today coinbase gears up for a years-long
court battle with the SEC bittrex
responds to the regulator's claim it ran
an unregistered Securities Exchange and
as the dust settles from the Shanghai
upgrade we speak with one of the
creators of nonsense Shanghai dashboard
to find out whether East withdrawals are
spiking
[Music]
welcome to cnbc's crypto world I'm Tanea
McKeel digital currencies are back in
the green this morning with Bitcoin
jumping back above thirty thousand
dollars ether reaching the 2100 level
and Solana rising to nearly 25 all by
noon Eastern
let's talk about the top stories first
up coinbase's CEO Brian Armstrong says
the crypto exchange is headed for a
court battle with the SEC in an
interview with CNBC at a fintech
conference Armstrong said the company
was absolutely prepared for the battle
to be years long and that it would be
necessary to get the legal precedent for
crypto regulation this comes after the
SEC last month issued a Wells notice to
coinbase which is usually one of the
last steps before the agency files
charges even over the last month or
sorry the last year we had 30 meetings
never got a single piece of feedback
from them about what we could be doing
better or differently and then this
Wells notice arrived it's an abdication
of responsibility I mean the regulator's
job is to publish a clear rule book and
allow that market to be safe but also to
flourish in that country at that same
conference Armstrong also cautioned that
the U.S has potential to be an important
market for crypto but without regulatory
Clarity coinbase is looking for other
markets to invest in and could consider
relocating next bittrex is responding to
the sec's charges against the crypto
Exchange arguing that the move is quote
part of chairman gensler's larger
crusade to drive cryptocurrency out of
the United States yesterday the SEC
charged bittrex and its former CEO
William Shahara with allegedly operating
an unregistered National Securities
Exchange broker and clearing agency the
SEC also charged the firm's foreign
affiliate for failing to register as a
national Securities Exchange in
connection with its operation of a
single shared order book along with
bittrex the agency alleged in its
complaint that Shahara coordinated with
issuers who wanted to have their crypto
asset available for trading on the
platform to delete public statements
that he believed would lead Regulators
to investigate token offerings as
Securities we reached out to Shahara for
comment but didn't hear back right away
in a statement sent to us a bitruck
spokesperson said that Securities were
not offered or traded on bittrex nor did
bittrex offer any products that were
investment contracts adding that the
firm operated within the parameters of
the law at all times the spokesperson
went on to say that on multiple
occasions bittrex asked the SEC to
indicate what digital assets on the
platform were viewed as Securities so
that the firm could review and
potentially de-list them but the Agency
quote refused to do so finally some of
ftx's biggest celebrity backers like Tom
Brady and Larry David say the investor
lawsuit against them should be dismissed
according to a report from Reuters they
argued that they never pitched the
accounts at issue and weren't at fault
for investor losses in fact they called
it nonsense that actors in any brokerage
ad could be liable for losses from any
security later purchased by an
individual user the latest response from
those celebrities came just after
lawyers for the investors announced they
were able to finally serve Shaquille
O'Neal in the lawsuit on Sunday back in
December Shaq tried to distance himself
from the suit when he told CNBC that he
was just a paid spokesperson
all right let's talk about ethereum for
our main story it's been almost a week
since the Network's latest upgrade and
to track all the East moving around the
network blockchain analytics platform
nonsense launched its Shanghai dashboard
crypto world's Talia Kaplan spoke with
nonsense analyst Nicholas Polk to break
down the data
ethereum Shanghai upgrade enabled
withdrawals of States either for the
first time now you were integral in
creating nonsense public dashboard which
tracked the update in real time what
stood out to you what did you notice
immediately happened in the days after
that State's ether became unlocked
so one thing that really struck me is
that everything kind of went smoothly
like the the block was announced
beforehand and like you could really see
immediately the withdrawals rolling in
and um people actually getting access to
the if that has been locked for some
people for years actually
um so there was like a really big uptick
in that and then you could also see that
at first there were a lot of partial
overthrow throats
um so what that means is that people
would have to like 30 to Ether in the
deposit contract and then it would
accrue rewards but they they couldn't
withdraw any of it so the principal the
32 ether and all the rewards who are
kind of stuck there and they did not
earn any additional rewards for their
already on rewards so it would not
compound and so all these games that
they had in that time were basically
idle so many people were eager to
basically do the partial withdrawal of
the equipped rewards and also restate
them and that is also what you saw
as of last week more than 35 billion
dollars of either which was frozen in
the long-term staking program could have
been withdrawn and yet holders of only
1.67 billion dollars worth of either
initially requested to withdraw their
crypto that's according to data from
nonsense what does that show you
um that does show me that
um actually people are still quite
confident in in effect as an asset and
in the chain and the future of the chain
and
um also a lot of those people that did
withdraw a lot of this were initial
um as I already said the partial
withdrawals and a lot of these were from
actual providers for example liquid
staking providers like Lido which are
heavily incentivized to restate their
rewards to keep sort of their their
yield competitive and so this is one
thing but I do think that not all the
solvers since the full withdrawals the
withdrawal of the principle
um there are several cues and mechanisms
in place that um it will not get
available immediately so there's still
um I think like around 900 000 years
waiting for the full withdrawal which
just hasn't gotten through all this exit
execute and and all these processes yet
so dashboard data today it shows Stakes
eats deposits are now outpacing
withdrawals as of 11 this morning there
were about 21 700 East withdrawals in
the past 24 hours while deposits reached
about 84 500. what does that signify
so I think a lot of the new deposits
that came in like of course some of it
was because now you can actually
withdraw so people are a lot more
confident in in staking Behavior since
they are sure that they can get it back
um on relatively short notice and on the
other hand a lot of these were people
um that were basically restaking their
rewards which have been idle all the
time and so they they are trying to
basically up their yield and restaking
the withdrawals and compounding out of
it
um but I think in the coming days it
might be that there will be another wave
where this balance will become negative
as a lot of these um full withdrawals
also if the principle will become
processed I think in the next
um around 20 days 18 to 20 days
okay so let's talk prices ether has been
trading higher since the Shanghai and
capella updates were completed last week
with either trading around two thousand
dollars its highest level since August
what do you think this signifies
I think on the one hand
um obviously it's it's called upgrade
for a reason because it is inherently
good for the ecosystem and for ether so
I think it is good news that that this
happened especially in the long term
um as I said in the next 18 to 20 days
there might be like some fluctuations
that a lot of people
um get their principles back but I think
in the long term it is definitely really
good as for the recent price movement
um I think some of it was for sure due
to Shanghai but
um coincidentally I think a lot of other
assets like Bitcoin also
um reach new new heights so
um I'm not sure if all of it was really
contributed to Shanghai but I think it's
it's definitely a good thing that this
happens
so it seems like ethereum is always in
development following the merge in
September which of course was key and
key in a transition to proof of stake
developers started focusing on the next
big update Shanghai now that the
Shanghai upgrade is complete and the
blockchain transitioned to a full
functioning proof of stake Network
what's next what are people paying
attention to now I mean last week
vitality and ethereum's co-founder said
scaling so the process of making
transactions faster and cheaper should
be prioritized and in November he
released an updated roadmap of issues
that need to be tackled including what's
known as The Verge Purge and Scourge
what do you think is top of mind
so I think now as we have the stronger
upgrade and the the successful switch to
proof of stake
um I think indeed uh ethereum will
probably strive to make transactions
cheaper as he said but I think primarily
also as Italy came to that primarily not
on the main chain but for everything
built on top of it so especially for
layer tools like optimistic Roll-Ups and
DK Roll-Ups which also have like big big
stuff coming up I think
um a lot of these things these
improvements to ethereum will especially
have layer twos in mind as these are
probably like the the real scaling
solution to ethereum
so for example one of the tele mentioned
is prototank shutting or which will come
later as an upgrades approach and
cutting Bank shutting which will
basically allow Roll-Ups on top of
ethereum to become way way cheaper
