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Let's take ride on the Fed & SEC rollercoaster 📉

Let's take ride on the Fed & SEC rollercoaster 📉

Fed hikes up interest rates, Bitcoin drops & Ethereum becomes a regulatory target

Build in Bear
September 21, 2022

This is your midweek edition of Web3 Seems Legit, the newsletter that keeps you strapped into the crazy crypto rollercoaster. Puking may be involved though 🤮.

Here are the latest crypto news we'll be covering this issue:

The Fed raises interest rates by 75 BPS. The rate hike comes in as expected and causes Bitcoin to dip -6.5%.
The SEC quietly aims their target at Ethereum. Now that The Merge is complete, Ethereum is onto some bigger problems with the SEC.
Wintermute hacked an estimate $160M. One of the biggest market makers in crypto was exposed to a vulnerability. How is it affecting the market?

The Fed raises interest rates by 75 BPS

The numbers are in folks and it's exactly what we expected. Just announced, the Fed will be raising interest rates (again) by 75 BPS (0.75%) and could be looking at 100-125 BPS for the rest of the year. Hang on, it's going to be a bumpy ride 😵‍💫.

Imagine having a 100x long going into the Fed announcement.
For ten whole seconds, you were on top of the world. You 3xed your money.
You f*cking nailed this move.
You can't believe your luck. You put your phone down for a few seconds and soke it in.
This is your moment.
— K A L E O (@CryptoKaleo)
6:12 PM • Sep 21, 2022

The SEC quietly aims their target at Ethereum

Ethereum can't seem to catch a break. After completing one of the most technologically challenging developments in crypto history, instead of celebrating, they've been hit with big dump on ETH and an even bigger regulatory target on their back.

The SEC has quietly claimed that the #Ethereum network falls under their US jurisdiction as a securities exchange.
What does this mean for Ethereum and the #crypto industry as a whole? 🧵👇
— Web3 Seems Legit (@web3seemslegit)
7:15 PM • Sep 20, 2022

Here's the gist: The SEC just charged a crypto influencer for a 2018 ICO of an unregistered security. Within the case filing is a statement that implies that the entire Ethereum network falls under the US jurisdiction.

Woah - quiet the bombshell statement from the SEC within a new suit against a 2018 ICO for selling unregistered securities.
Very ugly implications here if this is the precedent.
— Dylan LeClair 🟠 (@DylanLeClair_)
4:22 PM • Sep 19, 2022

Instead of providing answers, the SEC likes to drop small hints and quietly slide claims into places they don't think people will notice. But if there's one thing you should know about web3 folks is that people 👏 notice 👏 everything 👏.

Wintermute hacked an estimate $160M

Here's your daily reminder that immunity doesn't exist in crypto. Wintermute is one of the biggest crypto market makers that provides liquidity to big names like Coinbase and Binance. As reported by their CEO, they were hacked for about $160M.

We’ve been hacked for about $160M in our defi operations. Cefi and OTC operations are not affected
— wishful cynic (@EvgenyGaevoy)
8:03 AM • Sep 20, 2022

What happened? A couple of days ago, it was disclosed that Profanity, a vanity wallet address generator had a critical bug. The best guess is Wintermute's admin wallet was generated with the Profanity tool and the hacker exploited the vulnerability.

Wintermute was hacked for ~160m a few hours ago.
I took a quick look and my best guess is that it was a hot wallet compromise due to the Profanity bug that was publicly disclosed a few weeks ago.
— Mudit Gupta (@Mudit__Gupta)
9:06 AM • Sep 20, 2022

The good news is that it seems like there will be no major ripple effects. The CEO claims that they remain solvent and have 2x the funds to cover the losses if needed. That's what we like to hear 👏.

Meanwhile...the hacker has taken the funds to farm more yield on Curve 😑.

Wintermute was hacked for $160M, one of the largest market makers.
This mad lad then deposited $114M into Curve to provide LP.
Hackers address: 0xe74b28c2eae8679e3ccc3a94d5d0de83ccb84705
— Nick Ford (@CryptoWithNick)
8:27 AM • Sep 20, 2022

Here are some other interesting threads to read:👉 How much money can you make working in web3?👉 On cybersecurity👉 Active vs. passive investing

We know it's been rocky, but hold tight 💪. If this issue was helpful and you learned something new, help us by following @web3seemslegit. We appreciate every follow, like and share!