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| Hey Insider! Welcome back to the Inside Cryptocurrency newsletter! Today's issue again covers some of the most prominent stories from the crypto market, including Binance's protective court order against the U.S. Securities and Exchange Commission (SEC), new illegal campaign donation charges brought against the bankrupt crypto exchange FTX's former CEO, the troubled crypto custodian Prime Trust's bankruptcy filing, and more. Enjoy your reading, and if you find this newsletter useful, please share it with your friends and colleagues! Doğa
p/dogayurduneri | |
| 1 | | Binance.US, the U.S. arm of the largest crypto exchange by trading volume, has recently filed a protective court order against the U.S. Securities and Exchange Commission (SEC), asking the court to limit the agency's requests for information. The exchange said the regulator's requests were overbroad and unduly burdensome. More: - In the filing, Binance.US stated that it already provided sufficient information to the SEC.
- The order requests the U.S. District Court of Columbia to limit the SEC to four depositions from employees of BAM Trading Services, Binance.US' operating company, and to drop the deposition of BAM's CEO and chief financial officer (CFO).
- The legal tension between the SEC and Binance mainly started with a 136-page complaint filed by the agency against the exchange and its CEO Changpeng Zhao (CZ) with 13 charges in June.
- 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.
- In its latest legal motion, Binance said the SEC has still yet to identify any evidence suggesting that customer assets were misused or dissipated in any way.
- The exchange also underlined that the regulator rejected Binance's proposals to meaningfully limit its requests and is opposed to the motion for a protective order.
Zoom Out: - Over the last several months, Binance also came under scrutiny by regulators in other parts of the world, including Australia, France, and Belgium.
- Besides, the platform recently had to withdraw from several markets in the West, including Canada, Austria, the Netherlands, Cyprus, the U.K., and Germany, mainly due to compliance issues.
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What the numbers say: Bitcoin's (BTC) annualized 30-day price volatility recently hit an all-time low of 15.52%. The figure reached as much as 72% in March this year. The average value for the figure in the leading cryptocurrency was 61.4% in 2022. Relevance: The sudden decrease in volatility was attributed to the falling trading volumes of Bitcoin. Within the same day, the volatility reached an all-time low, and the major crypto exchanges saw only $1.88B worth of Bitcoin transactions. The decline means that traders are now less active and interested in the crypto market. The popular cryptocurrency's price also stayed mostly flat at the $29,000 level over the past month. Brands that should care: The drop in trading volumes mainly impacted the major crypto exchanges, such as Binance, Coinbase, Kraken, OKX, and Gemini, that facilitate transactions for traders. Q: Do you expect a strong upward trend in Bitcoin's price in the short term? Share your thoughts with us in the comments box. | | | |
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| 3 | | The U.S.-based crypto custodian Prime Trust has officially filed for Chapter 11 bankruptcy protection nearly one month after it was put into receivership. In the filing, the company reported between 25,000 and 50,000 creditors, listing Prime Core Technologies Inc., Prime Trust, LLC, Prime IRA LLC, and Prime Digital LLC as the entities included in the bankruptcy process. More: - The firm pointed out that it would evaluate all the strategic alternatives, including a potential sale of the assets and operations.
- The custodian also stated that it plans to file a number of motions with the bankruptcy court, including the requests to continue to pay wages and benefits to employees.
- The bankruptcy filing has shown that Prime Trust currently has $100M to $500M of liabilities as opposed to $50M to $100M assets in hand.
- The top five unsecured creditors are owed roughly $105M, with the largest claim of $55M.
- The U.S. state of Nevada's financial regulator, the Nevada Financial Institutions Division (NFID), put Prime Trust into receivership in July, significantly halting its operations soon after it issued a cease-and-desist order against the company.
- The NFID initially alleged the company of using customer funds to buy cryptocurrency, cover lost deposits, and satisfy withdrawals from December 2021 to March 2022, saying it was at a substantial deficit or was insolvent.
Zoom Out: - Prime Trust held funds in dollars and crypto on behalf of its customers, including FTX, Binance.US, and Celsius Network.
- The regulatory tension around the firm followed the digital asset trust company BitGo's decision to terminate its acquisition deal with Prime Trust.
- The two firms initially reached an agreement after Prime Trust faced financial difficulties due to its exposure to the bankrupt crypto lender Celsius.
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| 4 | | U.S. prosecutors have filed a superseding indictment against the bankrupt crypto exchange FTX's former CEO, Sam Bankman-Fried (SBF), modifying previous charges. The filing has brought a new charge against the former executive over illegal campaign donations. More: - Prosecutors have alleged SBF of contributing more than $100M to Democratic and Republican political campaigns using customer funds to influence crypto regulations.
- SBF allegedly made campaign donations in the names of other executives, such as FTX's former Director of Engineering Nishad Singh, to hide that the donations came from customer deposits held at the sister company Alameda Research.
- Prosecutors said the former CEO was able to maximize FTX's political influence through those donations, lobbying regulators and lawmakers to support pro-crypto legislation for FTX's own benefit and to improve FTX's public image.
- SBF most recently hit the headlines after U.S. District Judge Lewis A. Kaplan revoked his bail since he tried to influence two witnesses in his case by speaking to the press.
- Following Kaplan's decision, FTX's former CEO was taken from house arrest at his parents' home in California to the Metropolitan Detention Center in Brooklyn pending trial.
- The 31-year-old former executive will appear in court in October to defend himself against a bunch of charges, including money laundering and misappropriation of customer funds, to which he pleaded not guilty.
Zoom Out: - 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 SBF used customer funds in FTX to compensate for losses at Alameda Research.
- The first round of criminal charges against SBF consisted of eight counts.
- However, prosecutors added four new charges to the existing allegations in February and another one in March.
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| 5 | | The Monetary Authority of Singapore (MAS), the city-state's financial market regulator, has finalized its regulatory framework for stablecoins. The new rules will be applied to any single-currency stablecoins pegged to the Singapore dollar or a fiat currency used in G10 countries, such as the U.S. dollar (USD), the euro, and the British pound. More: - The MAS launched a public consultation on the framework in October 2022.
- The agency said the framework aims to ensure a high degree of value stability for stablecoins regulated in Singapore.
- As part of the new framework, stablecoin issuers must meet certain requirements related to value stability, capital, and redemptions in Singapore.
- The key rules include disclosure requirements, an obligation to maintain suitable reserve assets to ensure stability, the requirement to maintain a minimum capital base and liquid assets, and the ability to return the par value of stablecoins to holders within five business days from a redemption request.
Zoom Out: - In June, Circle, the issuer of the popular stablecoin USD Coin (USDC), obtained a license in Singapore for digital payment token services.
- A stablecoin is a type of cryptocurrency whose value is pegged to another reference asset, mostly a fiat currency.
- Customers generally use these assets to trade with different cryptocurrencies without converting their funds back into fiat currencies.
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| 6 | | New Zealand-based crypto exchange Dasset entered a voluntary liquidation process shortly after some customers reported issues with withdrawing their funds. The company CEO, Stephen Macaskill, has stated that they could not find a banking provider for months to continue to operate. More: - Dasset's previous banking provider stopped working with the exchange in January this year.
- Law firm Grant Thornton was appointed as the liquidator for the company.
- According to an official statement from Grant Thornton, the significant reduction in asset values and trading levels impacted Dasset's ability to trade profitably, and a liquidation process is the best for the interest of stakeholders.
- The law firm also said they would contact all customers and suppliers in the next few days, promising to focus on protecting the company's assets.
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- Javier Milei, a libertarian candidate famous for his support for Bitcoin (BTC), has won the primary presidential election in Argentina.
- Lawyers for Sam Bankman-Fried (SBF) have asked a federal judge to allow the bankrupt crypto exchange FTX's former CEO to access antidepressants while in prison to prevent him from returning to his depression.
- Coinbase, the largest U.S. crypto exchange, has officially started its operations in Canada as some major rivals, including Binance, exit the Canadian market due to the new regulatory framework.
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Term of the Day Common area maintenance (CAM): CAM includes the fees tenants must pay to cover the expenses associated with the maintenance and operation of the common areas. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE CRYPTOCURRENCY LEADERBOARD (30 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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