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Why the DeFi Settlement Matters

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The US Securities and Exchange Commission (SEC) charged Rari Capital, a decentralized finance (DeFi) protocol, and its executives, citing actions misleading investors and operating as unregistered brokers.

The Wednesday settlement includes various forms of relief, a capped ban, and a cease-and-desist order subject to court approval.

SEC Charges DeFi Protocol Rari Capital

According to the filing, the regulator’s charges against the now defunct DeFi protocol stem from its actions misleading investors and operating as unregistered brokers. It claims Rari launched earn pools and fuse pools, two investment products that operated as cryptocurrency investment funds, with investors generating returns. At their peak, the products handled upwards of $1 billion in crypto assets.

The SEC claims Rari deceived investors on earning pool returns, saying that they would automatically rebalance assets into the best yield opportunities. While this often required manual intervention, Rari Capital often failed to initiate. Further, they promoted high annual percentage yields (APY) intended to lure investors without disclosing certain fees. Resultantly, some earn pool investors lost money.

Read more: Top 11 DeFi Protocols To Keep an Eye on in 2024

The charges extend to its co-founders, Jai Bhavnani, Jack Lipstone, and David Lucid. The regulator alleges that the three executives engaged in unregistered broker activities. Rari Capital Infrastructure LLC, which took control of the platform in 2022, is also cited for unregistered securities offerings and broker activities.

“We allege that Rari Capital and its co-founders misled investors about both the features and profitability of certain of the crypto asset investments Rari Capital offered, and acted as unregistered brokers. We will not be deterred by someone labeling a product as decentralized’ and autonomous. Instead, we will look beyond the labels to the economic realities, as we did here, and hold the individuals behind crypto products and platforms accountable when they harm investors and violate the federal securities laws,” an excerpt in the official SEC press release read.

As the SEC and Rari Capital settle, terms include permanent injunctions, civil penalties, disgorgement with interest, and a five-year ban on the co-founders serving as officers or directors. Additionally, the SEC imposed a cease-and-desist order, which Rari agreed to but neither admitted nor denied the regulator’s findings. The settlements remain subject to court approval.

Rari Collapse and Implications of SEC Charges To DeFi

Following its launch in 2020 to offer automated yield farming, Rari Capital steadily ascended the ranks. The DeFi protocol achieved more than $1 billion in total value locked (TVL) by 2021,ascribed to its high-yielding liquidity pools.

However, the firm was plagued with challenges, which ultimately culminated in its collapse. In 2021, Rari was exploited for around $11 million following an integration issue with Alpha Finance.

In 2022, the firm suffered another massive exploit, this time losing upwards of $80 million from its Fuse pools with bad actors using a reentrancy bug. The effects of the reentrancy bug affected several other DeFi protocols, including Babylon Finance, which also shut down.

“Babylon Finance is shutting down. Despite our efforts, we haven’t been able to revert the negative momentum caused by the Rari hack. The market has not helped,” Babylon Finance founder Ramon Recuero said at the time.

The SEC’s action highlights the regulator’s ongoing efforts to regulate decentralized finance platforms. Some of these platforms’ operations indicate an inadvertent assumption that their decentralized nature places them outside traditional regulatory frameworks.

Read more: Crypto Regulation: What Are the Benefits and Drawbacks?

Therefore, this settlement’s implications are significant for the DeFi sector. They reflect broader themes in the regulatory environment, including investor protection, operational challenges, legal and compliance considerations, and regulatory scrutiny.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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Why Ethereum Price May Fall Under $3,000

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Ethereum (ETH) is currently facing significant downward pressure, with its price declining by 3% over the past 24 hours. This bearish trend could push ETH’s price below the critical $3,000 price level.

This analysis examines the factors contributing to this likelihood.

Ethereum Sellers Re-Emerge

An assessment of the ETH/USD one-day chart has revealed that the coin’s moving average convergence divergence (MACD) indicator is forming a potential death cross. As of this writing, the coin’s MACD line (blue) is attempting to fall below its signal line (orange).

This indicator measures an asset’s price trends and momentum and identifies its potential buy or sell signals. A MACD death cross occurs when the MACD line (the shorter-term moving average) crosses below the signal line (the longer-term moving average), indicating a bearish trend or momentum reversal. This signal suggests that selling pressure is increasing, and the asset’s price could decline further.

ETH MACD
ETH MACD. Source: TradingView

ETH’s rising Aroon Down Line confirms this strengthening bearish pressure. It currently sits at 78.57%, confirming that the decline in ETH’s price is gaining momentum.

The Aroon Indicator evaluates the strength of an asset’s price trend through two components: the Aroon Up line, which reflects the strength of an uptrend, and the Aroon Down line, which reflects the strength of a downtrend. A rising Aroon Down line indicates that recent lows are occurring more frequently, signaling growing bearish momentum or the start of a downtrend.

ETH Aroon Down Line
ETH Aroon Down Line. Source: TradingView

ETH Price Prediction: Key Support Level To Watch

ETH currently trades at $3,333, resting above the support formed at $3,203. This level is crucial because a decline below it will cause ETH to exchange hands under $3000. According to readings from the coin’s Fibonacci Retracement tool, the Ethereum price will drop to $2,970 if this happens.

ETH Price Analysis
ETH Price Analysis. Source: TradingView

However, a resurgence in the demand for the leading altcoin will invalidate this bearish thesis. If this occurs, Ethereum will rally toward $3,500.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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Cantor Fitzgerald Deepens Tether Ties With 5% Stake Acquisition

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Cantor Fitzgerald, a prominent US financial services firm, is expanding its alliance with Tether, a key player in the digital asset industry and the issuer of the world’s largest stablecoin.

According to reports, the firm has agreed to acquire a 5% stake in Tether as part of a broader collaboration that includes Bitcoin-backed lending initiatives.

Tether Mints $13 Billion USDT as Cantor Fitzgerald Deepens Tie

The acquisition talks, reportedly finalized in 2023, valued the 5% stake at approximately $600 million. This partnership positions Tether to gain strategic advantages, particularly as Cantor Fitzgerald’s CEO, Howard Lutnick, takes on his new role as Secretary of Commerce under President-elect Donald Trump.

Market observers suggest that the nomination raises the possibility of enhanced regulatory support for Tether, which has faced scrutiny over potential violations of sanctions and anti-money laundering regulations—a claim the company has denied. However, Lutnick has promised to step down from his positions at Cantor Senate confirmation.

Beyond the ownership stake, Tether is expected to support Cantor Fitzgerald’s Bitcoin lending program, a multi-billion-dollar initiative. The program aims to offer loans backed by Bitcoin, initially funded with $2 billion, with plans for significant future expansion.

Meanwhile, Cantor Fitzgerald is already a critical partner for Tether, reportedly holding a significant portion of the stablecoin issuer’s $134 billion reserves in US Treasury bills.

As Cantor Fitzgerald deepens its involvement with Tether, the firm has continued its aggressive token minting. On November 24, blockchain analytics platform Lookonchain reported that stablecoin company minted an additional $3 billion USDT, bringing the total minted since November 8 to $13 billion. This expansion has pushed the total supply of USDT to approximately $132 billion.

Tether USDT Supply
Tether’s USDT Supply. Source: Tether

The increased USDT supply may reflect the growing demand for stablecoins, often used to hedge market positions or facilitate crypto transactions without converting to fiat. This liquidity influx could reduce volatility and enhance price stability across the digital asset market.

This surge in USDT supply coincides with a broader market rally led by Bitcoin and other assets such as Dogecoin and Solana, signaling renewed investor confidence in the crypto ecosystem.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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Can the SAND Token Price Rally Be Sustained?

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SAND, the token powering the metaverse platform The Sandbox, has seen a meteoric rise, surging 55% in the past 24 hours. This performance far outpaces leading assets like Bitcoin and Ethereum, which each gained just 1% during the same period. SAND’s trading volume has also skyrocketed, surpassing $1.91 billion — a climb of over 500% in 24 hours.

On-chain data has shown a significant increase in daily SAND transactions and a decrease in selling pressure. These factors suggest the potential for a sustained rally. 

The Sandbox Holders Adopt a Bullish Approach

According to CryptoQuant’s data, the daily count of SAND transactions has rocketed over the past few days. For context, on November 23, 2,940 transactions involving SAND were completed, representing the highest count over the past seven days. 

This is a bullish signal for the metaverse-based token because a surge in an asset’s transaction count indicates increased activity and interest. It signals higher demand and participation by market participants. Also, it suggests growing confidence in SAND’s price, potentially driving it further upward.

SAND Transaction Count
SAND Transaction Count. Source: CryptoQuant

Additionally, a notable increase in exchange withdrawals for SAND has been observed. Per CryptoQuant’s data, the token’s exchange withdrawal transactions currently total 877, its single-day highest since June 2023. 

The exchange withdrawing transaction metric tracks the number of cryptocurrency withdrawals from exchanges. A spike in this metric indicates that investors are moving their assets off exchanges. This is a bullish signal, suggesting increased confidence and a potential long-term holding trend.

SAND Exchange Withdrawing Transactions
SAND Exchange Withdrawing Transactions. Source: CryptoQuant

SAND Price Prediction: Rally Above $0.66?

On the daily chart, SAND is trading at $0.61, a level last seen in April. Its price currently sits below the resistance at its cycle peak of $0.66. If bullish momentum strengthens, SAND could rally toward this peak and reclaim it.

SAND Price Analysis
SAND Price Analysis. Source: TradingView

Conversely, if bullish sentiment wanes and selling pressure strengthens, the SAND token price may plunge toward support at $0.56, invalidating this bullish outlook.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.



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