Headlines
▌Arweave AO: AO Token Minting Launched, Users Can Earn AO by Holding AR
Arweave AO announced on Twitter that AO token minting has been launched, with AR holders starting to receive AO. Until the cross-chain bridge rewards begin on June 18, 100% of the minted AO tokens will be awarded to AR token holders. After the cross-chain bridge rewards start, 1/3 of the AO tokens will be distributed proportionally to AR holders, while 2/3 will go to users who cross-chain assets to AO. Users can deposit stETH to earn token rewards, with more assets to be supported in the future. The AO tokens will remain locked until about 15% of the supply has been minted, which is expected to happen around February 8, 2025.
▌US Judge Approves $4.5 Billion Settlement Agreement Between Terraform and SEC
US District Judge Jed Rakoff has approved the $4.5 billion settlement agreement between Terraform Labs and its founder Do Kwon with the US Securities and Exchange Commission (SEC). As per the agreement, Terraform and Kwon will pay a total of $44.7 billion in fines and penalties and will be essentially banned from entering the crypto industry. Terraform will pay $36 billion in forfeiture fines, $4.2 billion in civil fines, and nearly $4.67 billion in pre-judgment interest. Kwon is currently detained in Montenegro after being imprisoned for four months for attempting to leave the country with a fake passport. The Montenegrin court is deciding on extradition requests from the US and South Korea, where he faces criminal charges.
Market Update
As of the time of writing, according to Coingecko data:
BTC recently traded at $66,770.97, with a 2.2% intraday change;
ETH recently traded at $3,466.89, with a 2.6% intraday change;
BNB recently traded at $599.22, with a 3.3% intraday change;
SOL recently traded at $147.24, with a 5.1% intraday change;
DOGE recently traded at $0.141, with a 3.5% intraday change;
XPR recently traded at $0.4767, with a 3.0% intraday change.
Policy
▌Ripple Cites Terraform Settlement as Basis to Request Reduction of SEC’s $20 Billion Fine Proposal
Ripple Labs’ lawyers are seeking to use the recent fine imposed on Terraform Labs to argue for lower fines in their case with the US Securities and Exchange Commission (SEC). Ripple has been engaged in a lengthy legal battle with the SEC over the past few years, and in a supplemental authority notice on Thursday, the company stated that the financial penalties proposed by the regulator are unreasonable. Ripple believes that its fine should be closer to $10 million. Terraform agreed to pay a $4.7 billion fine, and a judge later approved the settlement agreement. Ripple’s lawyers stated, “The civil penalties sought by the SEC in the Terraform case demonstrate the unreasonableness of the civil penalties sought in this case.” They pointed out that in similar (or even more severe) cases, the SEC has agreed to civil penalties ranging from 0.6% to 1.8% of the defendant’s total revenue, a pattern that Terraform follows.
▌Swiss Financial Market Supervisory Authority Shuts Down Crypto Bank FlowBank and Initiates Bankruptcy Proceedings
The Swiss Financial Market Supervisory Authority (FINMA) has decided to shut down FlowBank, a Swiss online bank that provides cryptocurrency services to its customers. FINMA stated that the bank no longer has sufficient capital to sustain its banking operations, and there are legitimate concerns about the bank’s current excessive debt and lack of prospects for restructuring. Swiss law firm Walder Wyss has been appointed by FINMA as the bankruptcy liquidator for the bank.
▌UK Advances to Secure Global Leadership in Financial Technology and Digital Assets
The cryptocurrency advocacy group Stand with Crypto (SwC) has been launched in London, coinciding with Prime Minister Rishi Sunak’s announcement of the general election. SwC has put forward a series of proposals aimed at making the UK a global hub for financial technology, digital assets, and tokenization. The proposals include promoting the UK as a center for Web3 and tokenization, establishing a regulatory framework for crypto assets, providing clarity on custody regulation, promoting the advantages of decentralization, developing a cross-government blockchain strategy, formulating a tokenization strategy for the City of London, and updating the legal framework for digital assets. These measures are intended to attract investment, foster innovation, and drive the growth of the UK’s digital economy.
▌US SEC Chairman: CFTC Lacks Sufficient Disclosure Mechanisms
According to Fox reporter Eleanor Terrett, during a budget hearing on Thursday, Senator Durbin asked US Securities and Exchange Commission (SEC) Chairman Gary Gensler whether he believes the Commodity Futures Trading Commission (CFTC) has enough resources to regulate cryptocurrencies. Gensler stated that “it depends on what resources they have. The CFTC has not yet established the kind of disclosure system that the SEC has.”
▌Biden Nominates CFTC Commissioner for Senior Positions at FDIC and Treasury Department
According to a statement released by the White House on Thursday, US President Joe Biden announced the nomination of Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero to lead the Federal Deposit Insurance Corporation (FDIC), and CFTC Commissioner Kristin Johnson to serve as Assistant Secretary for Financial Institutions at the Treasury Department. Both Democratic CFTC Commissioners have advocated for the agency to issue rules or guidelines to protect consumers and address conflicts of interest in the cryptocurrency sector. Romero has warned of “contagion risks” in the cryptocurrency market and compared the industry to the 2008 financial crisis. Romero also sponsored the CFTC’s Technology Advisory Committee, which earlier this year voted to submit a report to the commission calling for government and industry efforts to understand decentralized finance. Kristin Johnson previously stated last year that the CFTC should “immediately establish regulatory rules regarding asset custody.” The Biden administration is pushing for the first nomination hearing to begin the week of July 8th.
▌US Senator Questions CFTC’s Ability to Regulate Cryptocurrencies After FIT21 Passage
US Democratic Senator Dick Durbin of Illinois expressed concerns during a Senate Appropriations Subcommittee hearing on Thursday that the responsibilities given to the Commodity Futures Trading Commission (CFTC) after the passage of the FIT21 Act in the House of Representatives far exceed their capabilities. Durbin asked CFTC Chairman Rostin Behnam during the hearing, “What makes you think that the CFTC can enter this rapidly changing, massive world and become an effective regulator?” Behnam stated that there are loopholes in the regulation of “non-securities commodity tokens,” and the CFTC is doing well in enforcing actions against entities involved in cryptocurrencies.
▌US Congressman: SEC’s Cryptocurrency Measures Still Have Many Uncertainties and Ambiguities
According to FOX Business reporter Eleanor Terrett on X platform, US Senator Bill Hagerty stated that he will push the US Securities and Exchange Commission (SEC) to focus on clarity in cryptocurrency regulation, as the industry needs an appropriate ecosystem… otherwise it will push crypto to regions outside the US. However, US Securities and Exchange Commission Chairman Gary Gensler countered, saying that violating the law and not liking the law with lack of clarity are different. Bill Hagerty noted that the SEC’s actions in the crypto space still have many uncertainties and ambiguities, but “there’s no need for that.”
▌US Congressman Thomas Massie Inspired by Bitcoin to Introduce a Bill to Abolish the Federal Reserve
According to Bitcoin Magazine, US Congressman Thomas Massie stated that after reading the book “The Bitcoin Standard,” he decided to introduce a bill to abolish the Federal Reserve.
Blockchain Applications
▌Graph Foundation Completes Sunrise Plan, The Graph Transitions to Fully Decentralized Data Layer
The Graph Foundation has completed the Sunrise Plan, marking the transition of the blockchain data indexing and querying protocol The Graph to a fully decentralized data layer. The Sunrise plan consisted of three phases transitioning from centralized hosting services to a global distributed network of individuals incentivized with tokens and independent companies serving as data indexers. The Graph introduced subgraphs in 2018 to index Ethereum but has now indexed over 55 chains, including Optimism, Base, Arbitrum, Avalanche, NEAR, and Cosmos.
▌Zapper Announces Launch of Zapper Protocol
DeFi asset management platform Zapper announced the launch of Zapper Protocol on social media platforms. The vision is to achieve Onchain Literacy and will introduce the ZAP token in the fourth quarter, with more details to be revealed later.
Cryptocurrency
▌Bloomberg ETF Analyst: Previous Prediction of Approval for Spot Ethereum ETF S-1 Around July 4th May be Delayed
Bloomberg analyst Eric Balchunas stated on X platform that “the issuers are still waiting for comments from the SEC’s corporate and finance departments on their S-1 filings submitted two weeks ago, which is the first time these departments are reviewing these documents. Why? Likely because (most likely) a last-minute political shift caught them off guard. It’s unclear if they prioritize this work, which may require delaying my previous prediction of approval for the Spot Ethereum ETF S-1 around July 4th.”
Previously, SEC Chairman mentioned during a hearing that the filing might be approved this summer but did not specify a specific date.
▌AO Reveals Token Economics: 36% Allocated to AR Holders, 64% Allocated to Cross-Chain Users
The AO project disclosed its token economics, with 100% of the tokens being distributed to the community, where 36% goes to AR holders and 64% goes to cross-chain users. The AO token mimics Bitcoin, with a total supply of 21 million tokens that halve every four years. The smallest unit of AO token is called ARMSTRONG, named after Joe Armstrong, the co-inventor of Erlang and a major inspiration for the AO architecture. ARMSTRONG is similar to Bitcoin’s smallest unit, SATOSHI.
Currently, there are 1 million AO tokens in existence, with AO token minting launched and AR holders starting to receive AO. Before the cross-chain bridge rewards start, 100% of the AO tokens will be awarded to AR token holders.
Yesterday, AO announced that all the details of AO token economics would be revealed on June 13, with 125 users invited to participate in a live event.
▌Holograph Team Fixes Vulnerability and Collaborates with Multiple Exchanges to Block Malicious Accounts
After the native token HLG of the Holograph protocol experienced a malicious attack resulting in the minting of an additional 10 billion HLG tokens and a subsequent price drop of over 60%, the Holograph team has fixed the vulnerability. They are currently working with multiple exchanges to block accounts associated with malicious activities. The wallet address acc01ade.eth involved in the exploit, whose GitHub page shows contributions to the Holograph project, is under further investigation by the team and in contact with law enforcement.
Important Economic Dynamics
▌Probability of the Fed Maintaining Interest Rates Unchanged in August at 87.6%
According to CME’s “Fed Watch,” the probability of the Fed keeping interest rates unchanged in August is 87.6%, while the probability of a 25 basis point rate cut is 12.4%. For September, the probability of the Fed keeping interest rates unchanged is 29.8%, with a cumulative probability of a 25 basis point rate cut at 62.0% and a cumulative probability of a 50 basis point rate cut at 8.2%.
▌Nasdaq and S&P 500 Indices Set New Historical Closing Highs for Four Consecutive Trading Days
The three major US stock indices closed with mixed results, with the Nasdaq up by 0.34%, the S&P 500 up by 0.23%, and the Dow down by 0.17%. Both the Nasdaq and S&P 500 indices have set new historical closing highs for four consecutive trading days. Large-cap tech stocks saw mixed performance, with NVIDIA up over 3%, Tesla up over 2%, Apple, Microsoft, and Netflix posting slight gains, while Amazon and Google dropped over 1% and Meta slightly declined. Apple closed with a total market value of $3.29 trillion, surpassing Microsoft’s $3.28 trillion, reclaiming the top spot in the US stock market. Apple, NVIDIA, and Microsoft all continued to set new closing highs.
Golden Encyclopedia
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What are Validiums?
Validiums are a Layer 2 scaling solution designed to optimize Ethereum’s performance by processing transactions off-chain. Validiums are responsible for processing the majority of transactions off-chain and sending concise proofs to the main network for verification to reduce the load on the Ethereum blockchain. The off-chain transaction processing method significantly improves throughput and reduces mainnet congestion, resulting in a more efficient and cost-effective Ethereum experience.
