Coin360 Daily Dispatch | Crypto Market Updates & Highlights | August 29, 2023

Crypto Market Update

Written by Van

Table of Contents

Regulatory and Legal Updates

• Grayscale's Legal Win Boosts Bitcoin
• Binance Mulls Russian Exit Amid Regulatory Heat
• SEC's Sealed Motion Fuels Binance Speculation
• Spot Bitcoin ETF: A Labor Day Launch?

Token and Asset Management

• Token Unlocks Shake Up Crypto Communities
• Whale Buys Ethereum After Grayscale's SEC Victory

Social Media and Community

• Friend.tech Faces Backlash Over Copycat Policy
• Yearn Finance Rejects Wintermute Trading's Token Loan

Country-Specific Developments

• CoinSwitch and CoinDCX Cut Staff Amid Market Slump
• Mercado Pago Brings USDC Payments to Chile

Crypto Exchanges and Platforms

• Twitter Payments Expands Crypto Services in Rhode Island
• Genesis and DCG Agree on Bankruptcy Plan
• Canaan Reports Mixed Q2 Financials
• Tradeteq Rolls Out Tokenized U.S. Treasury Bonds on XDC

Market Trends and Analysis

• Crypto Funds See Largest Weekly Outflows Since March
• Polygon Labs Unveils Chain Development Kit

NFT Market

• SEC Charges Impact Theory Over NFT Offering

Grayscale's Legal Win Boosts Bitcoin

Bitcoin (BTC) reached two-week highs at nearly $28,000 after digital asset manager Grayscale won a lawsuit against US regulators. The court ruled that the US Securities and Exchange Commission (SEC) was wrong to reject Grayscale's application to launch a Bitcoin exchange-traded fund (ETF). Grayscale now joins other firms waiting for approval to launch the first US spot Bitcoin ETF. 

Analysts believe that this ruling could have a positive impact on other ETF applications, including BlackRock's. The Grayscale Bitcoin Trust discount has decreased from -25% to -17% after the company's legal victory against the SEC.

Binance Mulls Russian Exit Amid Regulatory Heat

Binance, the largest crypto exchange, is considering withdrawing from the Russian market due to regulatory pressure. The move follows accusations from US regulators that Binance failed to comply with their sanctions against Russia. 

However, Binance claims to have restricted trading operations involving Russian banks that are under sanction. The company has also faced regulatory challenges in other countries, including the US, the Netherlands, Germany, and the UK.

SEC's Sealed Motion Fuels Binance Speculation

The US Securities and Exchange Commission (SEC) has submitted a sealed motion in its case against cryptocurrency exchange Binance, leading to speculation that more negative news is on the horizon for the firm. 

The motion included over 35 exhibits and a declaration from an SEC trial attorney. Filing court documents under seal is described as a "rare move" that suggests the SEC is either avoiding interference with a criminal investigation or is concerned about the safety of a witness or company.

Spot Bitcoin ETF: A Labor Day Launch?

The launch of a spot Bitcoin ETF in the US could occur just before Labor Day, with the SEC expected to respond to applications from BlackRock, Bitwise, WisdomTree, VanEck, and Invesco in the following days, as per Bloomberg Intelligence. 

While some believe the SEC will approve the ETF, others predict further delays. BlackRock's application is seen as having a higher chance of success, due to its trusted reputation and previous experience in the field.

Token Unlocks Shake Up Crypto Communities

ApeCoin and Axie Infinity are planning token unlocks that will unlock 11% of their respective market caps. ApeCoin will release 212M APE tokens worth $58.5 million on September 16, while Axie will release 14.8M AXS tokens worth $71 million on October 20. Other projects like Optism also have significant token unlocks scheduled. 

SUI and HBAR tokens are experiencing a drop in prices as both projects prepare for upcoming token unlocks. SUI is down 7% at $0.54, and HBAR is down 4% at $0.05. 

SUI plans to increase token allocation for staking subsidies, while Hedera will allocate 1.15 billion HBAR for network governance, purchase agreements, and ecosystem development. HBAR previously surged 15% after integration with the U.S. Federal Reserve's FedNow platform. The crypto coin prices have been fluctuating, but notably, the market cap for HBAR has soared past the $2 billion mark. 

DeFi platform dYdX also plans to unlock $14.02 million worth of its DYDX tokens, with $5.36 million allocated to the community treasury and the rest distributed to liquidity providers and traders as rewards. 

Whale Buys Ethereum After Grayscale's SEC Victory

As Ethereum market cap rose, a giant cryptocurrency whale purchased 8,000 Ethereums for 13.66 million USDC on UniSwap right after Grayscale won its lawsuit against the SEC. The whale now holds 37 million dollars of ETH, 17 million dollars of USDC, 340,000 dollars of RBN, 100 thousand dollars of BLUR, and 82 thousand dollars of TON tokens. 

According to cryptocurrency charts from Santiment, Ethereum's transaction volume has been low, indicating disinterest among traders. Additionally, large investors with holdings between 10 and 10,000 ETH have been continuously selling for the past four months. However, the development activity of the asset remains strong, suggesting long-term potential.  

Friend.tech Faces Backlash Over Copycat Policy

Friend.tech, a decentralized social media app, received criticism for threatening to punish users who use copycat versions of its platform. The company stated that users who switch to forks or copies will forfeit their existing points. 

This decision sparked negative reactions from the crypto community. However, the founder later apologized and retracted the statement. Additionally, Friend.tech has seen a decline in key metrics such as activity, inflows, and transaction volume since its public launch.  

Yearn Finance Rejects Wintermute Trading's Token Loan

Wintermute Trading, one of the biggest market makers in the crypto industry, has failed to convince Yearn Finance supporters to loan it 350 YFI tokens, worth more than $2 million, in exchange for helping to support markets for Yearn’s yCRV token. Voters rejected the move as unfair and contrary to Yearn's principles of decentralization.

CoinSwitch and CoinDCX Cut Staff Amid Market Slump

Indian crypto investment platform CoinSwitch has laid off 44 employees, around 7% of its workforce, due to low market activity. The company has hired around 60 new employees since April, with most of the hires in product tech and compliance. The layoffs come as rival platform CoinDCX also cut 12% of its staff due to a bear crypto market and India's tax regime.

Mercado Pago Brings USDC Payments to Chile

In a move that could influence cryptocurrency charts, Latin American digital payment platform Mercado Pago has started offering USDC payments in Chile. Circle CEO Jeremy Allaire praised the move, citing the significant non-US adoption of stablecoins, particularly in emerging markets like Latin America. 

Circle has partnered with Mercado Libre, the e-commerce firm behind Mercado Pago, to bring USDC access to Chilean citizens. Mercado Libre previously launched its own Ethereum-based token, MercadoCoin, in Brazil.

Twitter Payments Expands Crypto Services in Rhode Island

Twitter Payments, owned by Elon Musk's X company, has gained a license to process cryptocurrency payments in Rhode Island. This brings the total number of states where Twitter Payments can conduct crypto transactions to seven. 

Following the announcement, the crypto price of Dogecoin experienced a 4.34% uptick, which is favored by Musk. In a tweet, Musk also hinted at the possibility of Tesla accepting Dogecoin payments in the future.

Genesis and DCG Agree on Bankruptcy Plan

Crypto lender Genesis and its parent company Digital Currency Group (DCG) have agreed on a Chapter 11 bankruptcy plan that could provide unsecured creditors with recovery rates of up to 90% in USD and digital assets. DCG is expected to inject over $1 billion in new debt facilities into Genesis, while also securing financial concessions. The agreement still needs approval from the bankruptcy court and Genesis' creditors.

Canaan Reports Mixed Q2 Financials

Canaan, a Bitcoin mining company, reported $73.9m in revenue in Q2 2023, up 33% from Q1. The company attributed the surge in revenue to the recovery in Bitcoin prices and increased Bitcoin rewards. 

However, it also reported significant net losses of $110m, up 31% on Q1, due to non-cash accruals and provisions reflecting changes in selling prices, regulatory shifts, and partner agreements. Canaan's total computing power sold reached 6.1 million terahashes per second, up 45% quarter-on-quarter.

Tradeteq Rolls Out Tokenized U.S. Treasury Bonds on XDC

Tradeteq has launched tokenized U.S. Treasury bonds on the XDC Network, allowing professional investors to access shares in a U.S. Treasury bond exchange-traded fund (ETF) via the platform. 

Tokenization of real-world assets, such as government bonds, could grow into a $5tn market, according to experts, with demand for tokenized Treasuries rising nearly sixfold to $622m so far this year. Other blockchains, including Stellar and Ethereum, are also competing to be the premier venue for tokenized assets.

Crypto Funds See Largest Weekly Outflows Since March

According to a report by CoinShares, cryptocurrency funds experienced their largest weekly outflows since March, with a total outflow of $168 million. Bitcoin saw the biggest outflow, totaling $149 million, while Ethereum saw an outflow of $17 million. Altcoins like XRP and Litecoin saw small inflows. 

The report also noted low trading volume and lack of direction in the market. Outflows were observed in multiple countries, including Germany and Canada. 

Polygon Labs Unveils Chain Development Kit

Polygon Labs has released a Chain Development Kit (CDK) for developing Layer 2 blockchains on Ethereum. The CDK allows developers to create zero-knowledge proof powered chains and connect to them through a shared ZK bridge, enabling interoperability. The CDK will be open-sourced, and it supports an "Interop Layer" protocol that aggregates zero-knowledge proofs from multiple Polygon chains.

Top Altcoin Gainers and Losers

Gainers:

Bitcoin Cash BCH (+17.14%)

Stacks STX (+12.98%)

XDC Network XDC (+11.93%)

Losers:

Synthetix SNX (-0.77%)

Kaspa KAS (-0.12%)

First Digital USD FDUSD (-0.02%)

NFT Market Map

SEC Charges Impact Theory Over NFT Offering

The SEC has charged Impact Theory for conducting an unregistered offering of NFTs. Two SEC commissioners have issued a dissenting statement, questioning the SEC's application of securities laws to NFTs and raising broader concerns about its approach to the asset class. 

They argue that the promises made by Impact Theory do not form an investment contract under securities laws and that the SEC should have offered guidance on NFTs before taking enforcement action. The commissioners pose several questions that the SEC needs to address regarding the categorization, regulation, and registration of NFTs.

This article has been refined and enhanced by ChatGPT.