| Hey Insiders! It's been a wild day for the crypto industry as many crypto-related firms faced U.S. regulators in the courts, and some of them won victory. Today's issue covers several of the biggest stories from the crypto market, including the former Celsius CEO's bail agreement, Coinbase and the U.S. Securities and Exchange Commission's (SEC) first court hearing in their legal battle, Ripple's partial court victory against the SEC, and more. Enjoy your reading, and have a great weekend! Doğa
p/dogayurduneri | |
| 1 | | Coinbase, the largest U.S. crypto exchange by trading volume, has come up against the U.S. Securities and Exchange Commission (SEC) in the first court hearing that lasted over two hours. The hearing came a month after the SEC filed a lawsuit against Coinbase over alleged U.S. securities law violations, labeling 12 tokens listed on the exchange as unregistered securities. More: - During the hearing, Judge Katherine Polka Faila questioned both sides on various topics, including the definitions of securities and staking.
- The case was closely watched since it has the potential to establish a precedent for securities laws, crypto market structure, and the SEC's regulatory power.
- In its first legal response to the agency's allegations, Coinbase argued that even if all the allegations in the lawsuit are true, they are beyond the SEC's legal authority, citing the SEC Chair Gary Gensler's testimony from 2021 when he said only Congress had the power to regulate the crypto industry.
- At the court hearing, the SEC's counsel said the agency does not try to regulate the whole crypto market in the U.S., but the conduct.
- The counsel also stated that Bitcoin (BTC) is not a security and its status is not in question, though they do not want to speak on Ether (ETH).
- Besides, Judge Faila pointed out that it is normal for Coinbase to think what it was doing was okay since the SEC approved it to go public as a securities exchange in 2021.
- U.S. Judge concluded the hearing by asking both sides to present a realistic schedule for the next hearing, to keep the page limits on materials, and to use reasonable footnotes.
Zoom Out: - One day before Coinbase, Binance was also sued by the SEC through a 136-page complaint over U.S. law violations.
- Over the last several months, many other crypto exchanges, including Kraken, Gemini, and Bittrex, came under increased scrutiny by the SEC.
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| 2 | | 
What the numbers say: Payment protocol Ripple's native token XRP recently jumped by nearly 90% in price after the company won a partial victory in the court against the U.S. Securities and Exchange Commission (SEC). U.S. District Judge Analisa Torres ruled that XRP is not a security as long as it is sold to the general public. Following the ruling, the token's price increased to as much as $0.87, up from $0.47. Besides, the popular cryptocurrency has overtaken Binance Coin (BNB) on the ranking, becoming the world's fourth-largest digital asset by market cap. However, the token is still 76% below its all-time high in 2018. Relevance: The judge's recent ruling was considered a preliminary victory for Ripple since the SEC classified XRP as a security in a lawsuit filed in December 2020. In the case, the agency accused Ripple and some of its executives of the unregistered sale of nearly $1.3B of XRP tokens, which it labeled as securities. However, the release of the long-awaited Hinman documents to the public in June paved the way for the recent partial victory. The documents, which Ripple requested to unveil, involve the SEC's former director of corporate finance division Bill Hinman's 2018 speech on crypto securities. In the speech, Hinman stated that Ether (ETH) is not a security, contradicting current chair Gary Gensler's argument that all crypto assets other than Bitcoin (BTC) are securities. Hinman's view strengthened Ripple's legal arguments claiming that XRP should not be considered a security. Brands that should care: Following Judge Torres' ruling, many crypto exchanges, including Coinbase, Kraken, Gemini, Bitstamp, and Crypto.com, have announced that they would list XRP again on their trading platforms. | | | |
| 3 | | Bankrupt crypto lender Celsius Network's former CEO Alex Mashinsky has pleaded not guilty to charges in seven counts, including conducting fraud, misleading investors, and manipulating cryptocurrencies, brought by U.S. prosecutors. Besides, the U.S. District Judge has determined a $40M bail for Mashinsky to be released pending trial. More: - The former CEO has also been restricted from traveling and opening new bank or crypto accounts.
- The deal was signed by Mashinsky's wife, along with another co-signer.
- The bail bond was secured through a financial claim on Mashinsky's home in New York City and a bank account.
- Lawyers for Mashinsky said the former CEO looks forward to defending himself vigorously in court against these baseless charges.
- The bail agreement came nearly a day after Mashinsky was arrested by U.S. law enforcement agencies.
- The U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Federal Trade Commission (FTC) also simultaneously filed lawsuits against Mashinsky and Celsius.
- The increased scrutiny from the regulators followed the CFTC investigators' conclusion that Celsius and Mashinsky violated U.S. laws before the collapse by misleading investors and operating without registration.
Zoom Out: - Celsius offered loans and paid high interest rates on crypto deposits.
- The company filed for Chapter 11 bankruptcy protection in July 2022, mainly due to its liquidity issues and the crypto market downturn triggered by the multi-billion dollar Terra ecosystem's collapse that wiped over $60B off the industry.
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| 4 | | Multichain, a crypto project connecting different blockchains, has announced it is ceasing its operations due to a lack of operational funds. The move came shortly after Multichain's missing founder and CEO was arrested by Chinese police without citing any reason. More: - In May, Multichain revealed that it was unable to reach its CEO, causing several partners, including crypto exchange Gate.io, to experience issues and outages.
- In early July, the firm saw an unexpected asset outflow of over $120M.
- The massive outflow was followed by an additional $103M outflow as the CEO's sister moved remaining user assets to wallets under her control.
- The sister of the CEO, also known as Zhaojun, was also taken into custody.
- Besides, Chinese police seized the CEO's all computers, phones, hardware wallets, and mnemonic phrases used to access these wallets.
- In a tweet, the Multichain team said all operational funds, investments, and access to servers have been under Zhaojun's control since the project's launch and, thus, are with the police now.
Zoom Out: - Before halting its operations, Multichain allowed users to transfer crypto assets between different blockchains.
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| 5 | | Indonesia's Commodity Futures Trading Supervisory Agency (CoFTRA) has announced that it will launch the long-awaited national crypto exchange by the end of July. After the launch, the exchange will be the only platform allowing crypto trading for the public in the country. More: - The exchange's debut was previously postponed to a later date two times from the determined launch dates in December 2022 and June 2023.
- CoFTRA head Didid Noordiatmoko said the crypto transactions in the country would only be allowed through the upcoming platform.
- The agency official also stated they recently agreed on the stock exchange rules, including the identity verification measures.
- Trading on the national exchange will be offered through an integrated application.
- The CoFTRA already conducted system integration tests between traders, exchanges, clearing institutions, and depository institutions.
- The agency will restrict cryptocurrency sales on the platform to local transactions.
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| 6 | | Italian luxury fashion house Gucci has partnered with the centuries-old British auction house Christie's to launch a new NFT collection dubbed Future Frequencies: Explorations in Generative Art and Fashion. The collection will feature 21 NFTs created by leading digital artists. More: - The artists whose works will be in the collection include Claire Silver, Emi Kusano, Emily Xie, William Mapan, Zach Lieberman, Botto, Helena Sarin, and DRAUP.
- The NFTs will be put up for auction on Christie's 3.0, the on-chain auction platform, between July 18 and 25.
- The bidders will also be able to see the NFT artworks on Gucci's online gallery, Gucci Art Space.
- A joint statement pointed out that the collection focuses on generative systems and AI, and the artists are heavily inspired by the design and production of garments, textiles, and the fashion industry in general.
Zoom Out: - Gucci launched a marketplace for unique curated NFT artworks, Vault Art Space, in 2022 in collaboration with the popular NFT marketplace SuperRare.
- In March, the fashion giant also signed a multi-year partnership deal with Yuga Labs, the firm behind the famous Bored Ape Yacht Club (BAYC) and CryptoPunks NFTs.
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- Europe's first spot Bitcoin exchange-traded fund (ETF) has been scheduled to launch within July after a 12-month delay.
- NFT company Legitimate has released a hip hop-themed NFT sneaker collection dubbed Evolution of the Mixtape in partnership with the famous sportswear brand Puma and entertainment agency Roc Nation.
- Lawyers for the former CEO of the bankrupt crypto exchange FTX, Sam Bankman-Fried (SBF), have requested the court to allow SBF's close friends to visit him while he is under house arrest without going through security checks.
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 | 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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