Good Morning Crypto Enthusiasts!

Glad to have you back for another edition of the UseTheBitcoin.com newsletter.

1. 🚀 GameStop Meme Coins Surge on Solana: Keith Gill, known as "Roaring Kitty," reignited meme coin activity on the Solana blockchain by posting a meme on Twitter. This led to the creation of over 14,500 new tokens on Solana via the pump.fun protocol, including names like GME Stonks and GameOver.

2. 🎲 Cypher Protocol Contributor Steals and Gambles Funds: An anonymous core contributor to Cypher Protocol, "hoak," confessed to stealing and gambling away $260,000 from a redemption contract set up to recover losses from a $1 million exploit in August 2023.

3. 🔍 Alex Bridge Exploit Drains $4.3M: The Alex protocol bridge on the BNB Smart Chain network suffered a $4.3 million exploit due to a sudden contract upgrade by the deployer account. This upgrade allowed the withdrawal of multiple tokens, including Binance-Pegged Bitcoin and USD Coin.

4. 📈Technical Analysis Masterclass - The SEC is deliberating whether to classify Ether (Ethereum) as a security or a commodity. Dive deeper and watch UseTheBitcoin’s latest Youtube video “SEC is exploring grounds to deny spot Ether ETFs” to know the possible implications if Ethereum is classified as a security and know what to do next!

5. 💡Feature of the Day - Sonne Finance Exploited: Decentralized lending protocol Sonne Finance experienced a $20 million exploit due to a vulnerability in Compound v2 forks, allowing a "donation attack." The protocol paused all markets on Optimism but kept those on Base operational.

   
   All this and more in today’s headlines!

📰 News Highlights:

🚀GameStop Meme Coins Surge on Solana [Source][Source][Source][Source]

On Sunday, Keith Gill, known for his role in the 2021 GameStop stock rally, made a surprising return, sparking a wave of meme coin activity on the Solana blockchain. Gill, also known as Roaring Kitty, posted a meme on Twitter that led to the deployment of over 14,500 new tokens on Solana via the pump.fun protocol.

These tokens included names like GME Stonks, GameOver, and KiethGillWifHat. The sudden influx marked the busiest day for pump.fun, which allows users to create meme coins for a mere 0.02 SOL (about $3).

Pump.fun saw continued activity into Monday, with an additional 7,400 tokens created by midday. The platform acknowledged both the excitement and the risks associated with meme coins, such as the potential for rug pulls.

The team even humorously invited Gill to launch his own coin, referencing his popular online persona. Since its launch in January, pump.fun has generated significant revenue, accumulating around 127,000 SOL ($19 million) in gas fees from over 512,000 token deployments.

Gill’s reappearance and the ensuing meme coin frenzy also affected GameStop’s stock, which saw trading halts due to surges linked to his influence.

🎲Cypher Protocol Contributor Steals and Gambles Funds [Source][Source][Source]

In a startling admission, an anonymous core contributor to the Solana-based Cypher Protocol confessed to stealing and gambling away approximately $260,000. The contributor, known as "hoak," shared a public statement on May 14, revealing that the funds were taken from a redemption contract set up to recover losses from a $1 million exploit in August 2023.

Hoak admitted the theft was driven by a severe gambling addiction and other psychological issues. They expressed remorse, acknowledging that their actions had deeply impacted the project and their personal life. Another Cypher contributor, "Barrett," highlighted the betrayal, noting that hoak had stayed on the project post-exploit to help with recovery, only to later misappropriate funds.

The August 2023 exploit saw Cypher Protocol lose $1 million worth of Solana and USD Coin.

🔍Alex Bridge Exploit Drains $4.3M [Source][Source]

The Alex protocol bridge on the BNB Smart Chain network suffered a significant exploit on May 14, resulting in $4.3 million in losses.

Blockchain security firm CertiK reported that the breach occurred following a sudden contract upgrade by the deployer account, which altered the bridge's implementation address, allowing the withdrawal of multiple tokens, including Binance-Pegged Bitcoin, USD Coin, and Sugar Kingdom Odyssey (SKO).

The suspicious upgrade, which involved unverified bytecode, led to the transfer of assets to an unknown address. CertiK labeled the event as a "possible private key compromise." The attacker attempted similar actions on Ethereum, but these efforts were unsuccessful due to transaction errors.

📈Technical Analysis Masterclass:

⚖️SEC is exploring grounds to deny spot Ether ETFs

The SEC is deliberating whether to classify Ether (Ethereum) as a security or a commodity. This classification will significantly impact the potential for an Ethereum ETF.

Implications of Security Classification:

• Stricter Regulations:

  • Classifying Ethereum as a security would impose stricter regulations, including rigorous disclosure requirements and investor protections.

• Tax Treatments:

  • Different tax treatments and reporting requirements for securities could affect Ethereum's attractiveness to investors.

• Operational Adjustments for ETF Providers:

  • ETF providers would need to adjust their operations to comply with securities regulations, potentially incurring additional costs and complexities.

• Increased Regulatory Scrutiny:

  • The process of launching and maintaining an Ethereum ETF could become more complicated under increased regulatory scrutiny.

Technical Analysis:

1. Current Position Below Fibonacci Levels:

   • Ethereum is currently trading below the Fibonacci levels, indicating significant selling pressure.

   • Hope exists for Ethereum to bounce back and consolidate within the Fibonacci areas; otherwise, a further decline towards the 200-day Moving Average (MA) is possible.

2. Potential Bullish Flag Pattern:

   • Despite current pressures, a bullish flag pattern is forming.

   • Approval of the Ethereum ETF could catalyze a market rebound, with investors waiting for this approval to pump the market back up.

The SEC's decision on whether to classify Ether as a security or a commodity is pivotal. Dive deeper and watch UseTheBitcoin’s latest Youtube video “SEC is exploring grounds to deny spot Ether ETFs” to know the possible implications if Ethereum is classified as a security and know what to do next! For more insider Alpha, join our Discord Channel!

💡 Feature of the Day: 

🔒Sonne Finance Exploited [Source][Source][Source]

Decentralized lending protocol Sonne Finance reported a significant exploit on May 15, resulting in a $20 million loss. The incident, which involved a vulnerability in Compound v2 forks, allowed the attacker to execute a "donation attack." Sonne Finance promptly paused all markets on Optimism but kept those on Base operational.

The exploit was first flagged by blockchain security firm PeckShield, which advised Sonne to check their timelock contract.

The attacker exploited transactions scheduled due to a recent proposal to add VELO markets to the protocol.

Sonne acknowledged the issue 25 minutes after the exploit, emphasizing their readiness to offer a bounty in exchange for the return of the stolen funds.

😂 Crypto Meme of the Day: 

Disclaimer: Tweet is not Real. (Inverse Cramer Quirky Spirit Lives On!)

And that’s it for this today.

With all of the recent hacks taking place, remember to protect your crypto assets with today’s sponsor Trezor hardware wallets.

See you all tomorrow’s edition!

Jonathan Gibson
UseTheBitcoin.com