More SEC charges against a cryptocurrency project. Flow with the steepest drop today

The Securities and Exchange Commission (SEC) has charged 11 people linked to a $300 million scam called Forsage. The project was founded in early 2020 by four friends from Georgia, Russia and Indonesia. It quickly grew and became the most popular decentralised application (dapp) on the Ethereum blockchain. At the peak of its popularity, it accounted for a quarter of the blockchain's bandwidth. According to Dune Analytics data, Forsage contributed to a significant increase in gas fees.

The project collaborated with influencers to promote. In return, they received payment raised from the money generated by new users and additional compensation for bringing more promoters into the network. The SEC described the business model as a "textbook financial pyramid scheme."

The SEC's counterpart in the Philippines took action against Forsage in the second half of 2020 and later by the US organizations. The most high-profile trial is currently taking place in the States, where the court accuses the company of taking more than $300 million from retail investors around the world.

Carolyn Welshhans, chief of the SEC’s Crypto Assets and Cyber Unit, called Forsage a "fraudulent financial pyramid scheme launched on a massive scale and aggressively advertised to investors." She added that "fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains." This may confirm investors' belief that regulators will become an integral part of DeFi.

Nomad Bridge loses nearly $200 million

Hundreds of alleged hackers and exploiters in Nomad Bridge's security procedures took $190 million out of the Total Value Locked (TVL) pool in just a few hours. Nomad is a bridge that enables the transfer of tokens between Avalanche, Ethereum, Evmos, Milkomeda C1 and Moonbeam. It represents an important link in the crypto world. TVL, in simple terms, served to provide liquidity and security and allowed for staking and borrowing of tokens between users.

According to the DefiLlama platform, Nomad Bridge lost $190.7 million with only $651.54 left in the pot. This could have been allowed by a security flaw, a so-called exploit. So far, at least one hacker has announced that it was a security test and that he will return the funds he has taken. We don't know how much he holds and whether the others involved in this virtual "heist" also had good intentions. For now, there is little indication that the company was aware of what was about to happen.

Crypto market continues the local correction

Analysis of the increases over the past 1.5 months seems to indicate a cautious approach by investors to most tokens with cyclical movements of about two weeks in length. Today, the Flow token is falling the hardest, dropping 9.4% as of 12:00 GMT+3 01.08.22 on the Conotoxia MT5 platform. The Flow is one of the largest tokens, ranking 34th on CoinMarketCap's list. Its total capitalization reaches nearly $2 billion. On the other hand, the Flow blockchain is designed as the basis for a new generation of games, applications and the digital assets that power them.

Technical analysis of the hourly chart of Bitcoin (BTC) suggests that the current price of $22,700 is likely to be near a local support level. From a macro perspective, it seems that we still have to wait for any major increases. Based on an analysis of historical cycles, some agencies indicate that the next potential major bull market in cryptocurrencies could appear as early as 250 days.

Author Bio

Daniel Kostecki is an award-winning senior market analyst, victor of the FxCuffs statuette for “Blog of the Year” and “Personality of the Year”. He has 15 years of experience on the financial markets and a diploma in Economics from the University of Szczecin in Poland. Daniel is privately connected to the financial markets since 2007 and professionally - since 2010. Author of numerous commentaries and analyses of the situation on the financial markets and a guest on Polish TV, press and radio.