The Last Fortnight in Crypto - June (Part 1)
LATEST NEWS
SEC Sues Binance, Coinbase in Landmark Crypto Crackdown
The Securities and Exchange Commission (SEC) filed lawsuits against two of the world's largest cryptocurrency exchanges, Binance and Coinbase, on Tuesday. The lawsuits allege that the exchanges violated securities laws by selling unregistered securities.
The SEC's lawsuit against Binance is the first time the agency has gone after a major cryptocurrency exchange. The lawsuit alleges that Binance failed to register with the SEC as a securities exchange and that it allowed users to trade unregistered tokens.
The SEC's lawsuit against Coinbase is the latest in a series of enforcement actions against the exchange. In 2020, the SEC fined Coinbase $60 million for failing to register with the agency as a broker-dealer.
The SEC's lawsuits against Binance and Coinbase are a sign of the agency's growing focus on cryptocurrency regulation. The agency has said that it believes that many cryptocurrencies are securities and that they should be subject to the same rules and regulations as other securities.
The lawsuits are also a sign of the growing pains that the cryptocurrency industry is facing. As the industry grows, it is attracting more attention from regulators around the world. The SEC's lawsuits are a reminder that cryptocurrency companies will need to comply with securities laws if they want to operate in the United States.
The lawsuits are likely to have a significant impact on the cryptocurrency industry. They could lead to more cryptocurrency exchanges being forced to register with the SEC and could make it more difficult for cryptocurrency companies to raise money from investors. The lawsuits could also lead to more volatility in the cryptocurrency market as investors become more uncertain about the regulatory environment.
SEC and Binance Seek Compromise on US Assets Freeze
The Securities and Exchange Commission (SEC) and Binance have reached a tentative agreement to allow Binance.US to continue operating in the United States, but with some restrictions. Under the proposed agreement, Binance.US would have to transfer all US-based assets to new wallets and would not be allowed to offer certain services, such as margin trading. Binance CEO Changpeng Zhao would also be prohibited from having access to any BAM Trading or Binance.US assets. The court has not yet approved the proposed agreement.
A lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Binance and Coinbase has shed light on the full list of cryptocurrencies that could be considered securities by the regulator. The list includes some of the most popular cryptocurrencies in the world, such as Bitcoin, Ethereum, and Tether.
The SEC's lawsuit alleges that Binance and Coinbase violated securities laws by selling unregistered securities. The regulator claims that the two exchanges allowed users to trade tokens that were investment contracts, which are considered securities under U.S. law.
The list of cryptocurrencies that could be considered securities by the SEC is based on the Howey test, which is a legal test that determines whether an investment is an investment contract. The Howey test has four factors:
- An investment of money.
2. In a common enterprise.
3. With a reasonable expectation of profits to be derived from the efforts of others.
4. With the investment being in a security.
The SEC has argued that all four factors are met for many of the cryptocurrencies that are traded on Binance and Coinbase. For example, investors put money into these cryptocurrencies with the expectation of making a profit. The profits are derived from the efforts of others, such as the developers of the cryptocurrency. And the cryptocurrencies are considered securities because they represent an investment in a company or project.
The SEC's lawsuit is still ongoing, and it is unclear how the courts will rule. However, the lawsuit has raised concerns among investors about the regulatory status of cryptocurrencies. It is possible that the SEC could take action against other cryptocurrency exchanges in the future.
Crypto.com to Shut Down U.S. Crypto Exchange After SEC Lawsuits Target Industry
Crypto.com, a major cryptocurrency exchange, announced on June 13 that it will be shutting down its U.S. exchange. The company cited "limited demand" for its services as the reason for the closure.
The closure comes amid a crackdown on cryptocurrency exchanges by the U.S. Securities and Exchange Commission (SEC). In recent months, the SEC has brought lawsuits against several cryptocurrency exchanges, alleging that they have violated securities laws.
The SEC's actions have raised concerns about the future of cryptocurrency regulation in the United States. Some experts have warned that the SEC's aggressive enforcement could stifle innovation in the cryptocurrency industry.
Crypto.com's closure is a major blow to the cryptocurrency industry. The company was one of the largest cryptocurrency exchanges in the world, with over 10 million users. Its closure is likely to further dampen investor sentiment in the cryptocurrency market.
Australia's Commonwealth Bank to Partially Restrict Payments to Crypto Exchanges
Australia's largest bank, Commonwealth Bank, will partially restrict payments to cryptocurrency exchanges. The bank says the move is to protect customers from scams and other risks associated with cryptocurrency. Under the new rules, customers will be able to make payments to cryptocurrency exchanges, but the bank will review these payments and may hold them for up to 24 hours. The bank also plans to introduce a monthly limit of 10,000 Australian dollars ($6,700) on payments to cryptocurrency exchanges.
The move by Commonwealth Bank is the latest sign of growing concern about the risks associated with cryptocurrency. In recent months, there have been a number of high-profile scams involving cryptocurrency, and regulators around the world have been stepping up their scrutiny of the industry.
The restrictions imposed by Commonwealth Bank are likely to be met with resistance from some cryptocurrency enthusiasts. However, the bank argues that the measures are necessary to protect its customers.
Binance US Market Shrinks 78% in Just 7 Days After SEC Lawsuit
In the wake of the Securities and Exchange Commission's (SEC) lawsuit against Binance, the US-based sister company of the world's largest crypto exchange, Binance US, has seen its market depth plunge by nearly 80%.
Data from crypto data firm Kaiko shows that the average daily trading volume on Binance US has fallen from $1.1 billion on May 17 to just $250 million on May 24. This represents a decline of 78% in just seven days.
The SEC's lawsuit alleges that Binance CEO Changpeng Zhao commingled customer funds through a "web of deceit." The SEC is seeking to stop Binance from operating in the US and to force it to return all funds that it has commingled.
Binance has denied the allegations in the SEC's lawsuit and has vowed to fight the charges. However, the lawsuit has already had a significant impact on Binance US. The exchange's market depth has plunged, and its trading volume has fallen by more than half.
It remains to be seen how the SEC's lawsuit will ultimately affect Binance US. However, the recent decline in the exchange's market depth and trading volume is a sign that investors are losing confidence in the exchange.
https://t.co/pup2WYms9R market depth is down a whopping 78% since the SEC lawsuit 👀
— Kaiko (@KaikoData) June 12, 2023
Market makers vacated instantly, leaving hardly any #liquidity. pic.twitter.com/EvoO778mAy
Bitcoin Football Club: Peter McCormack's Real Bedford Puts BTC on the Map
British entrepreneur Peter McCormack bought Bedford FC in 2021 and rebranded it as Real Bedford, with the team's shirts and logos featuring the Bitcoin logo. McCormack has also been hosting Bitcoin meetups before games and inviting key opinion leaders in the Bitcoin community to watch games. The club has been successful on the field, winning promotion to the Southern League Premier Division Central in May 2023. McCormack hopes that Real Bedford can use its success to promote Bitcoin to a wider audience.
SEC Has 120 Days to Respond to Coinbase Crypto Clarity Complaint
The U.S. Securities and Exchange Commission (SEC) has 120 days to respond to a complaint filed by Coinbase, the largest U.S.-based cryptocurrency exchange. The complaint, filed in April, seeks to compel the SEC to publicly disclose its stance on a petition submitted several months prior. In the petition, Coinbase posed 50 specific questions about the regulatory treatment of certain digital assets.
The SEC has not yet responded to the complaint. However, Coinbase CEO Brian Armstrong has said that he is confident that the court will rule in the exchange's favor.
The outcome of this case could have a significant impact on the future of cryptocurrency regulation in the United States. If the SEC is forced to publicly disclose its stance on digital assets, it could provide much-needed clarity for the industry. This could lead to increased investment and innovation in the space.
1) they repeat the fallacy that they haven't made any decision on new crypto rules; 2) they refuse to commit to any deadline despite the Court's explicit order; 3) they instead "anticipate" making a "recommendation" in 120 days; and most importantly... 2/5
— paulgrewal.eth (@iampaulgrewal) June 13, 2023
SEC Chair Gary Gensler Says Bitcoin and Ethereum Are Not Securities in 2018 Video
Chair Gensler in 2018 at a Bloomberg conference in NYC:
— Ryan Selkis 🪳 (@twobitidiot) June 12, 2023
“Bitcoin. Ether. Litecoin. Bitcoin Cash. Why did I name those four? They’re not securities.”
What’s Goldman Gary going to say about this one? Deep fake? pic.twitter.com/p7DJlYkJIt
A newly resurfaced video from 2018 shows current SEC Chair Gary Gensler saying that Bitcoin (BTC) and Ethereum (ETH) are not securities. In the video, Gensler, who was then a professor at MIT, is speaking at a conference on blockchain technology. He says that "three-quarters of the market is not ICOs or not what would be called securities," and that Bitcoin, Ethereum, Litecoin, and Bitcoin Cash are all "non-securities."
Gensler's comments in the video are in contrast to his more recent statements on cryptocurrencies. As SEC Chair, Gensler has said that he believes that most cryptocurrencies are securities, and that they should be regulated by the SEC. However, Gensler has also said that he is open to working with the cryptocurrency industry to develop a more tailored regulatory framework.
The video has reignited the debate over whether cryptocurrencies are securities. Some argue that cryptocurrencies are not securities because they are not investments in companies. Others argue that cryptocurrencies are securities because they are investments in the underlying technology.
The SEC has not yet taken any enforcement action against Bitcoin or Ethereum. However, the agency has brought enforcement actions against other cryptocurrencies, such as Ripple Labs' XRP token.
It remains to be seen how the SEC will regulate cryptocurrencies in the future. Gensler's comments in the video suggest that he is open to a more flexible approach to regulation. However, it is also possible that the SEC will take a more aggressive approach, particularly against cryptocurrencies that are seen as being more similar to traditional securities.