SEC - Page 114

Donald Trump is gaining favor as the pro-innovation candidate among key cryptocurrency and traditional finance (TradFi) players.

Cathie Wood, CEO of ARK Invest, is the latest high-profile investor to endorse Trump for the 2024 U.S. presidential election, stating she will vote for “who’s going to do the best job for our economy.”

Wood’s endorsement may further solidify Trump’s image as a “pro-growth and pro-business” candidate. Bitfinex analysts told Cointelegraph that Wood argues Trump’s economic policies, which emphasize reducing regulations and taxes, foster innovation and technological advancement.

She believes Trump’s policies will create a favorable environment for disruptive technologies to thrive, which is crucial for long-term economic growth.

Despite later requesting the removal of the interview due to a lack of nuance in her political views, Wood’s comments stand as a strong endorsement given her reputation as a leading tech investor.

Further bolstering Trump’s support in the crypto community, Gemini co-founders Cameron and Tyler Winklevoss have each pledged $1 million in Bitcoin towards Trump’s reelection.

In June 20 X posts, the Winklevoss twins declared their support for Trump, describing him as “pro-Bitcoin” and “pro-crypto,” while criticizing President Joe Biden for declaring “war against crypto” during his tenure.

The Winklevoss twins’ donation is seen as a significant endorsement within the crypto industry.

Bitfinex analysts noted, “This move signifies a growing perception of Trump as a pro-innovation candidate within the crypto and TradFi communities.”

However, part of the donation was returned as it exceeded the federal limit of $844,600 per individual. It remains unclear whether the excess amount was returned in Bitcoin or cash.

On May 21, Trump announced that his 2024 campaign would accept cryptocurrency donations, signaling a shift towards a more favorable stance on digital assets.

Bitfinex analysts suggest this alignment with crypto-friendly policies positions Trump as a preferred candidate for those advocating for regulatory clarity and support for blockchain technology and cryptocurrencies. Trump has even proclaimed himself the “Crypto President.”

READ MORE: Bitcoin and Ether Transaction Fees Plunge Amidst Crypto Market Turmoil

Trump’s potential reelection could usher in a more innovation-friendly era for the U.S. crypto industry, boosting mainstream adoption.

Bitfinex analysts speculate that a Trump administration might create a clear and supportive regulatory framework, encouraging innovation and investment in the crypto sector, potentially leading to increased adoption of digital assets and integration of cryptocurrencies into the financial system.

Jason Allegrante, chief legal and compliance officer of Fireblocks, emphasized that blockchain technology transcends political parties.

He told Cointelegraph, “What’s remarkable about the industry’s positioning in this election cycle is that it will continue to prioritize the cause of innovation first and foremost even as it wades back into electoral politics.

“Republicans may benefit more this November simply because many already seem to understand the issues.”

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MakerDAO, a pioneering decentralized finance (DeFi) lending protocol and the creator of the stablecoin DAI, has announced a groundbreaking $1.35 million audit contest. This is the largest audit contest ever conducted in the DeFi space.

The contest will take place on the Sherlock Platform, a Web3 audit contest provider, and is an integral part of MakerDAO’s Endgame project, which is slated to begin in summer 2024.

Starting on July 8 and running until August 5, the contest aims to engage top security experts and new researchers to uncover potential vulnerabilities.

Endgame represents the final development stage in MakerDAO’s strategic plan. Its goal is to reform governance to achieve a self-sustaining balance, known as the Endgame State.

Rune Christensen, co-founder of MakerDAO, emphasized the importance of robust security for the Endgame launch:

“Rock solid security has always been a priority for MakerDAO. Over time, it’s become one of the defining features of the project.

“It only makes sense that the team would work with the market leader, Sherlock, to create a program to pressure test the system we’re building as Maker moves toward Endgame.”

A MakerDAO spokesperson, in a written Q&A with Cointelegraph, highlighted the rigorous security measures already in place:

“The Endgame products and features […] have been audited numerous times by multiple reputable auditing firms.

READ MORE: TON Blockchain Faces Rising Phishing Threats Amid Explosive 2024 Growth, Experts Warn

The audit contest is an additional way to test the system. It underscores Maker’s commitment to open source and security while giving integrators and builders a chance to get familiar with Endgame before it gets launched.”

Jack Sanford, co-founder of Sherlock, acknowledged MakerDAO’s dedication to security with this record-breaking contest. He elaborated on the contest’s setup:

“Sherlock has reserved some of the top security experts in the world for this contest, but many up-and-comers will undoubtedly make a name for themselves and show a strong performance in this historic contest.”

The decision to host the contest on Sherlock was strategic, as the MakerDAO spokesperson explained:

“Sherlock is a pioneer in auditing contests for crypto projects and they have a deep network of reputable security researchers. It only makes sense that Maker would seek to work with the best in the space.”

Before the contest begins, the top MakerDAO bug bounty hunters will provide an educational breakdown during the week of July 1.

This will include a code walkthrough with the MakerDAO team and “crypto legends.”

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The Open Network (TON), a blockchain platform linked to Telegram, is facing increased phishing attacks, according to a blockchain security expert.

The founder of SlowMist, a blockchain security firm, has highlighted the surge in phishing activities targeting the TON ecosystem, which includes various decentralized applications (DApps) and tokens.

“There are more and more phishing activities in the TON ecosystem,” SlowMist founder Yu Xian wrote in an X post on June 23.

Xian explained that the vulnerabilities within the TON ecosystem stem from scammers’ easy access to message groups, where they disseminate phishing links.

He stated, “The Telegram ecosystem is too free, and many phishing links — or bot forms — are spread through message groups, airdrops, and other deceptive methods to lure away users’ TON wallets in batches.”

Users on Telegram who use anonymous numbers are particularly vulnerable.

These anonymous numbers, which are not tied to SIM cards, were introduced on Telegram in late 2022, allowing users to log in using blockchain-based anonymous numbers available on platforms like Fragment.

“If these are phished away, it means that the corresponding Telegram account may also be lost, unless the user has enabled an independent password, or two-step verification,” Xian noted.

The surge in phishing attacks coincides with significant growth in the TON ecosystem.

The total value locked (TVL) in TON projects has increased by 4,500% in 2024, reaching $648 million, according to DefiLlama data.

READ MORE: Binance Aids BtcTurk in Cyber Attack Investigation, Freezes $5 Million in Stolen Funds

The TON ecosystem now hosts 43 tokens with a combined market capitalization of $19.2 billion, as per Bitget data.

A notable driver of this growth is TON’s native cryptocurrency, Toncoin (TON), and the play-to-earn token Notcoin (NOT), which have gained popularity among Telegram users.

Clicker games and tokens like Notcoin have become significant contributors to the ecosystem’s expansion in 2024.

Amid this rapid growth, security experts have repeatedly warned about the increasing risk of phishing and scam attacks.

In April, cybersecurity firm Kaspersky alerted the public to a major scam targeting TON ecosystem users.

This scam involves unofficial Telegram bots that steal users’ coins by linking their Wallet, a third-party cryptocurrency wallet on Telegram, to the bot system.

Cointelegraph reached out to the TON Foundation for comments on the rising phishing attacks but did not receive a response at the time of publication.

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Ether could drop to as low as $2,400 following the launch of spot Ether exchange-traded funds (ETFs), according to Andrew Kang, founder and partner at crypto-focused venture capital firm Mechanism Capital.

As per CoinGecko, Ether is currently trading at $3,410. A fall to $2,400 would represent a nearly 30% decrease from its current price.

In a June 23 X post, Kang noted that, unlike Bitcoin, Ether attracts less institutional interest, there are few incentives to convert spot Ether into ETF form, and the network cash flows have been underwhelming.

“How much upside would an ETH ETF Provide? I would argue not much,” Kang said.

The projected price drop would be significant for the asset, especially since Ether had previously surpassed $4,000 in March when Bitcoin reached a new all-time high.

It nearly hit the same level again just before the United States Securities and Exchange Commission (SEC) approved Ether ETFs.

Kang predicts that spot Ether ETFs will attract only 15% of the flows that spot Bitcoin ETFs have seen.

Bloomberg ETF analysts Eric Balchunas and James Seyffart estimate these flows to be in the 10-20% range.

Kang pointed out that only $5 billion in new funds, excluding converted funds, flowed into spot Bitcoin ETFs in the first six months.

Applying this data to Ethereum suggests that spot Ether ETFs could see $840 million in “true” inflows over the same period.

“I believe that the expectations of crypto natives are overinflated and disconnected from the true preferences of tradfi allocators,” Kang said. “This implies that the ETF is more than priced in.”

READ MORE: Binance Aids BtcTurk in Cyber Attack Investigation, Freezes $5 Million in Stolen Funds

However, not everyone agrees with Kang’s prediction. Industry analyst Patrick Scott (widely known as Dynamo DeFi) told Cointelegraph Magazine that he “expects a similar directional movement” to how the spot Bitcoin ETFs have performed, though he doesn’t foresee Ether’s price doubling.

VanEck, an asset management firm, believes spot Ether ETFs could help drive Ether to $22,000 by 2030.

Kang argued that Ethereum’s appeal as a decentralized financial settlement layer or Web3 app store is less convincing when considering the data.

He noted that Ethereum’s promising future as a cash flow “machine” has waned since fees were driven up by decentralized finance and the last non-fungible token cycle.

“At $1.5B 30d annualized revenue, a 300x PS ratio, negative earnings/PE ratio after inflation, how will analysts justify this price to their daddy’s family office or their macro fund boss?” Kang questioned.

The surprise approval of Ether ETFs means issuers have less time to market to institutional investors. Bitwise and VanEck are among the few approved applicants that have already released Ethereum-themed ads.

Kang also mentioned that the removal of staking from proposed spot Ether ETFs might deter investors from converting their spot Ether into ETF form.

While institutions like BlackRock are venturing into the real-world asset tokenization space on Ethereum, Kang is unsure of its impact on Ether’s price.

He predicts the ETH/BTC price ratio could drop from 0.054 to as low as 0.035 in the next 12 months.

However, he believes a Bitcoin rally to $100,000 in the next six to nine months could “drag” Ether to a new all-time high.

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