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🔥 SEC issues a rare apology in recent crypto case

And the first contract settled in crypto is registered in Argentina!

Ambire bros, it’s that time again. Our weekly newsletter is here!

What happened in crypto this week:

  • 🪙 New ETH upgrade goes live on testnet

  • 🤦‍♂️ SEC had to apologize due to false statements in crypto case

  • ✉️ Argentina registers first contract settled in crypto

  • 👨‍⚖️ EU Banking Authority aims to tackle crypto risks with new guidelines

Let’s get on with it!

If you’d rather listen to an audio summary, we have got you covered:

New ETH upgrade goes live on testnet

👆️ The Dencun upgrade, which includes a major update known as "proto-danksharding," was deployed on Ethereum's Goerli testnet at 6:32 p.m. UTC on Jan. 17, 2024.

  • Although the participation among validators for the upgrade was not as high as expected, it is worth noting that this was a common occurrence 🤔 

  • The upgrade resulted in a temporary "chain split" as not all validators were able to sync with each other for the update 🙄 

  • Later, Ethereum core developer Parithosh Jayanthi confirmed that the chain was finalizing again and assured that the issue was due to a bug in Prysm nodes, which has since been patched 🛠️ 

  • The next phase of the Dencun upgrade is scheduled for Jan. 31 on the Sepolia testnet, followed by the Holesky testnet activating it on Feb. 7.

Once Dencun runs smoothly on all three testnets, the Ethereum Foundation plans to roll out the upgrade on the Ethereum mainnet by the end of Q1 2024.

Dencun will be the final upgrade for the Goerli testnet. After its completion, both the client and Ethereum Foundation testing teams will discontinue support for Goerli as they shift their focus to other testnets and the mainnet.

The highlight?

The Dencun upgrade brings the activation of proto-danksharding, also known as EIP-4844.

This process aims to increase blockchain space for data blobs and slash Layer-2 rollup fees by up to 10 times or more 🤯 

As analysts believe that high transaction fees hinder the protocols' growth, this upgrade is eagerly awaited by the community. Hopefully, it will pave the way for a more efficient and cost-effective Ethereum network.

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SEC had to apologize due to false statements in crypto case

The US Securities and Exchange Commission (SEC) recently issued a rare apology to a judge for misrepresenting facts used to obtain a restraining order and asset freeze against a crypto firm 👮 

  • Previously, SEC accused Digital Licensing Inc. (DEBT Box) of fraud and stealing $50 mil from the investors.

As part of their case, the SEC sought a temporary restraining order and asset seizure against DEBT Box and its directors, claiming that they were attempting to move operations overseas to avoid regulatory oversight 🤦 

But it didn’t go all tоo well for SEC..

The company challenged the allegations, and the judge ordered the SEC to back up their claims.

👉️ It was revealed that the SEC had made materially false and misleading representations in their application for an ex parte motion (meaning that the firm was not informed of the proceedings and could not challenge them in court).

  • The judge expressed concern about the SEC's actions, stating that they had potentially undermined the integrity of the proceedings.

In their response to the judge's order, SEC attorneys acknowledged that they had "fallen short" and promised to conduct mandatory training for staff involved in the investigation.

They cited errors made due to the haste of preparing applications, such as relying on inferences from a YouTube video instead of direct evidence 🫠 

Taken together with its recent Twitter/X account “hack,” the case reveals a striking lack of due diligence within the agency. The chief enemy of crypto in the US govt has turned out to be rather incompetent.

But hey, maybe that’s for the best? 🤔 

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Argentina registers first contract settled in crypto

Argentina has made yet another step towards crypto adoption by registering one of the first contracts settled in crypto 🥳 

The Minister of Foreign Affairs of Argentina, Diana Mondino, has clarified that this was made possible following the passing of the first mega executive order issued by President Javier Milei 👇️ 

  • The order eliminated the lease and rents law, allowing contracts to be settled in crypto and other assets, thus allowing contract signatories to avoid using the devalued Argentine peso, the country's national fiat currency.

The rental agreement, signed in Rosario City, stipulates that the tenant will pay the equivalent of $100 in BTC to the landlord each month 🪙 

To execute these payments, Fiwind, a national crypto exchange, has been selected as the provider of the referential Bitcoin price.

This move should further solidify Argentina's position as a leader in crypto adoption in Latin America. It could also pave the way for other countries to follow suit in embracing digital assets 💪 

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EU Banking Authority aims to tackle crypto risks with new guidelines

The European Banking Authority (EBA) has decided to extend its money laundering and counter-terrorist financing (CTF) guidelines to include crypto-asset service providers (CASPs) 👇️ 

This decision is one of the steps in the EU's efforts to combat the misuse of crypto assets in ‘illicit financial activities’ 🥱 

Essentially, it’s about AML regulations being expanded to cover crypto.

  • The EBA's guidelines focus specifically on the risks associated with crypto assets, which include their rapid transfer capabilities and features that allow users to remain anonymous.

Here’s what they want

The EBA advises crypto service providers to thoroughly scrutinize their operations by examining their customer base, the types of crypto products they offer, delivery channels, and the geographic locations in which they operate 🌍️

I.e., they want to lift the rock and see what kind of bugs crawl out from underneath.

In addition to risk identification, the guidelines recommend that providers adjust their risk mitigation strategies accordingly 📈 

It's actually quite surprising that this thing goes beyond basic surveillance 🤔 

For instance, providers are advised to start using blockchain analytics tools to make their defense mechanisms work better against potential money laundering or terrorist financing activities.

Hopefully, the EBA's proactive stance signals a significant shift towards recognizing the growing influence of crypto in the finance sector instead of solely focusing on strict regulations 🎩 

One way or another, crypto has to mature, and a healthy regulatory framework is a crucial step towards achieving that.

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Among other worthy reads:

A thread on SEC vs Coinbase legal battle:

The bot meta is making a return? 🤔 

Top signals by QW:

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That's all for now, frens.

We'll meet in a week! And remember, the market conditions are temporary, but our commitment to building a better DeFi is here to stay. Thanks for joining us, and we look forward to seeing you back next week. Cheers!

Yours, The 🔥 Team

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