UBS is not looking for the S&P 500 to end up any higher by the end of 2024.
Analysts at the bank say a ‘soft landing’ is their base case for the US economy, including a moderation of economic growth, further falls for the inflation rate, and lower interest rates.
We expect this to create a supportive backdrop for equity markets.
However, we think a lot of good news is already priced in at the index level.
UBS are cautious in the near term, expecting some volatility ahead as investors and traders adjust expectations for Federal Reserve policy easing.
Yeah, that’s a solid run. UBS may be onto something with the ‘priced in’ expectation. Especially if the Fed doesn’t cut to the extent the market is expecting.
The DeFi Education Fund and apparel company Beba had just filed a complaint against the Securities and Exchange Commission (SEC) on which the judge of the federal district court had already issued an order of arrest. They aim to have their $BEBA token distribution considered non-security in order to seek the APA enforcement of SEC’s rulings.
According to the complainant, the $BEBA token is not an investment contract or security since it can be redeemed for specific products from Beba’s online store. According to Beba, airdrops can’t be considered securities because they are free. However, there are no shared intentions between Beba and recipients, and the token holders won’t resort to other people’s actions to earn money.
In addition, the complainant claims that the SEC has not sought public opinion when deciding whether the digital assets are securities or not, which is against the APA.
The complainant argued that SEC enforcement proceedings involved insufficient analysis and that the initiative impacting the industry and the public did not undergo any process of commenting. The SEC has 60 days to react to the claim, which will be followed by further notice and order.
The US equity markets were in a cautious mood before the US inflation numbers on Good Friday. On Monday, the Nasdaq Composite Index and S&P 500 declined by 0.27% and 0.31%, respectively. The Dow fell by 0.41%.
While the US market session will set the tone, the Asian economic calendar also needs consideration.
Consumer confidence numbers from Australia could influence retail-linked and interest rate-sensitive ASX 200-listed stocks.
An improving consumer confidence environment could fuel household spending and demand-driven inflation. In March, the RBA continued to consider uncertainty about the outlook for household spending. A boost in consumer confidence could bring an RBA rate hike back to the table.
Economists forecast the Westpac Consumer Confidence Index to decline by 1.6% to 84.6.
Beyond the numbers, investors must also consider earnings, intervention and BoJ chatter from Japan, and stimulus commentary from Beijing. Big names on the earnings calendar include PetroChina (0857), China Telecom (0728), Kerry Logistics Network (0636), and Cosco Shipping HK (0517).
On Tuesday, the ASX 200 futures down up 29 points, while the Nikkei futures were up by 40 points.
Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
What is happening
The SEC is intensifying efforts to classify Ethereum as a security, issuing subpoenas to companies involved with the Ethereum Foundation. This move casts doubt on the approval of Ethereum ETFs, following the SEC’s recent approval of Bitcoin ETFs.
If Ethereum is classified as a security, it could face stringent trading regulations. This might entail increased paperwork and restrictions on buying and selling Ethereum for retail traders in the U.S. Additionally, companies involved with Ethereum may need to adhere to regulations similar to those governing stocks and bonds, potentially introducing complexity into their operations.
Ethereum’s transition to a proof-of-stake model in 2022 prompted the SEC’s scrutiny, despite previous statements suggesting Ethereum’s commodity-like status. The investigation’s outcome could impact Ethereum’s regulatory status and the approval process for Ether ETFs, adding uncertainty to the crypto industry.
The SEC’s investigation into Ethereum involves companies being subpoenaed to provide documents and financial records regarding their interactions with the Ethereum Foundation, responsible for governing and developing the Ethereum blockchain.
The probe gained momentum after Ethereum’s transition to a “proof-of-stake” governance model in September 2022, prompting the SEC to reconsider Ethereum’s classification as a security. This shift away from Bitcoin’s energy-intensive model provided a new pretext for the SEC’s scrutiny.
SEC’s position
Under Gary Gensler’s leadership, the SEC has signaled a broader regulatory approach toward cryptocurrencies, particularly those utilizing proof-of-stake models. However, Ethereum’s approval for ETFs tracking Ether futures by the Commodities and Futures Trading Commission (CFTC) has added complexity to its regulatory status.
Despite CFTC’s view of Ether as a commodity, the SEC’s investigation into Ethereum’s security status has led to speculation and uncertainty within the crypto industry. The potential declaration of Ethereum as a security could further complicate the approval process for Ether ETFs and raise questions regarding CFTC’s oversight of Ether futures markets.
Gensler suggested that Ethereum’s transition to the “proof-of-stake” mechanism, where coin holders earn rewards by staking their assets, might subject Ether to securities regulations. This change from the previous “proof-of-work” method used by Ethereum resembled a significant shift in how the blockchain operated.
Why it matters
While Ethereum’s legal status has long been ambiguous, recent developments suggest a push by the SEC to label it as a security. This contrasts with previous statements indicating Ethereum’s resemblance to commodities rather than securities. On March 22, the SEC extended the deadline to May 30 for its decision on Grayscale’s Ethereum Futures Trust ETF.
If Ethereum is labeled a security, it could face stricter trading regulations, posing challenges for investors and exchanges. Delisting Ethereum from exchanges and the impact on projects built on its blockchain are major concerns. Using a registered security for everyday transactions, like paying gas fees, would be impractical.
Crypto industry reacts
Ripple CEO Brad Garlinghouse is positive the SEC will lose the case:
The SEC picked fights with the industry and is losing badly in the Courts. They’re now fighting fellow regulators like the CFTC, and falling behind international counterparts. At what point will the SEC realize they will lose the war against ETH just as they lost against XRP? https://t.co/rG66npldf4
Coinbase CLO Paul Grewal noted that ETH’s status as a commodity has long been established:
The SEC has no good reason to deny the ETH ETP applications. And we hope they won’t try to invent one by questioning the long established regulatory status of ETH, which the SEC has repeatedly endorsed. That’s not how the law works. And Americans deserve better. 10/10
The DeFi Education Fund and Texas-based apparel company Beba have initiated a lawsuit against the Securities and Exchange Commission (SEC). Brought in the U.S. District Court for the Western District of Texas, the complaint questions the manner the SEC has adopted in digital asset regulation, especially its view towards the classification of certain tokens as securities.
Legal Challenge Over Token Classification
The essence of the legal suit is on the $BEBA token, which Beba distributed via airdrops. According to the plaintiffs, these tokens, which can be used to purchase exclusive elements in Beba’s online store, should not be considered as securities. They argue that the method of distribution and the use of the tokens fail to satisfy the Howey Test, which is employed by the SEC to ascertain if an asset is an investment contract and, thus, security.
The Howey Test demands money to be put into a common enterprise that yields an anticipated profit upon the efforts of others. Beba and the DeFi Education Fund claim that these conditions are not met for $BEBA airdrops, as their tokens are distributed for free, and there is no profit expectation based on the work of others.
SEC’s Regulatory Approach Under Scrutiny
The lawsuit additionally charges the SEC with violating the Administrative Procedure Act (APA), which requires federal agencies to develop rules through an open process consisting of public notice and comment. The plaintiffs assert that the SEC’s “regulate by enforcement” strategy has made the crypto industry uncertain and that it has not provided any clear guidelines or public participation.
The complaint argues that this tactic has stifled innovation and burdened businesses that are looking to capitalize on digital assets in a legitimate manner.
Nathan Hennigh, co-founder of Beba, lamented,
“Like any business owner, I’m always thinking about new and innovative ways to reach more customers and grow support for our products. It’s unfortunate, but we operate in a state of constant uncertainty because of the SEC’s approach to digital assets, such as our $BEBA token.”
Consequently, the SEC has been provided with 60 days to answer the allegations in the complaint. This time frame is standard in proceedings of this kind, allowing the SEC to prepare and file a formal response.
Russia’s government ordered firms to reduce oil output in Q2 in order to hit a production target of 9 million barrels per day (bpd) by the end of June.
This is in compliance with its pledges to OPEC+. Back in early March Novak made the promise:
A crypto industry group and a West Texas apparel company are suing the Securities and Exchange Commission, arguing the agency’s “poorly conceived” crypto policy needs to go through rulemaking.
The SEC under Chair Gary Gensler has effectively adopted a policy that most digital assets are securities subject to the agency’s oversight, but it never went through a formal rulemaking process, DeFi Education Fund and Beba LLC said in a lawsuit filed Monday.
The SEC has brought dozens of crypto-related enforcement actions, including a lawsuit against crypto exchange giant Coinbase Global Inc.
“That behind closed-doors policymaking approach deprived the digital asset …
Important DisclaimersThe content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party’s services, and does not assume responsibility for your use of any such third party’s website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.Risk DisclaimersThis website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
Recently, SEC Chair Gary Gensler issued fresh warnings about cryptocurrencies amid Bitcoin’s surge to a new all-time high. He emphasized concerns about abuses and fraud within the crypto space, cautioning investors about the speculative and volatile nature of Bitcoin.
Although Gensler refrained from commenting specifically on pending applications, he did highlight broader challenges in the crypto industry, including risks associated with intermediaries pooling digital assets without providing adequate disclosures, which could jeopardize investors.
The latest data shows that the rise of fraud in the crypto industry is correlated with the uprising of Bitcoin.
2023, biggest year for crypto fraud
Based on Chainalysis data, scams remained a significant driver of cryptocurrency-based crime in 2023, generating at least $4.6 billion in revenue.
The FBI’s Internet Crime Report for 2023 reveals that losses from crypto investment scams in the U.S. surged to $3.94 billion, up 53% from the previous year’s $2.57 billion. Investment scams became the most common internet crime in 2023, comprising over a third of the total reported losses of $12.5 billion.
Ransomware attacks saw an 18% increase in 2023, with reported financial losses soaring by 74%, reaching a total of $59 billion. These figures underscore the significant threat posed by cybercriminals, particularly to critical infrastructure sectors.
Online fraud losses surpassed $12.5 billion in 2023, marking a 22% increase from the previous year. Business email compromise scams, which target both companies and individuals, contributed $2.9 billion to the total losses in 2023.
Why fraud rising
When the market sentiment is strong, more people will be looking for high-yield opportunities.
According to research by Chainalytics, scams tend to generate less revenue during crypto market declines, as shown in the graph correlating scam revenue with Bitcoin prices in 2022.
According to Chainalysis, scams remained a significant driver of cryptocurrency-based crime in 2023, generating at least $4.6 billion in revenue.
The BBB’s annual report on scams in 2023, drawing from 67,000 scam reports, highlighted creative methods scammers use to defraud investors. According to the BBB, approximately 80% of Americans targeted by crypto and investment scams in 2022 suffered financial losses. Furthermore, the percentage of individuals reporting losses to romance scams surged by over 300% compared to 2022.
Pump and dump schemes are rampant, exploiting newly created tokens to artificially inflate prices, allowing scammers to cash out at the peak. Chainalysis highlights that out of over 370,000 tokens launched on Ethereum in 2023, only a fraction gained significant liquidity.
Romance scams have surged, increasing 85-fold since 2020. Starting on dating apps, scammers build trust over time before coaxing victims into joint crypto investments, resulting in substantial financial losses.
The Better Business Bureau reported that cryptocurrency and investment scams have become the riskiest type of cons in the U.S., with fraudsters frequently defrauding victims out of thousands of dollars.
According to the BBB’s annual report on the biggest scams of 2023, based on 67,000 reports of scams, scammers have devised creative methods to swindle investors. Approximately 80% of Americans targeted in these scams lost money, with the median amount lost being $3,800.
Hackers
Hackers often use social media, video game platforms, or text messages to contact individuals and boast about their financial success due to a crypto investment. Subsequently, they persuade the victims to invest as well.
The surge in hacking coincided with increased investment by U.S. investors during the pandemic, leading to losses due to cyberattacks on platforms with poor cybersecurity. For instance, North Korean cybercriminals alone stole $1.7 billion in cryptocurrency, setting a new record and highlighting the significant role of cryptocurrency theft in the nation’s economy.
As scammers employ increasingly sophisticated tactics, such as romance scams, it becomes more challenging to identify associated addresses. Romance scammers often communicate directly with victims through private channels like text, making it difficult for blockchain analysts to identify these addresses as scam-related.
This likely leads to undercounting of scam activity, particularly in recent years as romance scams have become more prevalent.
How to protect oneself from scams
The risk is inherent in the world of crypto trading due to its decentralized nature and irreversible transactions. These factors expose traders to vulnerabilities, making it difficult to recover funds in the event of a scam.
Staying vigilant, identifying scams early and exercising caution in your crypto dealings are crucial strategies for self-defense. By remaining aware of potential risks and taking proactive measures to mitigate them, traders can better protect themselves from falling victim to scams and minimize potential losses.
