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| 1 | | The U.S. Securities and Exchange Commission (SEC) has filed a 136-page complaint against Binance, the largest crypto exchange by trading volume, and its CEO Changpeng Zhao (CZ) over U.S. law violations. The allegations in the complaint include mishandling customer funds, misleading investors and regulators, violating securities laws, creating an extensive web of deception, conflicts of interest, lack of disclosure, wash trading, and calculated evasion of the law. More: - The regulator asked the court to freeze Binance's assets and appoint a receiver.
- In the lawsuit, the SEC also claimed that many tokens traded on Binance, including Binance Coin (BNB), Binance USD (BUSD), Solana (SOL), Cardano (ADA), Polygon (MATIC), The Sandbox (SAND), Decentraland (MANA), and Algorand (ALGO), were improperly offered and sold as securities.
- Further, the agency said the exchange's U.S. arm, Binance.US, has hidden ties with Binance, and they operate as an exchange, broker-dealer, and clearing agency without registering with the SEC.
- The U.S. regulator added that Binance mixed customer funds with its own assets, sending billions of dollars of those funds to a bank account controlled by Zhao before transferring them to a third party and using them to trade crypto.
- Binance defined the complaint as disappointing and said the SEC was not able to provide clarity over rules for digital assets, adding that they intend to defend the platform vigorously.
- Within the first 24 hours of the complaint, the popular crypto exchange experienced nearly $790M of withdrawals.
Zoom Out: - The SEC's complaint followed a lawsuit filed by the U.S. Commodity Futures Trading Commission (CFTC) in March against Binance and CZ with allegations of regulatory violations in seven counts.
- The exchange has also been under scrutiny by the Internal Revenue Service (IRS) and federal prosecutors in the U.S., mainly due to compliance issues.
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What the numbers say: Google Trends data has shown that online search volume for the term "crypto" retreated to the levels at the end of 2020, marking a 29-month low. The relative interest score of the searches for crypto fell to 17 in the week of May 28, down from an all-time high of 100 in May 2021. The leading cryptocurrencies, Bitcoin (BTC) and Ether (ETH), saw a similar decrease in interest on Google. The statistics also pointed out that search volume for crypto has been in a consistent decline since May last year. Details: Besides, the Netherlands has become the country where Google searches for crypto were the highest from Nov. 1, 2020, to June 3, 2023. In the top five, the Netherlands was respectively followed by Singapore, Nigeria, Cyprus, and Belgium. Relevance: The decline in the interest on Google coincided with the lower trading volumes seen in the spot crypto exchanges over the last several months. The data compiled by The Block recently revealed that crypto exchanges retreated to the lowest monthly levels since 2020 in spot trading volume in May. The decline was mainly attributed to the latest volatility trend in the crypto market that caused a risk perception in investors. The combined statistics point out that there has been an overall decrease in interest in the crypto industry. Brands that should care: The chart also indicates that Google searches for crypto experienced sharp declines last year right after May 2022 and November 2022, with the collapses of the multi-billion dollar Terra ecosystem and previously third-largest crypto exchange FTX. | | | |
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| 3 | | The U.S.-based crypto exchange Coinbase has been sued by the U.S. Securities Exchange Commission (SEC) nearly one day after the agency filed a lawsuit against rival crypto exchange Binance. In the 101-page complaint, the top securities regulator alleged Coinbase of allowing users to trade numerous tokens that were actually unregistered securities. More: - The tokens in question include Solana (SOL), Cardano (ADA), Polygon (MATIC), Voyager Token (VGX), and The Sandbox (SAND).
- Since the agency listed the same tokens in the complaint against Binance, the lawsuit is expected to have wider implications for other crypto exchanges listing these tokens.
- The SEC also claimed that Coinbase is unlawfully operating as an exchange, a broker-dealer, and a clearinghouse at the same time without registration with the agency, though it is subject to U.S. securities laws.
- The commission believes these three functions should be separated, just as in traditional securities markets.
- The regulator requested the court to issue an order to force Coinbase to comply with securities laws and give up on the undeserved gains.
- Also, the SEC said Coinbase's staking service is violating its rules.
- A multi-state task force of regulators from Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Caroline, Vermont, Washington, and Wisconsin has also simultaneously issued an order against Coinbase, alleging the exchange of violating the securities laws through its staking service.
Zoom Out: - Before the lawsuit, Coinbase had already entered into a legal battle with the SEC, filing a petition requesting the court to force the agency to create a clear framework for digital assets.
- Over the last several months, many crypto exchanges, including Coinbase, Kraken, Bittrex, and Binance, came under increased scrutiny by the SEC.
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| 4 | | Tether, the issuer of the largest stablecoin USDT, has invested in a Bitcoin mining project dubbed Volcano Energy in the startup's first $250M funding round. Volcano Energy aims to build a Bitcoin mining facility in Metapan, a municipality in El Salvador, where Bitcoin (BTC) became legal tender in September 2021. More: - The El Salvadorian startup seeks to eventually raise $1B to fund the planned mining operation.
- The mining facility will have a capacity of 241 megawatts.
- The total power will be split into 169 megawatts of photovoltaic solar energy and 72 megawatts of wind energy.
- This energy is expected to generate a computing power of over 1.3 exahashes per second (EH/s).
- Tether's chief technology officer (CTO), Paolo Ardoino, said the firm is excited to be one of the initial pioneers of renewable energy in El Salvador as an equity investor and advisor.
Zoom Out: - The move came nearly one week after Tether announced that it would start mining Bitcoin in Uruguay in collaboration with a local licensed company, investing in the undisclosed firm.
- At the time, the stablecoin issuer cited Uruguay's renewable energy capabilities while explaining the decision to choose the country.
- The firm also recently announced that it would start investing 15% of its monthly net profit in Bitcoin on a regular basis as of May to diversify its reserves backing USDT, whose value is pegged to the U.S. dollar (USD).
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| 5 | | Luxembourg's competition authority has launched a market study into blockchain and Web3 technology. The study marked the first attempt to investigate the competition and antitrust law breaches in the field. More: - The study will analyze the competition areas of new blockchain companies with existing Web2 companies and identify the anti-competitive practices implemented against Web3 firms.
- The agency said it is important to ensure that Web3 companies can operate in an effective and competitive market.
- Thibaut Schrepel, an associate professor at the University of Amsterdam who will help with the probe as an external expert, stated that the probe is the first market study conducted by a regulatory agency seeking to protect Web3 rather than attacking it.
Zoom Out: - The market studies conducted by antitrust authorities collect information from active firms in a particular industry about how the market works.
- These studies can also be a basis for further enforcement actions regarding violations of antitrust laws.
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| 6 | | French luxury fashion house Louis Vuitton has introduced VIA Treasure Trunk digital collectibles as the virtual representation of its iconic travel trunk. The brand will launch the luggage as a soulbound token (SBT). More: - Unlike NFTs, the SBTs prevent holders from transferring or selling the collectible after the initial purchase, ensuring that only selected people have access to the related token.
- Each Treasure Trunk will allow owners to unlock a never-before-seen design of the iconic Louis Vuitton luggage.
- The digital collectibles will also come with their physical counterparts.
- Each collectible will be put up for sale for €39,000 (~$41,600), and the fashion giant will make only a few hundred digital collectibles available for purchase.
- Louis Vuitton will accept registrations with a crypto wallet to the waiting list on June 8.
- Those selected from the waitlist will get an invitation for a private preview page on June 14, and chosen attendees will then have the opportunity to purchase a VIA Treasure Trunk on June 16.
Zoom Out: - Louis Vuitton's iconic, handcrafted travel trunk was first released in the mid-19th century.
- Since then, the luggage has adopted many renewed designs with fresh forms and materials for over 160 years.
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- The U.S. Securities and Exchange Commission's (SEC) Chair, Gary Gensler, said there is no need for more digital currency.
- Crypto exchange OKX has partnered with digital asset storage firm Komainu to allow its institutional customers to keep their crypto funds within the custodian, becoming the first client to use Komainu Connect.
- Crypto exchange Kraken has announced that it fixed an issue causing users to experience delays in deposits and withdrawals.
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INSIDE CRYPTOCURRENCY LEADERBOARD (7 DAYS) |
 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Aaron Crutchfield | |
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