KEYTAKEAWAYS
- SEC likely to approve Ethereum spot ETFs this summer; registration statements need to be effective before trading.
- Holograph ($HLG) suffers 80% drop after security breach; hacker mints 1 billion tokens.
- Terraform Labs and Do Kwon reach $4.5 billion settlement with SEC, permanently banned from crypto asset securities trading.
CONTENT
In the Crypto Pre-drink, we serve up a daily shot of the hottest crypto news and market insights to fuel your investment decisions.
ETHEREUM SPOT ETF APPROVAL EXPECTED THIS SUMMER
SEC’s Progress on Ethereum Spot ETF
The U.S. Securities and Exchange Commission (SEC) is set to approve Ethereum spot ETFs this summer. SEC Chairman Gary Gensler noted that issuers are finalizing the process, with approvals likely “sometime this summer.” The SEC recently approved eight Ethereum spot ETFs, but their S-1 registration statements need to be effective before trading, which may take a few weeks.
Regulatory Challenges
Senator Bill Hagerty criticized Gensler’s approach, arguing it drives U.S. crypto businesses overseas. He emphasized the need for constructive regulations. Rob Marrocco, VP at Cboe, called for a comprehensive regulatory framework to facilitate the listing of crypto ETFs.
HOLOGRAPH TOKEN PLUMMETS AMID SECURITY BREACH
Holograph Faces Major Hack
Holograph ($HLG), a cross-chain blockchain project, saw an 80% token drop due to a security breach. Hackers exploited a vulnerability, minting 1 billion $HLG tokens. The company patched the loophole and is working with exchanges and law enforcement.
The Holograph Operator contract has been exploited by a malicious actor, enabling the hacker to mint 1 billion additional HLG
The team has patched the initial exploit & is working with exchange partners to lock the malicious accounts
The team has launched an investigation & is…
— Holograph (@holographxyz) June 13, 2024
Suspected Insider Involvement
The hacker, identified as acc01ade.eth, is a project contributor. Researcher Matt Casto suggests the culprit is a rogue developer. Post-attack, the hacker converted $HLG to $USDT. Holograph’s price has since recovered slightly, trading at $0.007414 with a market cap of $11.74 million.
TERRAFORM LABS AND DO KWON REACH $4.5B SETTLEMENT
Massive Settlement with SEC
A U.S. District Court approved a $4.5 billion settlement between the SEC, Terraform Labs, and its former CEO, Do Kwon. The settlement includes disgorgement and civil penalties, along with a permanent ban from buying and selling all crypto asset securities, including Terra tokens. This follows a jury finding them liable for fraud related to the $40 billion Terra collapse in May 2022.
Implications
SEC Chair Gary Gensler highlighted this case as affirming that the economic realities of a product determine its status under securities laws. Kwon remains in custody in Montenegro, awaiting extradition. Terraform Labs, under Chapter 11 bankruptcy, holds around $150 million in assets, raising questions about covering the fines. The settlement is binding and non-appealable.
