Binance, Coinbase goes to court; SEC labels 67 crypto-securities
Top stories this week
US SEC Sues Binance and Coinbase Amid Crypto Crash
Binance and Coinbase have been targeted in a new round of US Securities and Exchange Commission (SEC) lawsuits against crypto companies. The regulator pressed 13 charges against Binance on June 5, including those involving unregistered token offerings and sales, and failure to register as an exchange or broker-dealer. The commission also went after Coinbase on similar grounds, arguing that popular cryptocurrencies offered by the exchange are securities. Trading volume across the major decentralized exchanges jumped 444% in the hours following the legal actions. In the six months following FTX̵[ads1]7;s bankruptcy, the SEC’s crypto-related enforcement actions increased by 183%.
SEC Lawsuit: 67 cryptocurrencies are now considered securities by the SEC
The total number of cryptocurrencies that the US securities regulator has labeled as a “security” has now reached an estimated 67, after adding a few more to the list in the lawsuit against crypto exchanges Binance and Coinbase. In its case against Binance, the SEC introduced 10 cryptocurrencies into the securities classification, while it named 13 cryptocurrencies in the Coinbase suit. The “security” label now applies to over $100 billion in the market, or about 10% of the total crypto market cap of $1.09 trillion.
The Coinbase CEO’s stock sale likely wasn’t scheduled to happen a day before the SEC suit
Coinbase CEO Brian Armstrong sold the company’s shares the day before the SEC lawsuit against the exchange. The transaction caused a minor uproar in Twitter crypto, as Armstrong avoided a heavy loss by doing so. SEC records show that Armstrong sold 29,730 shares of the company on June 5, the day before the SEC filing. Armstrong has been selling Coinbase shares regularly since November under a 10b5-1 plan adopted in August, which determines the timing and size of transactions in advance. The net worth of Armstrong and Binance CEO Changpeng Zhao has taken a big hit because of the suits. Within 30 hours, Armstrong’s net worth dropped by $289 million and Zhao’s by $1.33 billion.
Binance.US suspends USD deposits, warns of fiat withdrawal pause
Binance.US has suspended US dollar deposits and announced an upcoming hiatus for fiat withdrawals as early as June 13. According to the exchange, it was forced to take action amid “extremely aggressive and intimidating tactics” by US regulators. Crypto trading, betting, deposits and withdrawals remain fully operational. Binance.US also removed eight Bitcoin pairs and two BUSD pairs while noting that OTC Trading Portal services were paused.
June 2023 has proven to be a turbulent month for cryptocurrency exchanges in America. Crypto.com will no longer serve institutional clients in the US after announcing the suspension of service effective June 21. The Singapore-based cryptocurrency exchange cited limited demand from institutional clients as a primary reason for the move, which has been exacerbated by testing prevailing market conditions. US retail users still have access to cryptocurrency derivatives trading and the UpDown Options offering.
Winners and losers
At the end of the week, Bitcoin (BTC) is at $26,449Ether (ETH) on $1837 and XRP on $0.53. The total market value is at $1.1 trillion, according to CoinMarketCap.
Among the top 100 cryptocurrencies, the top three altcoin winners of the week are the Terra Classic (GONE) at 17.73%, XRP (XRP) at 2.40% and stacks (STX) of 2.39%.
The top three altcoin losers of the week are Sui (SUI) at -22.08%, Conflux (CFX) at -20.97%, and Flare (FLR) of 20.57%.
For more info on crypto prices, be sure to read Cointelegraph’s market analysis.
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Most memorable quotes
“The SEC does not make the law. This approach to regulation is indeed unacceptable, but it is what we have come to expect from the SEC and its anti-crypto stance.”
Christine SmithCEO of the Blockchain Association
“We are proud to represent the industry in court to finally bring some clarity to crypto regulations.”
Brian ArmstrongCEO of Coinbase
“We believe that blockchain and Web3 technologies have enormous potential to transform a wide range of industries and prepare them for the future.”
Lars RensingCEO of Protokol
“[Gary Gensler] opened up this year, in 2023, with all these enforcement actions; I think it looks like CYA [cover your ass] to me.”
French HillUnited States representative
“When regulation doesn’t meet new technology where it belongs, the United States loses its competitive edge over other countries.”
Ryan Wyattpresident of Polygon Labs
“We believe that capital market information will be completely different in a few years, and it’s our job to lead the revolution.”
Ittai Ben ZeevMoreCEO of the Tel Aviv Stock Exchange
Prediction of the week
Bitcoin Price May Gain 60% If ‘Textbook’ Chart Pattern Confirms — Trader
Bitcoin could be in line for a 60% upside if a long-term chart function remains intact. Popular pseudonymous trader Mikybull Crypto flagged encouraging signs on the weekly BTC/USD chart, claiming that it shows the pair completing and now testing an inverse head-and-shoulders pattern.
“Bitcoin is showing a textbook inverted head and shoulders on the weekly TF. Price is currently retesting its neck after the breakout,” Mikybull Crypto explained, before adding that “if the head-to-neck gap is usually the sprint, we expect another 60 % rally on BTC.”
The 60% “sprint” will place BTC/USD at around $40,000.
FUD of the week
US Bitcoin supply fell over 10% in the past year – Glassnode
Bitcoin left the US during the bear market in 2022, new research from research firm Glassnode in the chain. The latest analysis of the Bitcoin supply shows a global migration away from the US and towards Asia. Since mid-2022, the amount of supply held and traded by US entities has declined by more than 10%. At the same time, Europe’s share has remained roughly the same, which means a redistribution from west to east. The year-over-year supply change shows that the US stock starts falling in March 2021, but accelerates from May this year.
Gary Gensler: The crypto market is like the stock market of the 1920s, full of “scammers”
During a speech this week, US SEC Chairman Gary Gensler compared the current crypto market to the stock market of the 1920s, saying it is full of “hucksters”, “swindlers” and “Ponzi schemes”. Just as Congress cleaned up the stock market by passing securities laws in the past, the current SEC can also clean up the crypto market using those laws, he argued. Gensler has been heavily criticized within the crypto industry, especially since the SEC filed lawsuits against crypto exchanges Binance and Coinbase. Critics say he takes an overly expansive view of the SEC’s regulatory authority and is driving innovation out of the United States
GameStop fires CEO Matt Furlong months after canceling crypto push
GameStop has fired its CEO Matt Furlong, the executive responsible for launching the company’s push into NFTs. The news came alongside GameStop’s first-quarter earnings call, which reported earnings per share that missed market expectations by more than 133%. The company did not give a reason for Furlong’s dismissal. He will be succeeded by billionaire investor Ryan Cohen. GameStop launched its NFT marketplace in June 2022 with nearly $2 million in sales in the first 24 hours. By August, however, daily sales volumes had fallen below $4,000, a 99.8% drop from the opening day.
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