According to a CertiK Report: CertiK has uncovered a series of critical vulnerabilities in Kraken's exchange systems that could potentially lead to hundreds of millions of dollars in losses. These findings were made following an in-depth investigation into Kraken's deposit system and security protocols.

- Critical Vulnerabilities: CertiK identified several vulnerabilities within Kraken’s systems, including a failure to differentiate between different internal transfer statuses in the deposit system.
- Major Security Breaches: Through rigorous testing, CertiK found that Kraken’s defences were compromised on multiple fronts. Key testing questions included whether a malicious actor could fabricate deposit transactions, withdraw fabricated funds, and evade risk controls when making large withdrawal requests.
 
Testing Results:

- Failed Security Tests: Kraken failed all tests undertaken by CertiK, revealing severe weaknesses:
 - Fabricating Deposits: Malicious actors could deposit millions of dollars into any Kraken account without detection.
 - Withdrawing Fabricated Funds: Fabricated funds worth over $1 million could be withdrawn and converted into valid cryptocurrencies.
 - Lack of Alerts: No security alerts were triggered throughout the multi-day testing period. Kraken only responded and locked test accounts days after the vulnerabilities were officially reported.

Kraken’s Response:

- Critical Classification: Kraken's security team classified the vulnerabilities as Critical, the most serious classification level within the exchange.
- Initial Remediation Efforts: After the vulnerabilities were reported, Kraken took steps to address and fix them.
- Controversial Reaction: Kraken’s security team allegedly threatened individual CertiK employees to repay a mismatched amount of cryptocurrency within an unreasonable timeframe, without providing appropriate repayment addresses.

Public Disclosure:

In light of these issues, CertiK has decided to go public with the findings to ensure transparency and user security. The Web3 community needs to be aware of these vulnerabilities and the potential risks posed.

CertiK Statement: 
"In the spirit of transparency and our commitment to the Web3 community, we are going public to protect all users' security. We urge Kraken to cease any threats against whitehat hackers. Together, we can face risks and safeguard the future of Web3."

CertiK’s findings highlight significant security vulnerabilities within Kraken’s exchange systems, posing a potential risk to millions of dollars in user funds. As the situation unfolds, the community and stakeholders must stay vigilant and prioritize security measures to protect the integrity of the Web3 ecosystem.

Ethereum (ETH) is down 1% on Wednesday following reports that the Securities & Exchange Commission (SEC) could approve spot ETH ETFs on July 4. Meanwhile, brokerage and financial services firm, StoneX, predicted ETH to see a 40% gain in two months after ETH ETFs go live.

The SEC could approve spot ETH ETFs by July 4, citing sources from industry insiders.

The report stated that the SEC could give the greenlight on July 4 "as talks between asset managers and regulators enter the final stages, industry executives and other participants told Reuters." The July 4 prediction aligns with earlier speculations from Bloomberg analyst Eric Balchunas, who speculated that ETH ETFs might launch around July 2.

Prospective spot ETH ETF issuers filed their amended S-1 registration statements with the SEC last week following comments from the agency. The SEC approved issuers' 19b-4 applications on May 23 but also needs to greenlight their S-1s before ETH can begin trading.

A recent analysis by StoneX predicts that the launch of spot Ethereum ETFs could trigger a 40% growth in ETH's price two months after they go live. In a wider time frame, StoneX's model predicts that ETH's price will be between $2,142 and $12,621 over the next two years.

The company mentioned that its "conservative" predictions are due to the belief that NFTs won't see more mainstream attention as they did in 2021. The analysis also suggested that video games and real-world assets (RWA) — which many believe will boost TVL and user adoption — may not see tangible growth.

The StoneX analysis follows Bloomberg analyst Eric Balchunas's suggestion that ETH ETFs will capture lower net flows than Bitwise CIO Matt Hougan predicted because "ETH futures ETF were a borderline flop."

Hougan predicted that spot Ethereum ETFs will attract up to $15 billion in net flows by the end of 2025. He arrived at the $15 billion figure by analyzing Ethereum's relative market cap compared to Bitcoin, international crypto ETFs volume, Grayscale Ethereum Trust conversion, and the Bitcoin "carry trade."

Yeah, I thought about that. It's a fair question.

The largest ETH futures ETF (EETH) is only ~5% the size of the largest BTC futures ETF (BITO). I didn't adjust things downwards for two primary reasons:

1) My gut just says futures products are different;

2) At Bitwise, our…

Meanwhile, SEC Chair Gary Gensler commented in a Bloomberg event on Tuesday that the process of launching spot Ethereum ETFs is "going smoothly." He stated that the products going live depend on asset managers making full disclosures in their registration statements.

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