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| Hey Insider! Welcome to the week’s latest Inside Cryptocurrency newsletter! Today’s issue covers some of the biggest stories hitting the headlines in the crypto market as the week closes, including Binance’s new motion seeking dismissal of the U.S. securities regulator’s lawsuit against it, Bybit’s decision to withdraw from the U.K., Galaxy Digital’s first CEO for the European region, and more. Enjoy your reading, and if you find this newsletter useful, please do not forget to share it with your friends and colleagues! Doğa
p/dogayurduneri | |
| 1 | | Dubai-headquartered crypto exchange Bybit has decided to withdraw from the U.K. market as of October, proactively halting its services in the country due to the recent regulatory developments. The decision came nearly a week after Bybit CEO Ben Zhou announced the company might have to exit the U.K. very soon because of the new regulations. More: - The platform will not accept new user account applications from U.K. customers as of Oct. 1.
- However, the decision will take effect for existing customers after Oct. 8, with the British clients becoming unable to deposit funds, create new contracts, and increase any existing positions.
- Users will be able to reduce and close their positions and withdraw their remaining funds until Jan. 8, 2024.
- Bybit will automatically liquidate any positions left open after this deadline, making funds from the liquidation available for withdrawals.
- The move came several months after the Financial Conduct Authority (FCA), the U.K.'s financial market regulator, decided to tighten rules for crypto promotions, classifying crypto as restricted mass market investments, a category for high-risk investment products.
- The new rules, which will come into force as of Oct. 8, also require crypto ads to contain clear risk warnings and prohibit incentives such as referrals and new joiner bonuses for crypto firms.
- Zhou recently stated that the FCA's new regulations interpret even just having a website accessible to U.K. customers as a promotion and using the English language as a user solicitation attempt.
Zoom Out: - Several other crypto-related platforms, including PayPal, Luno, and CoinCorner, also recently had to halt their crypto trading operations for customers in the U.K., citing recent regulatory changes in the country.
- Besides, Bybit CEO Zhou pointed out that Binance and OKX are similarly reevaluating their business strategies in the U.K. in light of the FCA's strict guidelines.
Q: Do you believe the stricter regulations will force more crypto-related companies to leave the U.K. market? Join the conversation here. |     | |
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What the numbers say: A recent study conducted by DappGambl analyzing 73,257 NFT collections has revealed the increased loss of worth in digital collectibles. The study results have shown that 69,795 of the NFT collections, accounting for over 95% of the total, have a market cap of zero Ether (ETH). DappGambl pointed out that those dead NFTs are owned by 23 million investors. The study also found that 18% of NFTs are worth $0, while fewer than 1% have a price tag of over $6,000. Also, the analysis suggested that the most common price tags for NFTs are between $100 and $200, with 4,265 NFTs in total. Relevance: On the other hand, the decrease in floor prices accelerated even more in Q2 this year with the effect of a broader NFT market downturn. In July, another report from the Web3 data platform DappRadar showed that NFT trading volumes worldwide declined to $2.9B in Q2, with a 38% decrease from $4.7B in the previous quarter. The sales count also retreated to the $18M level during the second three-month period of the year, with a quarterly down from $20.5M. Both trading volumes and sales counts in H1 2023 are nearly 65% below the amounts in the same period of last year. The downward trend also caused several high-profile NFT collections, including Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club, Pudgy Penguins, and Azuki, to see a strong drop in floor prices. Brands that should care: Besides, the downturn has impacted many NFT firms negatively. Over the last several months alone, many NFT-related companies, including DapperLabs, OpenSea, Magic Eden, Candy, Metaplex, Autograph, and SuperRare, had to conduct mass layoffs, reducing their headcount. | | | |
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| 3 | | Binance, the largest crypto exchange by trading volume, and its CEO Changpeng Zhao (CZ) have filed a new legal motion, asking the court to dismiss a lawsuit by the U.S. Securities and Exchange Commission (SEC) against them. In a 60-page filing, the company claimed that the agency overstepped its authority through the lawsuit. More: - Binance and CZ also said the regulator attempted to impose penalties retroactively without providing any guidance for cryptocurrencies.
- The petition pointed out that the SEC distorts the securities laws while claiming regulatory power over the crypto industry.
- Binance.US, the U.S. arm of the exchange, similarly asked the court to dismiss the charges against it in a separate 56-page motion.
- The SEC filed a 136-page complaint against Binance, CZ, and Binance.US in June 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.
- The exchange is also under scrutiny by the Commodity Futures Trading Commission (CFTC), the Internal Revenue Service (IRS), and federal prosecutors in the U.S.
- The heightened regulatory crackdown forced Binance.US to depart its ways with many senior executives, including the CEO Brian Shroder, to conduct two mass layoffs, cut ties with its banking partners, halt some of its products, and suspend U.S. dollar (USD) deposits and withdrawals.
Zoom Out: - Over the last several months, Binance similarly came under increased scrutiny by regulators in several other countries, including Australia, France, and Belgium.
- The platform also recently had to withdraw from several markets in the West, such as Canada, Austria, the Netherlands, Cyprus, the U.K., and Germany, mainly due to compliance issues.
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| 4 | | U.S. Judge Lewis A. Kaplan has accepted the U.S. prosecutors' motion to deny all of the witnesses proposed by the bankrupt crypto exchange FTX's former CEO, Sam Bankman-Fried (SBF). The ruling blocked all the proposed witnesses from testifying on the stand at SBF's trial in October. More: - SBF's legal team initially proposed seven expert witnesses, including consultant Thomas Bishop, data analyst Brian Kim, law professor Bradley Smith, British barrister Lawrence Akka, consultant Joseph Pimbley, financial consultant Peter Vinella, and assistant business professor Andrew Di Wu.
- However, the U.S. Department of Justice (DOJ) objected to the proposed witnesses by giving several reasons, such as a lack of proper clarity on what the witnesses would discuss and their unsuitability for testifying in a criminal trial.
- The judge said the defense could call four of the witnesses, Bishop, Pimbley, Wu, and Kim, only to respond to the DOJ's witnesses if it provides proper disclosure at least three days before they testify.
- Akka, Vinella, and Smith, however, were completely excluded from testifying.
- Kaplan also denied a motion from SBF to exclude one of the government witnesses, Peter Easton, who is expected to testify about customer deposits based on an analysis of FTX data.
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 the sister company Alameda Research.
- 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.
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| 5 | | The U.S.-based digital asset investment firm Galaxy Digital has appointed Leon Marshall, the company's former head of sales, as its first CEO for the European region. Marshall will oversee the firm's European expansion efforts, managing operations and client relationships in the region. More: - Galaxy Digital's billionaire founder, Michael Novogratz, said Europe is critically important for the company's growth strategy, adding that there is a growing demand in the region for institutional crypto products.
- Novogratz also stated that Europe's efforts to establish a legal framework for the digital asset industry, which recently came to life with the approval of the European Union's (EU) region-wide crypto regulations, Markets in Crypto Assets (MiCA), was a crucial factor in their decision.
- Marshall will build regional operations from Galaxy Digital's office in London and hire staff for the firm's investment banking, asset management, crypto lending, and derivatives operations in Europe.
- The executive joined Galaxy Digital as head of sales in June.
Zoom Out: - Galaxy Digital currently operates in a wide range of areas of the crypto market, including trading, lending, asset management, Bitcoin mining, and advisory services.
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| 6 | | Crypto analytics platform Nansen has announced that it experienced a security breach, leading some of its clients' blockchain addresses, email addresses, and password hashes to be exposed. The firm said the breach impacted 6.8% of its users in total. More: - The analytics company stated that the incident occurred after the online systems of one of its third-party vendors were compromised without naming the vendor.
- The attacker gained unauthorized admin access to an account used to provide customer access to Nansen.
- Email addresses of all impacted users have been exposed, while a smaller portion experienced that their password hashes and blockchain addresses were leaked.
- The firm informed affected users of the breach through an email, warning them to change their passwords and be careful about phishing attacks.
- The company also said other applications using the same email address and password could be at risk.
- Besides, the platform underlined that it is actively conducting a full investigation with the vendor and external legal advisors, promising to communicate as transparently as possible with its users.
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- Bankrupt crypto exchange FTX's new management has filed a lawsuit against the former employees of its Hong Kong affiliate to recover around $157.3M of funds.
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- Stablecoin issuer Tether has invested an undisclosed amount in German crypto miner Northern Data Group, hinting at its intention to support AI initiatives.
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INSIDE CRYPTOCURRENCY LEADERBOARD (ALL-TIME) |
 | 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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