| Hey Insider! Happy Friday! Today’s Inside Cryptocurrency issue covers several biggest stories from the crypto market hitting the headlines as the week closed, including Binance’s motion seeking dismissal of a lawsuit by the U.S. Commodity Futures Trading Commission (CFTC), bankrupt FTX and Genesis’ deal to settle a dispute in bankruptcy cases, The British Museum’s new NFT collection, and more. Enjoy your reading, and have a great weekend! Doğa
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| 1 | | Binance, the largest crypto exchange by trading volume, and its CEO Changpeng Zhao (CZ) have filed a 49-page motion asking the court to dismiss a lawsuit by the U.S. Commodity Futures Trading Commission (CFTC) against the platform. In the motion, the company argued that the regulator overreached the limits of its legal authority, used theories relying on inconsistencies, and made unsound and irrelevant allegations. More: - The filing also pointed out that the CFTC tried to regulate foreign individuals and companies residing and operating outside the U.S.
- The agency filed a lawsuit against Binance and CZ in March with allegations of regulatory violations in seven counts.
- The accusations in the lawsuit include executing unregistered futures transactions, providing illegal commodities options, failing to properly register with the derivatives regulator, law evasion, market manipulation, obscuring the location of executive offices, and failing to supervise diligently or implement anti-money laundering (AML) and terrorism financing measures, among other things.
- At the time, Zhao said the company did not agree with the allegations in the lawsuit, calling the complaint unexpected and disappointing.
- Binance and CEO Zhao were also sued by the U.S. Securities and Exchange Commission (SEC) last month through a 136-page complaint over alleged U.S. law violations.
- Amid the increased crackdown by U.S. regulators on the exchange, the company had to farewell several senior executives.
Zoom Out: - Over the last several months, Binance similarly came under increased scrutiny by regulators in other parts of the world, including Australia, France, and Belgium.
- The company also recently withdrew from several markets in the West, including Canada, the Netherlands, Cyprus, the U.K., and Germany, mainly due to compliance issues.
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| 2 | |  What the numbers say: The Optimism network, an Ethereum Layer-2 scaling solution, has recently surpassed one of its strongest rivals, Arbitrum, in daily transactions. The number of transactions on the network reached 715,760 on July 27, up from 594,570 at the beginning of the month. On the same day, Arbitrum retreated to 659,070 in daily transactions from 856,720 on July 1. The figures also marked the first time Optimism took the lead in daily transactions since January 2023.
Relevance: The rise in daily transactions was mainly triggered by the launch of the WLD token on Optimism by OpenAI CEO Sam Altman's crypto project Worldcoin. The launch created strong hype worldwide, fueling the activity on the network. Brands that should care: On the launch day, the token was listed on several leading crypto exchanges, including Binance, OKX, Huobi, Bybit, and Gate.io. The prevalent availability of the token also contributed to the increase in the daily transaction numbers. | | | |
| 3 | | Bankrupt crypto exchange FTX and the bankrupt crypto lender Genesis have reached an in-principle agreement to settle a dispute involving their Chapter 11 bankruptcy cases. The two companies will file motions to bankruptcy courts to receive approval for their agreement. More: - FTX initially claimed that Genesis owed it as much as $3.9B, which was rejected by the latter.
- As part of the in-principle deal, the amount was declined to $2B.
- The legal teams of the two parties said the agreement would resolve the dispute on their claims against each other.
- If approved by the bankruptcy court, the deal is expected to help Genesis repay most of its creditors who are waiting for the disputes in the bankruptcy case to be settled to receive their deposits back.
Zoom Out: - FTX and Genesis filed for Chapter 11 bankruptcy in November 2022 and January 2023, respectively.
- FTX's downfall followed the claims that the former CEO Sam Bankman-Fried (SBF) used customer funds in the firm to compensate for losses at the sister company Alameda Research.
- Genesis' bankruptcy, however, mainly stemmed from its exposure to the collapse of FTX.
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| 4 | | Renowned U.S.-based venture capital (VC) firm Sequoia Capital has downsized its cryptocurrency fund to $200M from the previously-allocated $585M, according to a recent report from The Wall Street Journal citing people familiar with the issue. Earlier this year, the company told its investors that the decision was made to scale the fund to reflect the current market changes better. More: - The move will see Sequoia reducing the amount of committed capital required from investors for the crypto projects.
- In this way, the fund will focus more on supporting young crypto startups after backing larger companies and seeing an industry downturn.
- The firm's crypto fund was first announced in February 2021 as part of Sequoia's ambitious restructuring plans.
- The company also recently parted ways with two leading crypto-focused investors, Michelle Fradin, and Daniel Chen, as part of a broader restructuring in the VC team seeing the departures of the five partners in total.
- The departure came after Sequoia experienced reputational damage due to the bankruptcy of the previously third-largest crypto exchange FTX in November 2022.
Zoom Out: - Sequoia was one of the largest investors of FTX, with its $150M investment.
- The exchange's collapse resulted in a $213.5M loss for the VC firm, and the company had to apologize to its investors for the investment after the collapse.
- In May, Singaporean government-owned investment firm Temasek Holdings also decided to cut salaries for its executives who recommended investing in FTX after suffering from reputational damage due to the collapse.
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| 5 | | Singapore-based crypto exchange Crypto.com has officially registered with the Netherlands' central bank, De Nederlandsche Bank (DNB). The registration will allow the platform to offer its crypto services in the country in compliance with local regulations. More: - The company needed to pass through a comprehensive review of DNB regarding its business processes and compliance with the country's anti-money laundering (AML) and counter-terrorism financing rules.
- The platform already offered its services to the users in the Netherlands before the registration, and the Dutch users were allowed to sign up for a service provided by Crypto.com.
- However, local regulations prevent crypto companies from soliciting new customers and advertising their services to Dutch users without registration.
- The registration with DNB specifically enables crypto service providers to supply crypto wallets to customers and process fiat currency on crypto exchanges.
- So far, 36 crypto-related companies, including Coinbase Europe, Bitstamp, and eToro, have registered with the Netherlands' central bank.
Zoom Out: - Last month, rival Binance, the largest crypto exchange by trading volume, had to exit the Netherlands and halt its operations after failing to receive approval for registration with DNB.
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| 6 | | The British Museum, the world's first national public museum, has announced that it would launch a new NFT collection in partnership with the Ethereum-based metaverse platform The Sandbox. The collection aims to reflect the breadth and depth of the museum's collection, offering new immersive experiences. More: - The museum will also create its own immersive space within The Sandbox.
- The Sandbox co-founder Sebastien Borget said the immersive space would allow the metaverse players to learn about the wealth of human history, art, and culture offered by The British Museum regardless of where they are.
- The London-based museum also previously launched three other NFT collections in collaboration with its French licensing partner, LaCollection.
Zoom Out: - The British Museum, founded in 1753, is a public museum dedicated to human history, art, and culture in the Bloomsbury area of London. It documents human culture history from its beginnings to the present.
- The museum hosts the most extensive permanent collection in the world, with eight million works.
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| 7 | | Quick Hits: - Don't miss your chance to invest in Virtuix, one of the fastest-growing startups in the booming gaming market. Invest by 8/10.*
- The U.S. House Financial Services Committee has advanced a new stablecoin bill to establish a regulatory framework for the controversial asset class one day after approving a Republican-led crypto bill.
- The NFTs created by a 99-year-old Hungarian artist, Vera Molnár, have been sold for around $1.2M at an auction that lasted less than one hour.
- Missing crypto billionaire Fernando Pérez Algaba was found dead in Argentina with his body parts in a suitcase.
- Say goodbye to inflammation, joint pain, dry eyes, and discomfort by adding this Antarctic "supernutrient" to your diet.*
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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 Christopher Hachey | |
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