Citron Research, a leading research firm and short seller, explain Why ethereum (ETH) could be the worst victim of a new U.S. regulatory attack on the crypto industry.
Ethereum by Citron Research criticize When New York Prosecutors Sue KuCoin
In a recent Twitter thread, Citron Research experts predicted that ETH could be in trouble when the New York Attorney General files a lawsuit against centralized exchange KuCoin. The reason given was that KuCoin was involved in the sale of unregistered securities, of which ETH was one.
Citron Research highlighted that ETH’s security status has become more apparent as the network transitions to a PoS consensus mechanism and replaces mining with staking. Ethereum has failed to deliver on its promise of a “decentralized web,” researchers say. Instead, it becomes a full-fledged investment vehicle and is taxed and regulated accordingly.
Therefore, ETH should be better off with companies than “alternative” systems like Bitcoin. If we compare ETH to OpenAI (the company that produces ChatGPT in the US) by approximate market capitalization, ETH is worth about $350. At press time, the top altcoin is trading at $1,428. If Citron Research’s outlook turns out to be correct, the price would drop by 75%.
As previously reported, Citron Research is a strong critic of cryptocurrencies: they criticize ETH in 2022 and compare it to the collapsed exchange FTX. Also, the Grayscale Bitcoin Trust (GBTC), one of the most hyped investment vehicles of the previous bull run, hasn’t shied away from the market either.
ETH or OpenAI, Lululemon, Chipotle and Twitter?
When regulators look into ethereum’s internal processes, they’ll find that it’s a regular “ICO,” not a “smart contract.”
“When the AG analyzed the Ethereum network, we assumed their secrecy was as bad as any shady group: self-dealing, shady ICO deals, repeated attempts to evade federal tax and securities laws, all by a small group control under the guise of centralization”
Additionally, Citron Research considers Vitalik Buterin’s recent philanthropic initiatives to be questionable: possibly involving tax evasion, and looking a lot like FTX’s patented “effective altruism.”
To demonstrate just how ridiculous Ethereum’s current market cap is, Citron Research highlights that it’s bigger than OpenAI, Lululemon, Twitter, and Chipotle combined, or equal to Disney.
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According to today’s headlines