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Markets

Federal Reserve

Markets Trade Lower After 0.25% Rate Hike

Bitcoin and Ether Drop 4%, BTC Open Interest Surges

By Owen Fernau

The US Federal Reserve has hiked its benchmark interest rate by 25 basis points in a widely expected decision.

Markets turned lower after Fed chair Jerome Powell said that central bank officials “don’t see rate cuts this year,” in a press conference following the release.

Bitcoin, which hit a nine-month high in March, fell 4%, while Ether, the second-largest digital asset, slid 3%.

Most major tokens are down, with Ripple (XRP), Cosmos (ATOM) and GMX down over 5%.

This Fed decision was one of the most anticipated in recent memory, coming after two of the three largest bank failures in US history took place in March 2023.

Read the full story in The Defiant

News

Layer 2

Arbitrum Earmarks 112M ARB Tokens For Ecosystem DAOs

Highly Anticipated Airdrop Will Be Claimable On March 23

By Samuel Haig

On Tuesday, Arbitrum said that ecosystem DAOs will receive 112M ARB, roughly 10% of the 1.15B tokens earmarked for the airdrop.

“We’re giving over the ecosystem and control of the chains and their technology to Ethereum,” Steven Goldfeder, the co-founder and CEO of Offchain Labs, the company behind Arbitrum, told The Defiant.

The top DAO recipients include Arbitrum-native leaders like perpetuals trading platform GMX and gaming ecosystem Treasure, with 8M tokens each. Cross-chain behemoths like Uniswap and Sushi are getting 4.3M ARB apiece, and Curve will receive 3.5M tokens.

In total, 139 projects will receive between 75,000 and 8M ARB tokens.

Read the full story in The Defiant

SEC

Sushi Braces for Legal Fight After SEC Subpoena

‘Head Chef’ Asks for $3M to Cover Legal Expenses

By Aleksandar Gilbert

Sushi, a decentralized exchange with almost $600M in user deposits, and its “head chef” have been subpoenaed by the Securities and Exchange Commission.

The exchange’s governance token, SUSHI, dropped 5% after Head Chef Jared Grey — a position akin to CEO — asked token holders to approve a $3M fund to cover Sushi’s expected legal expenses.

The subpoena is the latest sign that US regulators can and will crack down on decentralized organizations. Most crypto advocates had until recently worked under the assumption that DAOs, like SushiSwap claims to be, would be protected from regulatory action.

Read the full story in The Defiant

Regulations

White House Report Calls For Greater Oversight of Web3

Slams Crypto As Speculative and Ineffective

By Samuel Haig

The White House’s Economic Report of the President for 2023 criticizes web3 and calls for increased regulation of the sector. The report characterizes cryptocurrencies as an ineffective means of payment and claims that their primary purpose is to create artificial scarcity and drive speculation.

While excluding central bank digital currencies and nonfungible tokens from its definition of crypto assets, the report argues that financial regulations that crypto seeks to bypass were shaped by lessons learned from past financial crises.

The report has drawn criticism from proponents of the crypto industry, who argue that the government is orchestrating a targeted attack on the sector through regulatory takeovers, enforcement actions, and pending legislation.

Despite its criticism of distributed ledger technologies, the report concedes that corporate and government experiments with DLT could yield many of the benefits associated with the technology.

Read the full story in The Defiant

Banking Crackdown

Crypto Companies Report Being De-banked To Blockchain Association

Lobbying Group Requested Information From US Banking Regulators Last Week

By Owen Fernau

The Blockchain Association, a non-profit organization focused on shaping pro-crypto policy in the United States, has received multiple reports from crypto companies claiming that they are being de-banked by traditional financial institutions.

“It’s very clear that banks are denying crypto companies access to bank accounts,” said Kristen Smith, CEO of the Blockchain Association.

It remains unclear whether banks are acting on their own or if government bodies are pressuring them to withhold services from crypto companies.

Read the full story in The Defiant

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