making a comeback. The pair may then rise to the overhead resistance at $82.

CFX price analysis

Conflux (CFX) has been in a corrective phase for the past few days but a minor positive is that the bulls are trying to defend the 20-day EMA ($0.36).

CFX/USDT daily chart. Source: TradingView

If the price rebounds off the current level, the CFX/USDT pair could reach the downtrend line. This is an important level for the bears to guard because a break above it could open the doors for a possible rally to $0.44 and then $0.49.

Conversely, if the price plunges and sustains below the 20-day EMA, it will suggest that the bulls may be rushing to the exit. That could attract further selling, pulling the price toward the next support at $0.30. The bulls are expected to buy the dips to this level.

CFX/USDT 4-hour chart. Source: TradingView

The 4-hour chart shows that the bears are trying to keep the price below the 20-EMA. That could pull the pair to the 200-SMA, which is likely to act as a major support.

If the price rebounds off this level, the bulls will again try to drive the price to the downtrend line. This is the key level to keep an eye on because a break above it will signal that bulls are back in the game.

On the downside, a break and close below the $0.30 support could attract further selling, sinking the price to $0.25.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Community wants Arbitrum Foundation to return 700M ARB to DAO Treasury

A new proposal asks the Arbitrum Foundation to return 700 million ARB tokens after community backlash. Voting ends on April 14.

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As per the proposal, the Foundation should proceed with its budget plan only after returning the tokens. “This is a symbolic gesture to demonstrate that the governance holders ultimately control the DAO, not the Arbitrum service provider nor the Foundation,” said a community member.

Voting will end on April 14. At the time of writing, 55% of voters supported the proposal, 42% opposed it, and 2% abstained.

Screenshot: AIP 1.05: Return 700M ARB to the DAO Treasury. Source: Arbitrum’s DAO.

The dispute between Arbitrum’s Foundation and its community started at the end of March, following the Foundation’s first governance proposal (AIP-1) which called for funding its operations with 750 million ARB tokens — worth nearly $1 billion.

Following backlash from community members, the Foundation said in a forum post on April 2 that AIP-1 was a ratification, not a proposal. It added that some of the tokens were already sold for stablecoins. At that time, the Foundation noted that its symbolic first governance attempt failed due to communication problems and decisions that were “clearly not articulated correctly.”

A few days later, the Arbitrum Foundation released a set of new improvement proposals aimed at restoring community dialogue. The new proposals include AIP-1.1, which covers a smart contract lockup schedule, spending, budget and transparency. The other, AIP-1.2, tackles amendments to current founding documents and lowers the proposal threshold from 5 million ARB tokens to 1 million ARB “to make governance more accessible.”

The efforts, however, did not resolve the issues with ARB holders. “The Foundation has unilaterally been allocated $750M tokens from the DAO that was not approved by the governance token holders. Any funds must be returned until it has been properly allocated by the DAO and the DAO only,” claims the proposal seeking the return of the funds.

The Arbitrum community initiated a new proposal requesting the Arbitrum Foundation to return 700 million ARB tokens to its DAO Treasury. The move comes after the Arbitrum Foundation transferred the funds without receiving the community’s approval in March. 

SushiSwap approval bug leads to $3.3 million exploit

Only users who have traded on the decentralized exchange in the last four days are apparently affected.

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A bug on a smart contract on the decentralized finance (DeFi) protocol SushiSwap led to over $3 million in losses in the early hours of April 9, according to several security reports on Twitter. 

Blockchain security companies Certik Alert and Peckshield posted about an unusual activity related to the approval function in Sushi’s Router Processor 2 contract — a smart contract that aggregates trade liquidity from multiple sources and identifies the most favorable price for swapping coins. Within a few hours, the bug led to losses of $3.3 million.

— PeckShield Inc. (@peckshield) April 9, 2023

According to DefiLlama pseudonymous developer 0xngmi, the hack should only affect users who swapped in the protocol in the past four days.

Sushi’s head developer Jared Grey urged users to revoke permissions for all contracts on the protocol. “Sushi’s RouteProcessor2 contract has an approval bug; please revoke approval ASAP. We’re working with security teams to mitigate the issue,” he noted. A list of contracts on GitHub with different blockchains requiring revocation has been created to address the problem.

We’ve confirmed recovery of more than 300ETH from CoffeeBabe of Sifu’s stolen funds. We’re in contact with Lido’s team regarding 700 more ETH.

— Jared Grey (@jaredgrey) April 9, 2023

Hours after the incident, Grey took to Twitter to announce that a “large portion of affected funds” had been recovered through a whitehat security process. “We’ve confirmed recovery of more than 300ETH from CoffeeBabe of Sifu’s stolen funds. We’re in contact with Lido’s team regarding 700 more ETH.”

The Sushi’s community has had an intense weekend. On April 8, Grey and his counsel provided comments on the recent subpoena from the United States Securities and Exchange Commission (SEC).

“The SEC’s investigation is a non-public, fact-finding inquiry trying to determine whether there have been any violations of the federal securities laws. To the best of our knowledge, the SEC has not (as of this writing) made any conclusions that anyone affiliated with Sushi has violated United States federal securities laws,” he stated.

Grey claims to be cooperating with the investigation. A legal defense fund in response to the subpoena was proposed on Sushi’s governance forum on March 21.

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