Former Head of SEC Enforcement Division Warns Cryptocurrency Investors of Need to Get Off Crypto Platforms
Former head of the SEC’s Division of Enforcement, John Reed Stark, has issued a warning to cryptocurrency investors, urging them to “Exit Crypto Platforms Now”. He highlighted the lack of protections for customers and the exchanges’ failure to comply with US laws and regulations. Stark emphasized the importance of complying with regulations for the development and recognition of the crypto industry. Regulatory concerns and falling trading volumes on centralized exchanges have led many investors to look to decentralized solutions. The SEC has stepped up its enforcement efforts in the crypto sector in recent months.
Regulatory pressure in the US could affect cryptocurrency exchanges and favor Ethereum, according to JPMorgan
US cryptocurrency exchanges including Coinbase (NASDAQ:COIN) and Binance.US could face regulatory pressure to register with the agency, according to strategists at JPMorgan (NYSE:JPM). The SEC recently sued these exchanges for alleged violations of US securities laws. Strategists noted that while this could make the crypto industry more onerous, it could also bring more transparency and investor protection. The SEC has categorized several tokens as securities, which could benefit Ethereum by increasing its dominance in the smart contract blockchain space. JPMorgan commented specifically on Binance Coin’s rating (COIN:BNBUSD) as a security, saying that in an unlikely scenario where Binance would collapse, the BNB token could still retain some value as long as the BNB chain remains operational. “ This assumption is far from given, as the Binance exchange is currently at the heart of the [BNB] blockchain ”, the strategists noted.
SEC Lawsuits Against Binance, Coinbase Impact Crypto Market, Affect Gaming-related Tokens
SEC lawsuits against cryptocurrency exchanges Binance and Coinbase are impacting the crypto market. Gaming-related tokens such as CHZ, SAND, MANA, FLOW and AXS saw double-digit losses of up to 28%. However, Nexo’s native token (COIN:NEXOUSD) showed resistance, falling 13.24% over the last month. Cardano (COIN:ADAUSD) also recovered slightly, while Solana (COIN:SOLUSD) struggled. The cryptocurrency market as a whole has seen dips and net outflows following the lawsuits, and the future regulatory impact is still uncertain.
Cryptocurrency Trading Volume on Robinhood Drops in May
In May, cryptocurrency trading volume on Robinhood (NASDAQ:HOOD) dropped 43% compared to April. Compared to the same month last year, the drop was 68%, from US$ 6.6 billion to US$ 2.1 billion. Despite this, trading of stock and option contracts has increased. The platform also saw a decrease in the number of monthly active users, but an increase in assets under custody.
Depth of Market on Binance Decreases Significantly After SEC Proceeding
Since the announcement of the SEC lawsuit against Binance.US, market depth on the exchange has plummeted by 78% across the top 25 crypto assets, leading to market maker exits and concerns over liquidity, according to the data firm. Kaiko cryptography. This can affect traders’ ability to execute orders efficiently. Binance’s net outflow of funds has also increased, although Binance CEO Changpeng Zhao questions these numbers.
Fund outflows from cryptocurrency investment products increase due to regulatory uncertainty and interest rates
Last week saw the largest outflow of funds from Ethereum exchange-traded products (ETPs), totaling $36 million. That was the largest single-week withdrawal since the Ethereum (COIN:ETHUSD) merger in September 2022. Despite this, Ethereum ETPs fared better than Bitcoin investment products (COIN:BTCUSD), which had departures for the eighth consecutive week. Total outflows of digital asset investment products reached $88 million last week, due to uncertainty regarding monetary policy and rising interest rates. “ We believe, as we did last year, that this is related to monetary policy, with no clear end in sight to interest rate hikes, making investors wary”, explained CoinShares.
Taxbit lays off 40% of its staff
Cryptocurrency tax compliance software company Taxbit has laid off 40% of its staff, around 80 people, as it looks to expand its UK and EU operations. Co-founder and CEO Austin Woodward stepped down and was replaced by Lindsey Argalas. “ I am honored to be in this position. Ultimately, we are a software company solving a complex tax and accounting need ,” she said of her appointment, according to Forbes. Crypto companies face regulatory pressure and tax challenges, and Taxbit provides services in this field for clients such as PayPal (NASDAQ:PYPL), Google (NASDAQ:GOOGL), Fidelity and Ralph Lauren (NYSE:RL). The crypto industry as a whole has faced layoffs and regulatory setbacks in recent months, including Coinbase and Kraken.
IOG lays off employees and adopts smaller business model to become a “risk studio”
Input Output Global (IOG), developer of Cardano (COIN:ADAUSD), has laid off employees as it undergoes a restructuring to become a “venture studio” with a smaller business model. IOG co-founder Charles Hoskinson explained that they are consolidating and eliminating redundant or irrelevant groups. The new model will include several spin-offs such as a wallet division and an identity structure. IOG has hired CEOs for other companies and expects to spin off 3-5 companies a year in the future. IOG did not provide details on the eliminated functions. “ In the long term, I expect 3 to 5 companies a year to be spun off. Under this model, things like strategy and commercial are not monolithic, they are pushed to spinouts under CEOs ”, Hoskinson said.
21Shares launches high risk ETP with exposure to Lido DAO
21Shares has launched an exchange-traded product (ETP) that provides exposure to Lido DAO, the largest player in the net staking ecosystem. ETP is available in several European Union countries and is classified as high risk. Lido has over $13 billion in staked ETH and holds 76% market share in net stake derivatives on Ethereum. “ We classify this product as class 7 of 7, which is the highest risk class. This rates potential future performance losses at a very high level, and poor market conditions are very likely to affect the fund’s ability to pay you “, 21Shares said in a key product information document.
Andreessen Horowitz plans to open UK office in response to increased US regulation
Renowned US venture capital firm Andreessen Horowitz (a16z) plans to open its first international office later this year. This expansion reflects the growing trend of US companies looking for opportunities beyond domestic borders. With increasing regulation in the US, a16z’s move can be seen as a strategic response. The choice of the UK as the office location was based on discussions with key stakeholders and the enabling environment for blockchain technology. a16z will also launch a crypto startup school in London. “We are excited to open our first international office in a jurisdiction that welcomes blockchain technology and is committed to creating a predictable business environment, pursuing regulations that embrace web3 and protect consumers”, said Chris Dixon, managing partner of Andreessen Horowitz.
Hong Kong Invites Coinbase and Other Cryptocurrency Firms to Set Up Operations in the Financial Hub
Coinbase is being drawn to Hong Kong due to the region’s progressive stance towards cryptocurrencies. Johnny Ng, an influential lawmaker, extended an invitation on Twitter to Coinbase and other virtual asset trading companies to establish operations in the bustling financial hub. This invitation highlights Hong Kong’s commitment to the crypto industry and hints at equity listing opportunities. With the recent regulatory processes in the US, this opportunity gains urgency and interest. Hong Kong is striving to become a leading digital hub for cryptocurrencies, fostering an enabling environment and attracting international interest.
Binance Ordered to Shut Down Operations in Nigeria by the Nigerian SEC
Binance has been ordered by the Securities and Exchange Commission (SEC) of Nigeria to shut down its operations in the country. The SEC has declared Binance’s operations “illegal” as it is neither registered nor regulated by the commission. Nigeria’s central bank had already banned cryptocurrency transactions in 2021. The SEC warned investors about the risks of investing in crypto assets and threatened to take further regulatory action against Binance and other exchanges in the country.
Tether Sends $750M to Binance Amid Regulatory Battles
On June 12, the Tether treasury (COIN:USDTUSD) sent $750 million worth of USDT to Binance in three transactions worth $250 million. Tether also announced the minting of 1 billion USDT tokens on the Ethereum blockchain. These moves come amid the regulatory battles facing Binance, with the SEC suing the exchange and freezing the assets of its US subsidiary.
Stablecoins gain popularity in Turkey due to economic instability
As Turkey’s economy continues to struggle with the falling lira, investors are seeking refuge in cryptocurrency. Local demand for stablecoins such as Tether has increased, highlighting their popularity as a means of protecting capital. Turkish citizens are turning to these cryptocurrencies due to economic instability and the devaluation of the lira. Turkey has the highest rate of ownership of digital currencies in the world, reflecting the search for alternatives due to capital controls and the difficulty in acquiring foreign currencies. “People, whether on the retail or institutional side, are thinking about how we can hedge against currency devaluation. They want to potentially hold additional assets pegged to a stronger currency, so things like USDC or USDT or anything pegged to a stronger currency like the US dollar ”, said Ehab Zaghloul, research scientist at Tribal Credit, a digital payments platform for startups in emerging markets.
University of Toronto teams up with Ripple to launch standalone XRP ledger validator
The University of Toronto plans to launch an independent XRP ledger validator in partnership with Ripple (COIN:XRPUSD). This initiative is part of Ripple’s University Blockchain Research Initiative (UBRI) in Canada, which seeks to support blockchain and cryptocurrency research. The university joins UBRI’s other Canadian partners as Ripple continues to expand its presence in the region to support the next generation of leaders in cryptocurrencies and Web3 technologies. The initiative also highlights Canada’s favorable regulatory approach towards the crypto industry. “ Ripple continues to expand its presence in the region to support the next generation of leaders in crypto, blockchain and Web3 through strategic partnerships and funding for these universities”, said Eric van Miltenburg, Senior Vice President of Strategic Initiatives at Ripple.
Curve Finance Founder Deposits Tokens on Aave to Reduce Liquidation Risk
Michael Egorov, founder of Curve Finance, deposited $24 million in Curve DAO tokens (COIN:CRVUSD) on the decentralized lending platform Aave to reduce the settlement risk of a $65 million stablecoin loan. The value of collateral and the health fee will be affected if the CRV price continues to fall. Aave has liquidated bad debt positions in the past.
Chorus One enters the Urbit network hosting provider camp
Chorus One, a multi-chain staking service provider, is entering the Urbit network hosting provider field. The hosting platform called Red Horizon is the first foray by a major blockchain player or technology that wasn’t originally building within the Urbit ecosystem. The hosting service is ideal for the general public, DAOs and communities interested in a decentralized alternative. Chorus One envisions a high usage potential for Urbit and sees hosting as a natural progression from its existing services. “ We are anticipating that Urbit itself will be a product that many people will want to use. Hosting was an obvious place to go ”, said Lieberman, who goes by ~tiller-tolbus on Urbit.
Census launches cryptocurrency custody service
Census, a cryptocurrency custodian, has launched a mobile phone-based self-custody solution, which it claims is easier to use and cheaper than existing technologies. Its “decentralized key management” approach eliminates the complexity and high costs of multiparty computing (MPC), a common technology in institutional cryptocurrency escrow. The Census solution uses secure hardware enclaves present on mobile devices, providing decentralized key management and full control for organizations. The technology can be applied in various situations that require coordination of multiple signatories. “ If you are an organization that requires key management, you tend to turn to a third-party MPC service provider – Fireblocks, Copper etc”, said CEO Andrew Lawrence.
Attacker with 900,000 BNB threatens position in Venus Protocol
The stake in Venus Protocol, BNB Chain’s decentralized lending platform, belongs to an attacker who hacked BNB Chain last year. With a significant position of 900,000 BNB (approximately $210 million) borrowed, the health rate of this position is dangerously close to the liquidation threshold. BNB Chain’s core team is ready to step in if needed. “ The whitelisted wallet was initially funded with $30 [million] USDT with a guarantee to avoid shortfall on Venus and provide additional support through this mechanism approved by Venus governance”, Venus said on Twitter. The hack involved tampering with security proofs and a vulnerability related to iavl hash checking.
Reddit Subcommunities Protest Third-Party App Restrictions
Several subcommunities on Reddit, including popular cryptocurrency subreddits, have decided to go private for 48 hours in protest of the company’s new policies restricting the use of third-party apps. These changes impact communities’ ability to use third-party tools to moderate content. Some of the affected subreddits include r/Bitcoin, r/CryptoCurrency and r/cardano. Around 3,500 subreddits are estimated to be affected by the protest. Reddit plans to release its own mobile moderation tools to mitigate these concerns. “ We respect when you and your communities take action to highlight the things they need, including sometimes going private ”, said Reddit CEO Steve Huffman.
Former Facebook Executive Takes Role as Vice President of Gaming at Thirdweb
Atif Khan, former Facebook executive (NASDAQ:META), has been named the new Vice President of Games for infrastructure startup Thirdweb. The San Francisco-based company offers a set of Web3 infrastructure tools for developers to build decentralized applications, including blockchain games, NFTs and DAOs. Khan’s experience in the games industry and his focus on providing comprehensive tools for game developers drew him to Thirdweb. The company recently developed a game called Web3 Warriors to demonstrate its capabilities, which has garnered massive player engagement. Khan believes that casual mobile games native to Web3 will drive widespread adoption of blockchain technology. Thirdweb aims to become the premier development tool in the Web3 space.