Biggest Crypto News Roundup – June
Ethereum scores a major victory, the market faces a $440 million liquidation hit, Shopify embraces crypto payments, and SEC Chair Gary Gensler reveals the timeline for Ethereum Spot ETF approval. Dive into this month’s hottest and latest developments in the crypto space.
Big Win for Ethereum As SEC Drops Investigation
Big win for Ethereum: the SEC has dropped its investigation into Consensys, the company behind MetaMask, about whether Ethereum (ETH) is a security.
This story started in April 2024 when Consensys sued the SEC. They claimed the SEC, led by Gary Gensler, was overreaching by trying to regulate ETH as a security. This was a big issue because, in the past, the SEC had said ETH was NOT a security. The lawsuit also revealed that Consensys received a Wells Notice (indicating future enforcement actions) regarding MetaMask Swaps and Staking products.
The stakes were high. The SEC classifying ETH as a security could have led to heavy regulatory scrutiny, making things difficult for Ethereum users and developers. The investigation focused on Ethereum’s move to a proof-of-stake system, raising questions about its regulatory status.
But now, the SEC has closed the investigation without any charges. This has brought huge relief to the Ethereum community. It means that, for now, ETH won’t be treated as a security under current rules. However, the SEC’s notice didn’t completely rule out future investigations.
Update: Despite the SEC dropping its investigation, Consensys is reportedly moving forward with their lawsuit.
The impact of this decision was immediate: Ethereum’s price jumped by 3%, showing how happy the market was. This outcome gives Ethereum more stability for the immediate future. While this is a big win, this is only a small step in a long journey.
Crypto Market Downturn Wipes Out $440M
On June 21, 2024, Bitcoin’s price dropped to $63,702, causing a massive shake-up in the crypto market. This sudden fall triggered $440 million in liquidations, hitting traders hard.
Data from CoinGlass showed that over 87.5% of these liquidations were from long positions on Bitcoin, highlighting the risky bets many traders had placed on a price rise. The downturn wasn’t just about Bitcoin; altcoins like Fantom (FTM), Enjin (ENA), SUI, and Uniswap (UNI) saw losses of up to 17%.
A key factor behind this market drop was the Federal Reserve’s decision to keep interest rates at a 23-year high of 5.25% to 5.5%, adding to market uncertainty. Additionally, recent massive token unlocks with projects like Aptos, Immutable X, and Arbitrum releasing $483 million worth of tokens flooded the market, adding to the cause.
Despite the turbulence, experts believe the market is just correcting itself. Seasoned investors remain optimistic, noting that such cycles are natural and the market is likely to recover and steadily rise in the long run.
Meta in Legal Trouble Over Scam Crypto Ads
Meta is facing legal trouble after a U.S. court denied their request to dismiss a lawsuit filed by Australian billionaire Andrew Forrest. Forrest, the founder of Fortescue Metals Group, discovered that scam ads on Facebook were using his image, causing significant financial losses for victims. After trying and failing to resolve the issue with Meta’s executives in 2019, Forrest sued the company in 2021.
This court decision is important because it challenges the usual legal protections for social media platforms. Normally, Section 230 of the Communications Decency Act shields these platforms from being held responsible for user-created content. However, Judge P. Casey Pitts ruled that this protection doesn’t apply here. Forrest argued that Meta’s AI tools actually helped create and spread the scam ads. The judge agreed there’s a real question about whether Meta’s ad systems were just neutral tools or if they played an active role in promoting the illegal content.
This ruling not only keeps Meta in legal hot water but also questions the extent of protection Section 230 offers tech companies. The case could set a precedent for holding social media platforms more accountable for the content they promote, especially when advanced tools like AI are involved in the ad optimization process.
Solana Pay on Shopify: The Future of Payments?
Solana Pay, a decentralized payment system created by Solana Labs, is now available on Shopify as a plug-in. This means millions of businesses using Shopify can accept payments through Solana Pay. Several crypto-focused brands, including Helius, Mad Lads, and MonkeDAO, have already started using Solana Pay on their Shopify stores.
As of now, merchants can only accept payments in USDC and the system works with popular Solana wallets like Phantom, Solflare, and Glow.
Launched in February 2022, Solana Pay runs on the Solana blockchain, which is known for its fast transactions and very low fees. While traditional credit card fees range from 1.5% to 3.5%, Solana Pay’s average fee is just $0.00025. This makes it a cost-effective option for businesses.
Shopify, which commands 10% of total U.S. e-commerce and contributes $444 billion to the global economy, adopting Solana Pay highlights a move towards DeFi and blockchain in everyday commerce. This integration could be the first step in revolutionizing payment processing, setting a new standard for crypto transactions in the future.
Ethereum Spot ETF Coming This Summer (Most Likely)
Good news for crypto investors: an Ethereum spot ETF could be coming this summer. SEC Chair Gary Gensler announced that the final approval for Ether (ETH) exchange-traded funds (ETFs) is expected by September 2024. He mentioned this during a Senate budget hearing, explaining that the details are being finalized.
Earlier this year, in January 2024, the SEC approved the first 11 Bitcoin spot ETFs in the United States. These ETFs allow investors to buy funds that hold actual bitcoin. The Ethereum spot ETFs will work the same way, letting more people invest in ETH through regular financial markets.
But the rules around crypto are still tricky. When asked if ETH is a commodity, Gensler didn’t give a clear answer, keeping the SEC’s stance unclear. However, the Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam said he considers ETH a commodity. This is important because it decides which agency regulates ETH. The SEC regulates securities, while the CFTC handles commodities. As of now, the answer to whether Ethereum is a security or not is unclear
The approval of an Ethereum spot ETF could be a big deal, giving investors new ways to buy ETH and potentially making it more accessible for traditional investors.