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| Hey Insider! The echoes of the increased regulatory crackdown on the crypto industry are going on all around the world. Today’s issue covers several of the biggest stories in the digital asset market ahead of a (hopefully) calm weekend, such as the Texas regulator’s allegations against Abra, French authorities’ investigation against Binance, Block’s partnership with Coinbase, and more. I hope you enjoy your reading, and have a nice weekend! Doğa
p/dogayurduneri | |
| 1 | | The Texas State Securities Board has filed a cease and desist order against the crypto trading platform Abra and CEO Bill Barhydt, accusing the company of committing securities fraud. The state regulator also said the firm was insolvent or about to be insolvent in March when it interviewed Barhydt. More: - The agency alleged Abra of misleading investors by selling its Abra Earn and Abra Boost crypto interest accounts.
- In addition, the board claimed that the company secretly moved its assets to Binance Holdings Ltd.
- The order followed a 136-page complaint filed by the U.S. Securities and Exchange Commission (SEC) against Binance, the largest crypto exchange by trading volume, and CEO Changpeng Zhao (CZ) over U.S. law violations with 13 charges.
- Abra has yet to make an official statement on the order.
Zoom Out: - In 2022, Abra reduced its workforce in the U.S. and Asia by 5%.
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| 2 | | 
What the numbers say: A recent report from the crypto data website CoinGecko has revealed that the cryptocurrencies mentioned in the U.S. Securities and Exchange Commission's (SEC) lawsuits against two major crypto exchanges, Binance and Coinbase, plummeted by up to 35% in price. The Sandbox (SAND) took the biggest hit, declining by 35% in value. In the top five, SAND was followed by Coti (COTI), Chiliz (CHZ), Decentraland (MANA), and Dash (DASH), respectively. Several other popular tokens, such as Polygon (MATIC), Solana (SOL), and Cardano (ADA), also saw significant price drops following the SEC's complaints. Details: The crypto market cap has similarly been impacted by the increased crackdown. Within 10 days after the lawsuit against Binance, the figure retreated to as much as $1.06T, down from $1.19T one day before the complaint. Relevance: On June 5 and 6, the SEC consecutively filed two separate complaints against Binance, the largest crypto exchange by trading volume, and Coinbase, the largest U.S. exchange, over alleged U.S. securities law violations. In the filings, the agency labeled 19 tokens offered by these exchanges as unregistered securities. These tokens reacted to this move with a sharp decline of 5.8% to 35%. Brands that should care: On the other hand, several trading platforms, including Robinhood and eToro, responded to the SEC's move by delisting some tokens labeled as unregistered securities in the lawsuits. The legal motions are expected to have further implications for other platforms operating in the U.S. and listing these tokens, such as Kraken and Gemini. | | | |
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| 3 | | Binance, the largest crypto exchange by trading volume, has come under preliminary investigation in France on allegations of illegally canvassing customers and severe money laundering. A Binance spokesperson confirmed it recently had an on-site visit by French authorities. More: - The spokesperson added that user information is kept private and only disclosed to government officials in response to proper, well-documented requests.
- On Twitter, Binance CEO Changpeng Zhao (CZ) also said on-site inspections without advance notice are a regular procedure in France, denying claims.
- French authorities' lititigation came shortly after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance and Zhao over U.S. law violations with 13 charges.
- 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.
- At the time, Binance defined the complaint as disappointing, adding that they intended to defend the platform vigorously.
- The platform is currently under increased pressure in several other countries by market regulators, mainly due to compliance issues.
Zoom Out: - On the other hand, the popular crypto exchange recently applied to withdraw its registration in Cyprus as a crypto asset service provider to focus on its larger markets in Europe ahead of the rollout of the European Union'Union'sregion-wide crypto regulations, Markets in Crypto Assets (MiCA).
- France is one of the six EU member states where Binance has licenses and registrations.
- The firm also recently halted its operations in the Netherlands after failing to register as a virtual asset service provider with the European country's regulator.
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| 4 | | Twitter founder Jack Dorsey's digital payments company Block has announced its collaboration with Coinbase. As part of the partnership, Block's new self-custody Bitcoin wallet, Bitkey, will be integrated into its mobile payment app Cash App and the U.S.-based crypto exchange Coinbase. More: - The integration will see Bitkey users purchasing and selling Bitcoin (BTC) through Cash App or Coinbase directly from the wallet's app.
- Bitkey's public beta testing will launch in the upcoming weeks.
- The firm will roll out the digital wallet globally later in 2023, starting with the U.S., the U.K., Canada, Brazil, and Australia.
- Block said the partnership would help users have more control and ownership over their financial assets.
Zoom Out: - The announcement came several days after the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase over alleged U.S. securities law violations following the complaint against rival Binance.
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| 5 | | A Montenegrin High Court has ordered Do Kwon, the co-founder of the collapsed Terra ecosystem, to be taken into extradition custody in the country for six months. During the custody process, the court will decide on South Korea's extradition request for Kwon. More: - The South Korean prosecutors issued an arrest warrant for the 31-year-old founder in September 2022 in a lawsuit defined as the largest-ever financial fraud case in the country.
- The U.S. also seeks Kwon's extradition.
- Both countries do not have a direct extradition treaty with Montenegro.
- Montenegrin Special State Prosecutor's Office will also question Kwon on his alleged ties with a local politician, Milojko Spajić.
- Terra founder allegedly contacted Spajić in a letter several days before the latest round of elections in Montenegro, which was denied by the politician.
- Kwon was arrested at the Podgorica Airport in Montenegro in March with Han Chang-Joon, the chief financial officer of Terraform Labs, while trying to fly to Dubai carrying falsified traveling documents.
- The founder faces many lawsuits and investigations in several countries, including South Korea and the U.S., with allegations such as tax fraud, deceiving investors, racket collecting, and building a Ponzi scheme.
Zoom Out: - On the other hand, a Montenegrin Basic Court most recently reapproved the bail terms of Do Kwon and Han Chang-Joon to release the pair from prison on $436,000 bail for each.
- The multibillion-dollar Terra ecosystem collapsed last year after its native token Luna's price plummeted nearly to zero in May 2022 and lost all its value against the U.S. dollar (USD), triggering a prolonged crypto winter.
- The collapse caused over $60B to be wiped off the crypto market.
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| 6 | | Colombia's central bank, Banco de la República, has partnered with Ripple, a payment protocol most famous for its native token XRP, to explore the use cases of blockchain technology. The partnership will see the two sides experimenting with the technology to improve the country's payment system using Ripple's central bank digital currency (CBDC) platform. More: - Colombia's Ministry of Information and Communications Technologies (MinTIC) will oversee the pilot project.
- The CBDC platform will be experimented with in a controlled environment without endangering public resources.
- The pilot project will continue by the end of 2023.
- Spain-based blockchain technology firm Peersyst Technology will also be a partner of the initiative.
- The project mainly aims to improve speed, reduce costs, and demonstrate blockchain technology's utility to the public.
- Ripple's director of CBDC business development, Joe Vollono, said they had been in talks with the Colombian central bank for over a year.
- The collaboration came nearly a month after Ripple launched its CBDC platform, allowing central banks, governments, and financial institutions to issue their own digital currency.
Zoom Out: - In April, the firm also signed a deal with the Central Bank of Montenegro to jointly develop a strategy and pilot program for a Montenegrin digital currency in the form of a CBDC or a national stablecoin.
- At the time, RippleX's vice president for central bank engagements and CBDCs, James Wallis, said they were in negotiations with dozens of central banks worldwide for CBDC projects.
- Ripple's CBDC platform is currently used as the basis for similar pilot projects in several other countries, including Hong Kong, Bhutan, and Palau.
- Last year, the Colombian government announced its plans to introduce a CBDC.
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- Crypto exchange Binance's U.S. arm, Binance.US, has reportedly laid off around 50 employees in its legal, compliance, and risk departments following the U.S. Securities and Exchange Commission's (SEC) complaint.
- Seychelles-based crypto exchange OKX has obtained a preparatory license in Dubai to legally operate as a virtual asset service provider in the region.
- New York's Attorney General (AG), Letitia James, has banned Hong Kong-based crypto exchange CoinEx from operating in the U.S. state, seizing the platform's over $1.7M of funds for failing to register with the regulators.
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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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