Decentralized Diaries for the Week of 12/19/23


A (crypto) house divided against itself cannot stand.

  • The CFTC and SEC are going in opposite directions.
  • Then again, Rostin Benham said he and Gary Gensler relate on friendly terms (sigh).
  • That said, Tether is the new law enforcement darling.
  • Hackers released a malicious version of Ledger’s software (read on to find out).
  • For whatever it is worth, crypto losses dropped 50% from last year.
  • Also, Goldman Sachs thinks 2023 was an “it” year for crypto (institutionally speaking).

What is next? Who knows?

These are your decentralized diaries!

Bitcoin is Ranging at $44k with the Altcoins in Tow

From a $43,429.78 high, Bitcoin hit a $40,530.26 low and currently ranges at $41,534.97 (as of 12/18/23).

The altcoins also seem to be in the gray zone too.

Ethereum (ETH) is currently at $2,164.00, Avalanche (AVAX) at $39.31, Polkadot (DOT) at $6.65, Chainlink (LINK) at $14.20, and Solana (SOL) at $71.79.

The SEC Denied Coinbase‘s Petition for New Crypto Rules

On Friday, the SEC voted 3-2 against a Coinbase petition for customized rules for the digital asset industry.

In a December 15 statement, Gary Gensler said, “In my opinion, the existing securities regime appropriately governs crypto asset securities.”

Coinbase indicated it was heading to the courts to challenge the decision.

Earlier in the year, the cryptocurrency exchange asked the courts to force the SEC to decide on the issue.

In a CNBC interview, the SEC chair said that the regulator was taking another look at the crypto ETF applications.

In related news, First Trust, the premier asset manager, filed for the first Bitcoin Buffer ETF to protect investors from market risks.

Also, Coinbase received regulatory approval from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) for its Project Diamond.

“Project Diamond” is a Coinbase program designed to enable institutions to issue native tokens.

The SEC will Inspect Binance.US’s Ecosystem

In the continuing legal drama, Binance.US, Changpeng Zhao, Binance Global, and the SEC submitted a joint status report that indicates an inspection of Binance.US’s infrastructure.

While the SEC has considered a virtual inspection, Binance.US proposed December 21, 7.00 pm Eastern.

CFTC: Several Crypto Tokens are Commodities Under Current Laws

According to Rostin Benham, many crypto tokens are commodities under American laws.

Speaking on CNBC’s Squawk Box, Benham said, “Congress is gonna have to step in and overcome this feeling of not wanting to legitimize the technology and seeing this as not something that is tenable or sustainable. I mean, it is here, it hasn’t gone away.”

Benham also indicated that he and SEC Chairman Gary Gensler have a cordial relationship and share a market protection mutual interest, despite diverging opinions.

Additionally, Bitnomial, a native crypto derivatives exchange, revealed it had received derivative, clearinghouse, and broker licenses from the CFTC.

The announcement makes Bitnomial the first digital asset institution to have comprehensive regulatory licensing in America.

Tether Confirmed its Cooperation with Law Enforcement Agencies

There are no more safe spaces for bad actors in the crypto space with new revelations from Tether, the stablecoin issuer.

In a publicly released letter to American legislators, Tether indicated cooperation with the Secret Service, the FBI, and the US Treasury Office of Foreign Assets and Controls (OFAC).

Additionally, Tether indicated that its collaborations resulted in the seizure and freezing of 436 wallets containing $435 million of USDT tokens.

In related news, US authorities seized $500,000 in funds linked to crypto “pig butchering” scams.

Pig butchering scams are fraudulent investment schemes designed to drain victims.

Malicious Code in Ledger‘s Software Libraries Led to Theft of $484k

Owners of Ledger hardware wallets and others in the DeFi community went into panic mode after the theft of $484,000.

Hackers targeted an employee in a phishing attack and released a malicious version of the Ledger Connect Kit. As soon as it was detected, projects across the space updated fixes.

The Connect Kit links several protocols and projects on the front end, including MetaMask, Coinbase, and Lido.

TRM Labs: Crypto Hacking Losses Dropped by 50% YoY in 2023

According to research from TRM Labs, a crypto research firm, losses due to hacks reduced this year.

TRM Labs said in its report that $1.7 billion was lost from 160 incidents this year, compared to $4 billion in 2022.

The firm identified improved security standards and practices as the reason behind the plunge.

Nirvana Finance Hacker Pled Guilty

Shakeeb Ahmed, a former security engineer, pled guilty to backing Nirvana Finance, a DeFi yield protocol alongside a yet-to-be-named decentralized exchange.

Ahmed will also forfeit over $12.3 million in stolen assets. Prosecutors indicated that the case was the first smart contract hacking conviction.

Goldman Sachs: The Crypto Markets Became Institutionalized in 2023

According to Goldman Sachs, 2023 has been an institutional year for crypto.

In its report, the investment behemoth indicated that the entrance of regulated centrally-cleared derivatives has changed the landscape.

The report identified derivatives markets such as CBOE, Coinbase Derivatives, Eurex, AsiaNext, and others as evidence.

Additionally, ETF approval anticipations enabled $1.9 billion in net inflows in Q4, 23.