Farcaster raises $150 million, Ethereum ETF applicant files 19b-4

Headline

▌Decentralized social protocol Farcaster completes $150 million in financing

Decentralized social protocol Farcaster announced that it has completed $150 million in financing, led by Paradigm, with participation from a16z crypto, Haun, USV, Variant, Standard Crypto, etc. The announcement stated that this year will focus on the growth of daily active users and adding developer primitives to the protocol, such as channels and direct messaging.  

As previously reported, in March this year, people familiar with the matter revealed that Farcaster developer Merkle Manufactory was about to complete a round of financing led by Paradigm, with a valuation of approximately $1 billion.

▌Six spot Ethereum ETF applicants have submitted revised 19b-4 documents

So far, six spot Ethereum ETF applicants have submitted revised 19b-4 documents, including VanEck, Fidelity, Franklin, Ark Invest, Grayscale, and Invesco Galaxy.

Previously, it was reported in the early morning of May 21 that the US SEC required the accelerated update of the 19b-4 documents for the spot Ethereum ETF.

Market

As of press time, according to Coingecko data:

BTC's latest transaction price is $70194.64, with a daily increase or decrease of -1.7%;

ETH's latest transaction price is $3791.31, with a daily increase or decrease of +3.7%;

BNB's latest transaction price is $618.98, with a daily increase or decrease of +3.0%;

SOL's latest transaction price is $178.24, with a daily increase or decrease of -4.3%；

DOGE's latest transaction price is $0.1708, with a daily increase or decrease of +3.4%；

XPR's latest transaction price is $0.5370, with a daily increase or decrease of +0.0%。

Policy

▌Several U.S. House of Representatives Democrats petitioned their colleagues to support the cryptocurrency bill

The U.S. House of Representatives will vote on the 21st Century Financial Innovation and Technology Act (FIT21) on Wednesday, which is expected to receive bipartisan support. Eight Democratic lawmakers, including Wiley Nickel, Yadira Caraveo, Jim Himes, Jasmine Crockett, Ritchie Torres, Darren Soto, Josh Gottheimer and Don Davis, are pushing their colleagues to support the bill, seeing it as an important opportunity to regulate the digital asset market. FIT21 aims to establish a clear regulatory framework for digital assets in the United States, including consumer protection, disclosure regulations and issues regarding the use of cryptocurrencies in illicit finance. It is the first comprehensive cryptocurrency legislation to reach a final vote in Congress. The U.S. House of Representatives' upcoming FIT21 vote will "prevent the next FTX incident" from happening The U.S. House of Representatives will vote on the 21st Century Financial Innovation and Technology Act (FIT21) on May 22, a bill that aims to clarify the regulatory responsibilities of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission for cryptocurrencies. North Carolina Rep. Wiley Nickel called on bipartisan lawmakers to support the bill to "prevent the next FTX incident" from happening. He stressed that current cryptocurrency regulation relies on securities laws from a century ago, and that the FIT21 bill was drafted with bipartisan cooperation. The bill will limit the SEC's power to regulate through law enforcement, and lawsuits against several crypto companies such as Ripple, Kraken, Coinbase and Binance have also been widely criticized. Congressman Nickel said the SEC is politicizing cryptocurrency regulation and forcing President Joe Biden to take sides on this important issue. The House Rules Committee will discuss the FIT21 bill on May 21, and a full vote is expected the next day. Previously, the House and Senate passed a cryptocurrency-related bill to overturn SEC regulations, but President Biden has indicated that he intends to veto the resolution.

▌Sources: Disagreement within the U.S. SEC indicates that the shift to spot Ethereum ETFs is "completely political"

According to sources, on Monday, the U.S. Securities and Exchange Commission (SEC) Trading and Markets Division informed exchanges that they would approve 19b-4 this week, changing their position two weeks ago. Sources said that the issuer responsible for S-1 contacted the SEC, but the reviewers in the SEC's corporate finance department seemed to disagree with the agency's trading and market department.  

It is worth noting that the SEC's trading and market department is responsible for reviewing 19b-4s, while the agency's corporate finance department is responsible for S-1s. "They haven't even coordinated internally, which is why this is likely a political decision," said a person familiar with the matter. Sources said they would not be surprised if this became a campaign issue. "What they did at the SEC is equivalent to writing a term paper the night before the deadline," the source said of the agency's work to retract its 19b-4s comments.

▌Uniswap Labs urges the US SEC to abandon the pending enforcement action in the Wells Notice

Uniswap Labs received a Wells Notice in April, which accused the Uniswap protocol of being an unregistered securities exchange and the interface and wallet of being an unregistered securities broker. In its response to the SEC's Wells Notice, Uniswap Labs refuted the claim, arguing that the protocol did not meet the definition of an exchange and was therefore not subject to SEC regulation. Although Uniswap Labs said that the protocol was invented by them, it is now a "passive" technology that people use to trade cryptocurrencies. Martin Ammori, chief legal officer of Uniswap Labs, told reporters on Tuesday that the SEC must redefine the definition of an exchange before it can have jurisdiction over Uniswap. Under the current definition, Uniswap must be designed specifically for securities trading. Uniswap is general purpose and most of its trading volume is clearly non-securities, such as Ethereum, Bitcoin and stablecoins. Bitcoin, Ethereum and stablecoins account for 65% of the protocol's trading volume.

▌Variant Fund Chief Legal Officer: If the SEC approves the Ethereum spot ETF, it means that it recognizes that non-pledged ETH is not a security

Van Buren Capital partner and financial lawyer Scott Johnsson posted on the X platform that the relevant application documents show that the Ethereum spot ETF will still be listed under the "commodity-based trust share" rules. Variant Fund Chief Legal Officer Jake Chervinsky said that this means that if the US SEC approves the Ethereum spot ETF, it will have to recognize that non-pledged ETH is not a security. This will be a major policy move by the SEC, which has previously refused to recognize any assets other than Bitcoin as non-securities commodities.

Blockchain Applications

▌Sui Foundation announces successful deployment of Mysticeti testnet

Sui Foundation announces successful deployment of Mysticeti testnet, a new consensus protocol that the team says reduces consensus time on Sui by 80% to 390 milliseconds, making it the fastest consensus layer in the industry: Mysticeti was developed following in-depth research into Byzantine Fault Tolerant (BFT) consensus mechanisms and represents an advancement of Narwhal-Bullshark, the consensus algorithm Sui launched in its mainnet. This enhancement optimizes resource usage, reduces complexity for developers, and allows the Sui network to process tens of thousands of transactions per second with latency well below one second.

▌Diamond Standard Launches Alternative Blockchain Payment System Called CARATS

To sidestep the regulatory challenges faced by many centralized exchanges and payment services, Diamond Standard has launched an alternative blockchain payment system called CARATS. Unlike traditional centralized exchanges and payment services, CARATS uses tokenized diamonds backed by real-world commodities to facilitate payments, remittances, and wealth transfers between users. Individuals can purchase all or part of the tokenized diamonds, trade, transfer, exchange for local fiat currency, or choose to redeem the tokens for delivery of physical diamonds. Diamond Standard does this by minting physical coins and bars studded with actual diamonds, as well as an integrated chip that can audit the diamonds and broadcast a tokenized version of the asset on the blockchain.

Cryptocurrency

▌VanEck Spot Ethereum ETF has been listed on the DTCC

VanEck Spot Ethereum ETF has been listed on the DTCC website with the symbol ETHV.

▌Biden's campaign team may accept cryptocurrency donations

According to Bitcoin Magazine, Joe Biden's campaign team asked for donations, saying that they were "out-donated" by "cryptocurrency executives" who supported Donald Trump.

Earlier today, Trump began accepting Bitcoin and cryptocurrencies as campaign donations.

▌Hackers have returned Gala nearly $23 million worth of ETH

According to on-chain records and Gala's Discord server statement, hackers have returned Gala's ETH tokens worth nearly $23 million.

▌81,840 ETH flowed into exchanges on May 21, the highest since January 23

Ethereum (ETH) holders are sending assets to cryptocurrency exchanges at the fastest rate in nearly four months as expectations grow for the approval of spot exchange-traded funds in the United States. Nansen Intelligence blockchain data shows that net inflows to exchanges reached 81,840 ETH on May 21, worth about $306 million at current prices, the highest single-day amount since January 23.

▌Standard Chartered Bank executive: Bitcoin is expected to hit a record high over the weekend

Geoff Kendrick, head of foreign exchange research and digital asset research at Standard Chartered Bank, said that Bitcoin is expected to hit a new record high by the weekend, exceeding the $73,798 level on March 14. Kendrick added that he is more confident about the Bitcoin price target of $150,000 by the end of 2024 and $200,000 by the end of 2025.

▌Fox Business reporter: CoinShares and Valkyrie will not apply for spot Ethereum ETF

According to Fox Business reporter Eleanor Terrett's disclosure on the X platform, spot Bitcoin ETF issuers CoinShares and Valkyrie have stated that they will not apply for spot Ethereum ETFs, mainly because spot Ethereum ETFs cannot participate in staking. According to sources, if there is no staking function, the two digital asset investment companies believe that the spot Ethereum ETF has no value for investors, especially since there are already 9 spot Bitcoin ETFs on the market, which is already too crowded.

Important Economic Dynamics

▌The three major U.S. stock indexes closed up collectively

The three major U.S. stock indexes closed up collectively, with the Dow Jones Industrial Average up 0.17%, the Nasdaq up 0.22%, and the S&P 500 up 0.25%, with most popular technology stocks rising.

▌Federal Reserve Board Governor Waller: May consider cutting interest rates at the end of this year

Federal Reserve Board Governor Waller said that policies must keep inflation down; we are beginning to see that policies put downward pressure on demand; monetary policy is already tight enough; based on the data, we don’t seem to need to raise interest rates; if the data supports it, we may consider cutting interest rates at the end of this year.

Golden Encyclopedia

▌What is a reentrancy attack in a smart contract?

In a smart contract, a reentrancy attack occurs when a contract calls another contract or function from the outside before completing its own state change. This allows the called contract to reenter the calling contract and potentially execute some of its operations again, which can lead to unforeseen and frequent malicious behavior. For example, contract A calls contract B to send funds and then modifies its own state. Contract B's code may contain a callback function that allows it to reenter contract A and potentially re-execute the transfer function before contract A completes its state change. This would allow an attacker to obtain funds from the contract multiple times before completing the initial transaction.

Disclaimer: As a blockchain information platform, Golden Finance publishes articles for information reference only and is not intended as actual investment advice. Please establish a correct investment concept and be sure to raise risk awareness.