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| Hey Insider! The echoes of the actions from U.S. regulators are still going on all around the world. Today’s issue covers the Nigerian securities regulator’s notice against Binance, Crypto.com’s decision to halt its institutional services in the U.S., crypto startup TaxBit’s staff cut, and more. Enjoy your reading! Doğa
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| 1 | | Singapore-based crypto exchange Crypto.com has announced that it would halt offering services to institutional clients in the U.S. as of June 21, citing limited demand and current market conditions. The firm said its corporate customers were informed about the process. More: - Crypto.com's retail operations in the U.S. will remain fully operational.
- The retail customers will still be able to access the mobile application, retail exchange, wallet, derivatives trading service, and the derivatives product dubbed UpDown Options.
- Institutional customers outside the U.S. will not be impacted by the decision.
- The platform underlined that it would consider relaunching the institutional operations for U.S. customers in the future.
Zoom Out: - The move came amid rising concerns about the regulatory environment in the U.S.
- The tension in the regulatory landscape has most recently been even more intensified after the U.S. Securities and Exchange Commission (SEC) filed two consecutive lawsuits against Binance, the largest crypto exchange by trading volume, and Coinbase, the largest U.S. exchange, over alleged U.S. securities law violations.
- Many other crypto exchanges, including Kraken and Bittrex, have also come under increased scrutiny by the SEC over the last several months.
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What happened: The data compiled by Finbold has shown that the number of crypto users worldwide increased to 417.5 million as of May 2023 from 305 million in 2022, with an over 36.88% surge. Asia has become the continent with the highest crypto user number. The region also showed the biggest growth by doubling the number of crypto users from 130 million to 260 million in a year. Oceania, South America, and North America experienced relatively smaller growth in related figures. On the other hand, Europe and Africa have become the only two continents seeing a decrease in the number of crypto users year over year (YoY). Details: The report also listed the top ten countries with the highest crypto ownership rates among the population. Thailand ranked first, with a 9.32% rate. In the top five, the country was followed by India, Brazil, Pakistan, and France, respectively. The data pointed out that around 5% of the population consists of crypto owners in the rest of the list. Why it matters: The 36.88% overall growth indicates that more than 110 million people have entered the crypto market over the last 12 months despite regulatory concerns worldwide. Regulatory tension has intensified all around the world since 2022, especially after the collapses of high-profile crypto firms, including the previously third-largest crypto exchange FTX and the multi-billion-dollar Terra ecosystem. However, the heightened tension did not prevent the new investors from joining the crypto industry. Finbold cited the latest bear market, the increase in companies accepting crypto as a payment method, and the U.S. banking crisis as the reasons for the surge in numbers. Where to see the impact: Another recent research from GWI also showed that crypto ownership increases more in countries with higher annual inflation rates because the economic downturn forces people to search for alternative financial instruments to the traditional ones. If this trend continues without a major collapse this year, 2024 is expected to see a further increase in global crypto ownership since the major economies in the world, including the U.S. and Europe, are currently passing through a strong recession. | | | |
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| 3 | | U.S. Bankruptcy Judge John Dorsey has approved the defunct crypto exchange FTX to remove customer names from the court filings in its bankruptcy case. The decision followed FTX's testimony that publishing the names would put the customers at risk even if their identifying information, such as email address, is kept confidential. More: - Dorsey said the customers are the most important issue in this case, and they want to ensure that they are protected or do not fall victim to any scams.
- Earlier this year, the judge allowed FTX to keep the names of 9 million individual customers private for three months.
- Dorsey also gave FTX permission to temporarily remove the names of companies and institutional investors from its customer lists.
- The ruling cited that these clients' names could be valuable if FTX decides to sell its business, though they do not face the same risks as individual customers.
- FTX will have 90 days to make a new request to remove the names of companies and institutional investors from the court filings.
Zoom Out: - In early May, media giants Bloomberg, The New York Times, The Financial Times, and Dow Jones requested the U.S. bankruptcy court to release the names of FTX's 9 million customers who lost money on the collapsed exchange.
- FTX, previously the third-largest crypto exchange, filed for Chapter 11 bankruptcy in November 2022, with all the 130 entities under the roof of FTX Group.
- The downfall followed the claims that the former CEO Sam Bankman-Fried (SBF) used customer funds in FTX to compensate for losses at Alameda Research.
- SBF currently faces trial on 13 charges, including bank fraud, money laundering, and bribery, to which he pleaded not guilty.
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| 4 | | Nigeria's Securities and Exchange Commission has recently defined the operations of Binance Nigeria Limited, a local unit of the largest crypto exchange by trading volume, as illegal. The commission has stated that the firm is not registered or regulated in the country. More: - The agency also pointed out that any public member doing business with Binance Nigeria Limited would take risks.
- Also, the statement warned investors that investing in crypto assets is extremely risky and may result in total loss.
- Binance was further ordered to halt immediately seeking investments from Nigerians, ceasing operations.
- The Nigerian commission also underlined that it could take further regulatory action against the platform and similar exchanges operating in the country.
- In response, a Binance spokesperson stated that they are aware of the legal notice and Binance Nigeria Limited is not affiliated with the company.
- The move came several days after the U.S. Securities and Exchange Commission (SEC) filed a 136-page complaint against Binance and CEO Changpeng Zhao (CZ) over U.S. law violations with 13 charges.
Zoom Out: - Nigeria is one of the most crypto-interested countries, though its government started cracking down on digital assets in 2021.
- The banks in the country are forbidden to offer services to the crypto exchanges and process crypto transactions.
- Currently, a central bank digital currency (CBDC) dubbed eNaira is in use in Nigeria, and the Nigerian Securities and Exchange Commission recently announced its plans to allow tokens backed by assets like equity, debt, and property on licensed digital asset exchanges.
- In May, the Nigerian government's Federal Executive Council also approved the country's national blockchain policy as part of its efforts to switch to a digital economy.
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| 5 | | The U.S.-based venture capital (VC) firm Andreessen Horowitz's crypto investment unit, a16z crypto, has announced its plans to open its first international office in London, U.K. The move followed the consecutive lawsuits filed by the U.S. Securities and Exchange Commission (SEC) against two major crypto exchanges, Binance and Coinbase. More: - The firm said the crypto industry could only succeed with a clear regulatory framework offering open pathway startups, protecting consumers from fraud and manipulation, and facilitating decentralization, instead of hindering it.
- The unit added that such an approach exists in the U.K, and the country's policymakers and regulators adopt a strategy specially designed for blockchain and digital asset technology.
- The office in the U.K. will be led by Sriram Krishnan, a general partner of the investment arm, and will aim to grow the crypto and startup ecosystem in the U.K. and Europe.
- The company will also open its next Crypto Startup School in London within the spring months of 2024 and work with blockchain clubs at the country's leading universities.
- On the other hand, Andreessen Horowitz underlined that their investments would remain heavily in the U.S., continuing to be committed to working with U.S. regulators to push for more regulatory clarity for crypto startups in the country.
- U.K. Prime Minister Rishi Sunak said he is thrilled that world-leading investor Andreessen Horowitz decided to open its first international office in the U.K.
Zoom Out: - Sunak has been pushing to make the U.K. a global crypto hub since his finance ministry.
- However, the country's financial regulator, the Financial Conduct Authority (FCA), has seen crypto as a high-risk asset class for several years.
- Over the last several months, many crypto-related firms, including Gemini and Coinbase, have shown interest in a potential presence in the U.K., citing the country's regulatory environment seeking to provide more clarity compared to the U.S.
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| 6 | | The U.S.-based crypto tax and compliance startup TaxBit has laid off 80 employees, accounting for nearly 40% of its total headcount, according to a recent The Information report citing people familiar with the issue. The firm has already informed employees of the staff cut. More: - TaxBit co-founder and CEO Austin Woodward also stepped down from the company.
- The firm's chief operating officer (COO), Lindsey Argalas, replaced Woodward.
- In August 2021, TaxBit hit unicorn status after raising $130M in a Series B funding round at a valuation of $1.33B.
- At the time, the company said the funding would allow it to double its 80-employee team, with a staff increase equal to the amount in the recent mass layoff.
Zoom Out: - In February, TaxBit was integrated into Twitter founder Jack Dorsey-led digital payments company Block's mobile payment processor Cash App.
- The move allowed Bitcoin holders in the app to calculate and report their taxes easily by tracing their transactions.
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- The U.S. Securities and Exchange Commission's (SEC) consecutive complaints against Binance and Coinbase have caused an outflow of $4B in deposits from the two major crypto exchanges in just four days.
- The U.S.-based Bitcoin payment app Strike has announced that it moved all customer funds in Bitcoin (BTC) and U.S. dollar (USD) to its in-house infrastructure to reduce potential counterparty risk.
- Ethereum co-founder Vitalik Buterin has pledged a new $100M fund for COVID-19 relief projects with Polygon co-founder Sandeep Nailwal.
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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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