Iran-Israel conflict brings bear market, SEC to sue Uniswap, Bankman-Fried plans appeal | Weekly Recap

The unfolding conflict between Iran and Israel contributed to a collapse in crypto prices on Sunday, April 14.

Last week, the Securities and Exchange Commission sent a Wells Notice to Uniswap, declaring intentions to sue the exchange amid increased regulatory efforts. Meanwhile, FTX founder Sam Bankman-Fried seeks to appeal his sentencing.

The calm before the storm

The crypto market started the week favorably, with the global crypto market cap surging 3.6% to a 3-month high of $2.62 trillion on April 8, with Bitcoin (BTC) reclaiming the $72,000 price threshold following a 3% spike. BTC approached its all-time high on April 8 after rising 4% to offset the losses of the previous correction. However, the premier crypto asset recorded a price decline the next day, dropping 3.45% to $68,000 on April 9 as U.S. inflation data came out hotter than expected.  This downward spiral was short-lived, as Bitcoin eventually staged a comeback, rallying 2.15% on April 10 to recover the $70,000 territory. This recovery push persisted despite an observable drop in whale activity. Reports from April 9 confirmed that BitMEX founder Author Hayes remained skeptical of Bitcoin’s ability to reclaim and hold above its recently set all-time high as the halving nears. Hayes predicted that BTC could drop immediately before and after the halving.

Iran-Israel conflict exacerbates market crash

The bears retook control of the scene as the week progressed. Bitcoin dropped to the $65,000 zone on April 12 for the first time in over a week. With the Bitcoin decline came a wider collapse in the market, causing the global crypto valuation to fall to $2.2 trillion on April 12. The tension surrounding the looming Iran-Israel conflict exacerbated the market drop. This resulted in massive liquidations across the market, with over $860 million flushed from the derivatives market. Iran eventually fired over 100 drones toward Israel on April 13, further escalating the tension. Following this unprecedented attack, the crypto market saw a steeper decline, with Bitcoin dropping to a 1-month low of $60,660 on April 13. Despite the liquidations, renowned computer intelligence consultant and Bitcoin advocate Edward Snowden emphasized that there is no reason to panic.

Uniswap receives a Wells Notice 

While the crypto community grappled with price volatility, the U.S. SEC explored the prospect of leveling charges against Ethereum-based decentralized exchange Uniswap, the largest DEX in the world.  Notably, Uniswap revealed on April 10 that it had received a Wells Notice from the SEC, with the securities regulator declaring its intentions to pursue legal action against the decentralized exchange. Uniswap founder Hayden Adams expressed his disappointment in the move, but stressed that he and his team plan to fight. Following reports of the development, UNI, the exchange’s native token, dropped 17% to $9.27 as selloffs intensified. 

US regulatory environment

The broader U.S. crypto regulatory environment took center stage this week. Reports surfaced, revealing that the Treasury is seeking greater authority to crack down on crypto use by sanctioned entities like North Korea, Russia and Iran. U.S. lawmaker Senator Kirsten Gillibrand disclosed this week that Congress is already engaged in discussions about introducing a bipartisan bill to regulate stablecoins. This comes shortly after Ripple revealed intentions to launch a stablecoin this year. While federal agencies and Congress push to regulate the crypto scene, former Ethereum advisor Steven Nerayoff initiated a lawsuit against the U.S. government, demanding $9.6 billion in damages for alleged harsh treatment by government agencies over the past four years. 

Global regulatory efforts

Besides the U.S., regulatory efforts dominated the scene in other jurisdictions. This week, the central bank of Russia called on the country’s lawmakers to quicken the introduction of a bull that would regulate the use of cryptocurrencies, especially for international settlements amid sanctions from the U.S. Meanwhile, in Hong Kong, reports from this week suggested that crypto exchanges are battling regulatory uncertainty. This prevailing environment is now prompting multiple firms to explore a move overseas. In British Columbia, the government is looking for ways to address the high energy consumption associated with crypto mining operations. To do this, the region seeks to leverage a legislative amendment to regulate the crypto-mining industry.

Bankman-Fried to appeal sentencing, Do Kwon’s extradition approved

Bankman-Fried’s lawyers argued in a letter to Judge Lewis Kaplan on April 8 that it would be more convenient to retain Bankman-Fried in the temporary detention in Brooklyn, where he has been since last August, until an appeal is done. Bankman-Fried was sentenced to 25 years in jail. On April 10, Ryan Salame, a former FTX executive, will receive his sentencing on May 28 after pleading guilty. Other former FTX executives such as Gary Wang and Caroline Ellison also await sentencing. In a rollercoaster ride, Terra founder Do Kwon’s extradition was again approved by a court in Montenegro. Recently, Andrej Milovic, Montenegro’s Minister of Justice, will determine whether the South Korean developer would be extradited to his home country or the U.S. to face charges.

Solana suffers congestion

This week, Solana witnessed a bittersweet moment marked by increased network adoption and congestion issues. CoinGecko disclosed on April 8 that DEXs on Solana accounted for most of the trading volume in the DeFi scene.  This was primarily due to the growing deployment and interest in meme coins on Solana, following the successes of Bonk (BONK) and dogwifhat (WIF). However, with increased network activity came congestion issues. Anza, a Solana developer team, deployed an update to try and address this issue.

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