Crypto Market Cap Unaffected This Week Amid New US Lawsuits
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Welcome back to Chain reaction.
If you thought last week was crazy with the US Securities and Exchange Commission cracking down on major crypto companies like Coinbase and Tron, you should buckle up for this week’s news.
Binance, the world’s largest crypto exchange by volume, its CEO Changpeng Zhao and chief compliance officer Samuel Lim are being sued by the US Commodity Futures and Trading Commission (CFTC), according to a filing released Monday.
The company, Zhao and Lim are being sued for allegedly violating trading and derivatives rules.
The CFTC filing alleges the exchange never registered in any capacity and “ignored federal laws” for U.S. financial markets, including laws that implement controls to prevent and detect the money laundering and terrorist financing, among other things.
After launching in June 2017, the exchange became the world’s largest crypto exchange in 180 days and has maintained that ranking ever since. Binance has spent $80 million on external partners such as KYC providers, transaction monitoring, market monitoring, and investigative tools to support its compliance programs, a company spokesperson shared with TechCrunch. .
“This filing is unexpected and disappointing as we have worked with the CFTC for over two years,” the spokesperson added. “Nevertheless, we intend to continue working with regulators in the United States and around the world. The best way forward is to protect our users and work with regulators to develop a clear and thoughtful regulatory regime. »
The CFTC likely disagrees with this position, as its filing indicates that Zhao and other parties involved in Binance’s senior management “failed to properly oversee Binance’s activities” and that these actions have ” actively facilitated violations of U.S. law.”
In response to the CFTC’s announcement, Zhao tweeted “4”, which refers to a previous tweet from January who uses the number to tell others to “ignore FUD, fake news, attacks, etc.” FUD is an acronym for Fear, Uncertainty and Doubt and generally refers to when a business feels disadvantaged.
This action comes at a time when the crypto industry – especially the big players – is facing a lot of US regulatory measures, which some see as a good thing for clarity, but others see as unfair. or stifling for innovation. Whether this action will have a positive impact on the US crypto ecosystem will be determined in the long term.
But even after a number of regulatory applications, the cryptocurrency market seems unaffected. Total crypto market capitalization increased slightly from $1.15 trillion to $1.18 trillion on the week, according to data from CoinMarketCap. At the time of writing, bitcoin and ether were up around 4% and 3%, respectively, in the same time frame.
This week in web3
Binance CFTC Lawsuit Shows “Regulators Will Continue to Regulate and Regulate More” (TC+)
Keeping with the theme from above, TechCrunch took a deep dive into what Binance’s CFTC lawsuit means for the broader crypto industry – and the impact could be far-reaching. “Crypto is under attack,” Yankun Guo, a partner at Chicago-based law firm Ice Miller, told TechCrunch+. “The past six months has seen a flurry of complaints and enforcement actions against blue chip names including Coinbase, Kraken and KuCoin, and it was only a matter of time before Binance had its turn. .” The ultimate impact on Binance could send shockwaves through the global digital asset market, another market participant noted.
Former FTX CEO Sam Bankman-Fried Accused of Bribing Chinese Officials
A (former) executive from another crypto exchange also made headlines this week, but for different reasons. US prosecutors have filed a superseding indictment against former FTX CEO Sam Bankman-Fried, alleging he bribed Chinese officials. According to court documents from the U.S. District Court for the Southern District of New York, “circa 2021,” Bankman-Fried “authorized and directed a bribe of at least $40 million to one or more government officials.” Chinese”.
Are cryptocurrencies commodities or securities? Depends on which US agency you are applying to (TC+)
It’s a confusing time to be a crypto business. Markets are volatile and business activity is fragile at the moment, but the biggest problem for crypto businesses seems to be that there is no clarity at the moment on which laws they are supposed to align with. . In the CFTC’s latest lawsuit against Binance, it alleged that some cryptocurrencies were commodities — a view that diverges from another major US government agency, the Securities and Exchange Commission (SEC), which considers most crypto assets (apart from Bitcoin) such as securities.
US and South Korea both seek Do Kwon’s extradition to face charges
Do Kwon, the founder of Terraform Labs, which operated the stablecoin TerraUSD and its sister token LUNA, was arrested last week in Montenegro as he tried to board a flight to flee to Dubai with forged documents. And after? We don’t know which country Kwon will be sent to, as he now faces criminal charges in the United States as well as in his native South Korea. And both countries appear to be seeking Kwon’s extradition.
Coinbase executives weigh in on the future of crypto in the US amid regulatory review (TC+)
Coinbase received a Wells notice from the US Securities and Exchange Commission last week, and company executives took to Twitter Spaces to discuss the decision and Coinbase’s next steps to create legal frameworks for the world of cryptography. “Regulators should come up with the rules, tell everyone the rules and we follow them,” CEO Brian Armstrong said during the conversation. “The current laws are unclear and we would like to see more clarity.”
The last capsule
For last week’s episode, Jacquelyn interviewed Emin Gün Sirer, Founder and CEO of Ava Labs.
Ava Labs has raised a total of around $640 million, according to Crunchbase, and is backed by companies like a16z and Polychain Capital. In recent months, Ava Labs announced a number of partnerships with big brands and companies, like Amazon Web Services, which TechCrunch covered exclusively.
Ava Labs created the Avalanche Layer 1 blockchain, a platform that enables developers to build multifunctional blockchains and decentralized applications with a focus on speed and low transaction costs.
We talked about Gün Sirer’s journey; why he launched the layer 1 blockchain, Avalanche, in 2020; if the space has too many L1s; and how blockchains can scale more efficiently.
We also discussed:
- How Layer 2 Vision is Shattered
- US Regulatory Crackdown on Crypto
- Growth of Ava Labs in Asian markets
- Blockchain partnerships and business development
- Ava Labs Focal Point for 2023 and Beyond
To subscribe to Chain reaction on apple podcast,Spotify or your favorite pod platform to follow the latest episodes, and leave us a comment if you like what you hear!
follow the money
- Crypto wallet company Ledger raises another $108 million
- Web3 Protocol Polytrade raises $3.8 million to improve global trade
- Blockchain startup Fetch.ai grabs $40 million to provide monetization and other tools for AI-generated insights
- Aptos-based protocol Econia Labs raises $6.5 million to build decentralized order books
- Eigen Labs Closes $50M Series A Funding Round Led by Blockchain Capital
This list was compiled with information from Messari as well as TechCrunch’s own reports.
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