Coin360 Daily Dispatch | Crypto Market Updates & Highlights | June 6, 2023

Crypto Market Update

Written by Van

Table of Contents

Banking and Regulatory Updates

• SEC Files Lawsuit Against Coinbase and Binance for Unregistered Securities
• Binance Users Withdraw $1.5 Billion Amid SEC Lawsuit
• SEC Chief Gensler Defends Legal Position on Crypto Amid Lawsuits
• US Congress Members Demand Tax Regulations for Crypto Industry
• Implementation of U.S. Crypto Rules Could Take Years, Says CFTC Chair

Crypto Market Performance

• Crypto Prices Rise Despite Increased Regulatory Scrutiny
• Crypto Investment Products Witness Seventh Week of Net Outflows
• Heavy Work on Shibarium Beta Disrupts Puppyscan, SHIB Burn Rate Down

Crypto Exchanges and Platforms

• Kraken Experiences Temporary Technical Glitch Affecting Deposits and Withdrawals
• Turbos Finance Introduces Smart-Routing for Stablecoin Swaps on Sui Blockchain
• Curve Finance Votes to Onboard Lido's Liquid Staking Token

Security and Fraud

• Funds from Atomic Wallet Hack Allegedly Moved to Crypto Mixer

Innovation and Development

• Bitcoin Developers Debate Introduction of Meme Tokens
• Swift and Chainlink Partner to Test Inter-Blockchain Asset Transfer
• Illuvium and GameStop to Launch Collection of 20,000 NFTs

Insurance and Crypto

• Insurance Firm Raises $19 Million for AI-Aided Bitcoin-Denominated Policy

SEC Files Lawsuit Against Coinbase and Binance for Unregistered Securities

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Coinbase, accusing the cryptocurrency exchange of operating as an unregistered broker and offering unregistered securities. The SEC claims that several tokens listed on Coinbase qualify as securities. The lawsuit follows a similar action against Binance, indicating increased regulatory scrutiny of the crypto industry. 

So far, the SEC has included BNB, BUSD, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, COTI, CHZ, FLOW, ICP, NEAR, VGX, DASH, NEXO as securities in its lawsuit against Coinbase and Binance, while ETH stay untouched. More details can be found here and here.

Binance Users Withdraw $1.5 Billion Amid SEC Lawsuit

Binance users withdrew nearly $1.5 billion following the Securities and Exchange Commission's (SEC) lawsuit alleging securities violations. The SEC accused Binance of luring US customers and commingling funds. Assets on the platform were valued at $60.5 billion. Binance Coin and other cryptocurrencies were labeled unregistered securities. The SEC claimed CEO Changpeng Zhao facilitated evasion of US regulations. Outflows from Binance likely went to US residents to avoid potential frozen assets. 

SEC Chief Gensler Defends Legal Position on Crypto Amid Lawsuits

SEC chief Gary Gensler denies muddying legal position on crypto as agency sues Binance and Coinbase for unregistered securities exchanges. He argues that the U.S. doesn't need more digital currency and compares the cases to FTX's founder's criminal case. Gensler aims to prove that tokens traded on these platforms should be registered as investment contracts. The SEC's suit doesn't allege fraud by Binance CEO CZ Zhao but seeks civil penalties and a permanent ban on his involvement with securities issuers.

US Congress Members Demand Tax Regulations for Crypto Industry

Two US Congress members have written a letter to the Treasury and IRS demanding tax regulations for the crypto industry, citing concerns about tax evasion. They also called for the prompt release of proposed regulations to bring the industry into tax compliance. The Biden administration previously proposed a 30% tax on crypto mining, but it did not make it into recent legislation. Crypto proponents believe the tax may be reintroduced in the future. The White House has not responded to inquiries about its plans for the tax.

Implementation of U.S. Crypto Rules Could Take Years, Says CFTC Chair

New U.S. crypto rules could take years to implement, says CFTC Chair Rostin Behnam. Funding and legislation are needed for the CFTC to regulate digital asset spot markets effectively. The CFTC has requested increased funding and more authority to regulate digital assets directly. Recent crypto failures have heightened the urgency for increased regulations. Legislation has been introduced to grant more authority to the CFTC and establish a defined pathway for digital assets to become commodities. 

The Commodity Futures Trading Commission has approved Cboe Clear Digital's amended order to clear digital asset futures, expanding its clearing services for crypto derivatives within the regulated market structure. Prudent risk-mitigation measures were implemented.

Crypto Prices Rise Despite Increased Regulatory Scrutiny

There is a rise in crypto prices despite regulatory concerns from the US SEC. Bitcoin, Ethereum, Dogecoin, and Shiba Inu are performing well, while some other cryptocurrencies face potential security labeling. The SEC's actions may impact the US crypto sector and slow down adoption. The SEC's lawsuit against Binance has caused the prices of BNB and CAKE to drop by more than 8% and 9% at one point, respectively. Binance argues that BNB is not a security but a native token for creating an internal economy. 

Crypto Investment Products Witness Seventh Week of Net Outflows

Crypto asset investment products experienced a seventh consecutive week of net outflows, reaching $62 million, indicating bearish sentiment. Withdrawals were driven by closing short positions rather than a shift in opinion. Tron had the most outflows, while the short Bitcoin fund saw net outflows of $6.3 million, potentially due to short covering. BTC's price decline allowed short position traders to exit with gains. Overall, trading activity and volume remained low, and BTC's Open Interest decreased slightly.

Heavy Work on Shibarium Beta Disrupts Puppyscan, SHIB Burn Rate Down

Shibarium beta "Puppynet" is undergoing heavy work, causing blockchain explorer Puppyscan to be unavailable. In the last 24 hours, 5,752,944 SHIB tokens were burned, with the SHIB burn rate down 2.64%. The crypto market has suffered a downturn after the SEC filed a class action lawsuit against Binance and its CEO for allegedly breaking federal securities laws.

Kraken Experiences Temporary Technical Glitch Affecting Deposits and Withdrawals

Kraken crypto exchange experienced a technical glitch affecting Bitcoin, Ethereum and ERC-20 tokens, causing deposit and withdrawal delays. The issue was resolved within a few hours. Kraken is one of the oldest crypto exchanges, supporting over 200 cryptocurrencies and six fiat currencies. The SEC's legal action against Binance and Coinbase has created uncertainty for Kraken and other exchanges with a presence in the US.

Turbos Finance Introduces Smart-Routing for Stablecoin Swaps on Sui Blockchain

Turbos Finance, a DEX on Sui blockchain, introduces smart-routing for stablecoin swaps, enabling trading of various bridged USDC assets against native Sui assets. Turbos becomes the second largest DEX on Sui, which has a $2 billion valuation and numerous projects on its network.

Curve Finance Votes to Onboard Lido's Liquid Staking Token

Token holders of Curve Finance voted to onboard Lido's liquid staking token, stETH, allowing Curve's stablecoin, crvUSD, to scale by increasing the debt ceiling by 15 times. The move positions crvUSD for significant growth and makes it a viable option for more LST holders. The vote also increases the limit on PegKeepers pools. crvUSD has been trading within a 0.5% price range since its launch.

Funds from Atomic Wallet Hack Allegedly Moved to Crypto Mixer

Funds from the $35 million Atomic Wallet hack have reportedly been moved to a crypto mixer that has previously been used to launder over $100 million in crypto assets stolen by North Korea's Lazarus Group. Blockchain compliance analytics firm Elliptic traced the funds to Sinbad.io, which it believes is a rebranded version of Blender.io, the first mixer to be sanctioned by the US Treasury Department. Atomic Wallet's chief marketing officer said the team is "doing everything they can to get those funds back".

Bitcoin Developers Debate Introduction of Meme Tokens

Bitcoin developers debated the introduction of meme tokens via the BRC-20 standard, causing a rift in the community. Some saw it as an interesting experiment, while others believed it went against Bitcoin's fundamentals. The market cap of these tokens dropped, indicating a decline in interest.

Swift and Chainlink Partner to Test Inter-Blockchain Asset Transfer

Swift and Chainlink are partnering with major financial institutions to test the connection of multiple blockchain networks. The goal is to transfer tokenized assets across blockchains and increase efficiencies and reduce costs in capital markets. The collaboration is seen as a significant step for both financial institutions and the crypto industry.

Illuvium and GameStop to Launch Collection of 20,000 NFTs

Ethereum game developer Illuvium is partnering with GameStop to release a collection of 20,000 nonfungible tokens (NFTs) called "Illuvitars." Each NFT represents a unique avatar with different expressions and power ratings. NFT holders will gain early access to Illuvium's games and other benefits. GameStop had previously chosen Ethereum's Immutable X for its NFT marketplace, but its daily fee revenue dropped significantly during the crypto bear market. The highest-trading NFT collection on GameStop is Buck Season II.

Insurance Firm Raises $19 Million for AI-Aided Bitcoin-Denominated Policy

Life insurance company Meanwhile Insurance Bitcoin (Bermuda) raised $19 million to develop an AI-aided bitcoin-denominated policy. The company plans to use AI for underwriting, claims, and operations, targeting US citizens with significant BTC holdings. The insurer is unaffected by BTC price volatility but policyholders face risk based on price changes.

Top Altcoin Gainers and Losers

Gainers:

Pepe PEPE (+13.9%)

ApeCoin APE (+11.8%)

Optimism OP (+11.6%)

Losers:

Polygon MATIC (-4.8%)

BitTorrent BTT (-4.4%)

Decentraland MANA (-3.1%)

NFT Market Map

Fractal, a Web3 gaming startup and NFT marketplace, has introduced FStudio, a product aimed at helping game developers integrate crypto features without coding. FStudio enables the creation, acquisition, and monetization of in-game assets as NFTs, offers credit card payments for in-game crypto items, and allows developers to establish their own in-game NFT shops. Fractal also provides a game launcher and platform for developers to showcase their games. The company focuses on a Web2-friendly approach, prioritizing gameplay and organic game economies over play-to-earn models.

Louis Vuitton introduces the "Treasure Trunks" collection, combining physical and digital elements through NFTs. Owners gain access to future products, experiences, and a community, bridging the virtual and physical realms. The VIA initiative offers exclusive pathways to coveted items, emphasizing traceability and engaging with the NFT audience. The VIA Treasure Trunk, priced at €39,000, unlocks unseen designs on the luxury brand's digital collectibles portal. Limited quantities maintain rarity. Fans can join a waiting list and selected invitees can purchase their own trunk.

This article has been refined and enhanced by ChatGPT.