Coin360 Weekly Dispatch | Crypto Market Updates & Highlights | June 29 - July 5, 2024

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Crypto Weekly Market Update

Table of Contents

Market Updates

• Crypto Weekly Recap
• Mt. Gox Transfers 47,229 BTC, Market Faces 8% Drop
• SEC Sues ConsenSys Over MetaMask's Broker Activities
• Bittensor Exploit: $8 Million Stolen, TAO Price Plummets
• Polkadot Faces Backlash Over $87 Million Treasury Spending
• Spot Solana ETF Fails to Sustain Impact: Kaiko Analysis

Regulatory and Compliance News

• Circle Complies With EU's MiCA Regulatory Framework
• South Korea Implements Crypto Transaction Monitoring

Corporate Developments

• Sony to Launch Crypto Exchange in Japan
• Robinhood Crypto Expands to All 50 States

Legal Issues

• Binance Scores Partial Win in SEC Case
• Blur Marketplace Phishing Scam Costs User $240,000 in NFTs
• US Courts to Decide if NFTs Are Securities

Crypto Weekly Recap

Bitcoin:

• Weekly change: -8.13%
• BTC created a mini bull trap, rising to $63,700 from $60,200 on Monday.
• However, it quickly declined under $63,000 due to weak bullish sentiment and Mt. Gox's repayment announcement.
• CoinShares reported a $30 million outflow across the digital asset market, marking three weeks of negative trends. Source
• Metaplanet purchased another 20 Bitcoin, bringing its total to 161 BTC.
• BTC dropped further as the German and US governments executed significant Bitcoin and Ethereum movements. German authorities transferred 1,500 BTC, including 400 BTC to exchanges, while the US moved 3,375 ETH seized from fraudsters.
• On Tuesday, a Bitcoin entity transferred $114 million worth of BTC to Binance, causing Bitcoin's price to dip below $63,000. Source
• On that day, Bitcoin ETFs saw the largest inflow since June 7 ($129 million), with Fidelity leading at $65 million. Hashdex’s Bitcoin-Ethereum ETF got SEC approval but couldn't push the price up due to miners' financial strain post-halving and German BTC sell-offs.
• Bitfinex analysts reported that long-term Bitcoin holders resumed profit-taking, marking a notable shift from their pause since early May. Source
• On Wednesday, Bitcoin dropped below $60,000 amid renewed concerns over Mt. Gox's Bitcoin repayments, triggering a 3% decline to $59,700. Source
• On Thursday, Bitcoin fell further to $57,000, influenced by cautious Fed minutes. The Federal Reserve decided to maintain current interest rates due to concerns over high inflation and economic uncertainties.
• The BTC price continued to fall as the German government sold an additional 3,000 BTC and ETF speculation declined. Mt. Gox moved $2.7 billion in Bitcoin to a new wallet, starting its repayment process, causing BTC to drop to $53,500, its lowest in four months, amid a 29 Fear & Greed Index.
• Since June 19, the German government has transferred 5,587 BTC worth $343 million to exchanges and OTC services for potential sell-off, and transferred 6,478 BTC worth $396 million to another address dubbed 139Po. It now holds 41,226 BTC worth $2.34 billion. Source

• Justin Sun offered to buy $2 billion in Bitcoin from Germany to minimize market impact as CryptoQuant reported a $2.4 billion BTC sell-off by new holders this week. Source
• Despite short-term bearish trends, analysts remained optimistic about long-term prospects, expecting potential catalysts like Federal Reserve rate cuts and SEC approval of an Ethereum ETF. Source
• Bitcoin's potential for price increase was tied to the U.S. economic landscape, where the unemployment rate rose to 4.1%. The U.S. added 206,000 jobs in June, above the expected 191,000 but lower than May's revised figure of 218,000. Analysts speculated this could prompt rate cut expectations, boosting Bitcoin as an inflation hedge. Source

Ethereum:

• Weekly change: -4.71%
• An Ethereum whale moved $24 million worth of ETH to Kraken when the price surpassed $3,500 on Monday. Source
• Last month, Ethereum staking surged with nearly 60,000 new depositors, increasing participation by 4%. This growth aligned with optimistic predictions for upcoming Ethereum ETFs. Source
• On Tuesday, an Ethereum whale, likely Abraxas Capital, moved 60K ETH ($206M) off Bitfinex. Source
• Lido saw a 100k increase in staked Ethereum despite SEC scrutiny on Wednesday. Source
• Bitwise filed an S-1 form for a spot Ethereum ETF, but a delay on July 2 led to decreased optimism. Analysts now eye July 8 for a potential launch. Ethereum saw outflows totaling $61 million, the largest since August 2022, impacting market sentiment. Source
• ETH dropped below $3,000 for the first time since mid-May, hitting $2,850 during Friday's market crash that caused $588.22M in liquidations, with $444.91M belonging to longs. Several altcoins dropped to their multi-month lows too. Source
• Ether ETFs may underperform compared to Bitcoin ETFs, with lower expected inflows. A Bloomberg analyst predicts Ether ETFs will be overshadowed by Bitcoin's popularity due to Ethereum's complex DeFi ecosystem. Source

Altcoins:

• Binance added monitoring tags to Balancer, Cortex, PowerPool, Convex Finance, Dock, Kava Lend, IRISnet, MovieBloc, Polkastarter, Status, and Sun (Source).
• Aave Labs received a 12-month grant to develop V4 iteration (Source).
• LayerZero CEO dismissed claims of critical vulnerability as ‘baseless’ (Source).
• Tether launched USDT payments for social security contributions in the Philippines (Source).
• Pump.fun meme coin launchpad surpassed $50M in revenue (Source).
• Starknet Foundation launched DeFi Spring 2.0 with a 90M STRK budget until December 31, 2024 (Source).
• Token merger of SingularityNET, Fetch.ai, and Ocean Protocol went live (Source).
• Solana meme token Chewy soared 15 times in price following Keith Gill’s disclosure (Source).
• Coinbase will custody digital assets for the US Marshals Service (Source).
• Crypto-friendly Silvergate Bank paid $63M to settle charges with SEC, Fed, and California Regulator (Source).
• $3B in token unlocks from ENS to OP are coming (Source).
• Pendle saw a 40% drop in TVL (Source).
• Denmark did not propose banning self-custody wallets (Source).
• ZKsync unveiled a vision for an elastic chain ecosystem after the 3.0 upgrade (Source).
• Paxos gained approval for a Singapore stablecoin launch with DBS partnership (Source).
• Chromia announced MVP mainnet launch, activating core ecosystem functions (Source).
• Pixels team explored crypto game expansion with potential Telegram integration (Source).
• Solana meme coin Billy soared to $117 million market cap (Source).
• Astar Network burned 350 million ASTR allocation for auction (Source).
• Aave launched GHO stablecoin on Arbitrum (Source).
• Sentient Labs raised $85 million in seed funding led by Founders Fund, Pantera Capital, and Framework Ventures (Source).
• HashKey airdropped its native token via Telegram tap-to-earn game (Source).
• Optimism unlocked over 31 million OP tokens worth over $54 million (Source).
• DeFi protocol Clearpool launched on Coinbase’s Base blockchain (Source).
• Mantra tokenized $500M real estate assets for UAE builder MAG Group (Source).
• Fidelity & Sygnum tapped Chainlink for tokenized asset data (Source).
• Bitget engaged in ‘active discussions’ to obtain India license (Source).
• Sydney Sweeney's X account was compromised by a fake meme coin (Source).
• Holograph protocol was sabotaged by a disgruntled contractor (Source).
• Gala Games and Animoca Brands joined forces (Source).
• Worldcoin recruited former executives from Google, X, and Apple to improve privacy and security (Source).
• KuCoin VAT charge raised concerns among Nigerian crypto community (Source).
• Consensys acquired Wallet Guard to enhance MetaMask security (Source).
• Venture capitalists invested $3.2 billion in the crypto sector in Q2, as reported by Galaxy Digital (Source).
• Indian crypto exchange Coindcx went global with Bitoasis acquisition (Source).
• DeFi lender Liquity underwent a “friendly fork” in V2 upgrade (Source).
• Blast allocated 10 billion tokens in phase 2 rewards (Source).
• Centralized exchange losses to hacks increased by 1,000% this year, according to ImmuneFi (Source).
• Toncoin outshined top 50 tokens with over 40% rise in Q2 2024 (Source).
• Notcoin launched an accelerator to boost Telegram crypto games (Source).
• Kamala Harris memecoin surged 250% amid calls for Biden to bow out (Source).
• New Zealand cracked down on crypto investors avoiding tax disclosures (Source).
• DWF Labs launched $20M Cloudbreak Fund for Chinese projects (Source).
• Friend.tech hit an all-time low after announcing it would stay on Base L2 (Source).
• Tangem introduced a Visa-integrated crypto wallet for secure payments (Source).
• ZkSync denied NFT ‘insider minting,’ claiming some minters attended events (Source).
• Bybit entered Switzerland’s crypto market amid MiCA regulation implementation (Source).
• Jupiter Exchange distributed $60M in rewards; Upbit listed JUP in the Solana ecosystem (Source).
• Fake Iggy Azalea token buyers awaited refunds as Sahil Arora appeared to cash out (Source).
• Aptos launched keyless wallets that use ZK-proofs to verify identities (Source).
• Web3 users reached an all-time high of 10M in Q2, according to DappRadar (Source).
• Nomis launched TON reputation score, with the first 1M users getting free scores (Source).
• Crypto exchanges became subject to the EU Travel Rule in 6 months (Source).
• Binance Labs led a major funding round for Bitcoin wallet UniSat (Source).

Mt. Gox Transfers 47,229 BTC, Market Faces 8% Drop

Bitcoin's market faced significant turbulence as Mt. Gox moved 47,229 BTC, valued at $2.71 billion, to repay creditors, triggering a sharp 8% price drop to $54,000. This follows the US government's transfer of 237 BTC worth $13.7 million, contributing to ongoing market instability. 

These large-scale transactions, aimed at resolving liabilities and government asset management, underscored heightened volatility and prompted nearly $700 million in liquidations. Investors are advised to monitor these developments closely amid potential further price fluctuations.

SEC Sues ConsenSys Over MetaMask's Broker Activities

The SEC's lawsuit against ConsenSys alleges unregistered broker activities through MetaMask's services, claiming over $250 million in fees collected. This includes facilitating unregistered securities sales via staking programs like Lido and Rocket Pool, impacting tokens such as LDO and RPL with significant price drops. ConsenSys plans to contest the SEC's jurisdiction, emphasizing the case's importance for web3 innovation. 

Experts are divided, with criticisms against SEC overreach and debates on regulatory boundaries. The outcome, similar to past rulings involving Coinbase, could redefine U.S. crypto regulation, reflecting tensions between regulators and blockchain technology evolution.

Bittensor Exploit: $8 Million Stolen, TAO Price Plummets

Bittensor suffered an $8 million exploit on July 2, 2024, stemming from a leaked private key that enabled attackers to drain 32,000 TAO tokens. Promptly responding, Bittensor halted transactions, activated safe mode, and fortified validators behind firewalls by 7:41 P.M. UTC. This incident caused TAO's price to plummet 15% to a six-month low of $227 before partially recovering. 

In response, the OpenTensor Foundation proposed burning 10% of TAO tokens to stabilize prices and restore faith. Future measures include stricter package verifications, more security audits, and enhanced public security policies to prevent similar breaches, aiming to reassure stakeholders and fortify the TAO ecosystem.

Polkadot Faces Backlash Over $87 Million Treasury Spending

Polkadot's recent controversy surrounding its $87 million treasury spending has stirred significant community backlash. The allocation, including $36 million on marketing and outreach, has raised concerns about financial sustainability and ROI. Criticism extends to alleged discrimination within its ecosystem, with Asian project leaders citing challenges in obtaining grants. 

Polkadot's leadership defends its spending, emphasizing continuous treasury replenishment through DOT inflation and decentralized decision-making. Despite a recent DOT price recovery, down 89% from its peak, community voices call for more transparent financial practices and equitable support for diverse projects amidst ongoing debate and scrutiny.

Spot Solana ETF Fails to Sustain Impact: Kaiko Analysis

Kaiko's analysis reveals that the introduction of spot Solana exchange-traded funds (ETFs) initially sparked market enthusiasm, briefly boosting Solana's price by 6%. However, this impact quickly dissipated as market dynamics returned to normal. Regulatory uncertainties surrounding Solana's ETF approval posed a significant challenge, reflecting broader skepticism. 

Despite these setbacks, Solana's ecosystem continues to expand, with its decentralized finance (DeFi) sector showing robust growth. Innovations like Solana mobile and SDKs underline its potential for future adoption. As regulatory conditions evolve, Solana's prospects may improve, albeit amid ongoing challenges in achieving ETF approval.

Circle Complies With EU's MiCA Regulatory Framework

Circle announced its compliance with the EU's MiCA regulatory framework, becoming the first global stablecoin issuer to do so, with an EMI license from France’s ACPR. Circle can now issue USDC and EURC stablecoins in Europe. MiCA, a comprehensive crypto regulatory regime, requires stablecoin users to convert non-compliant stablecoins to regulated ones like USDC, ensuring stability and regulatory protection. 

Tether's CEO expressed concerns over MiCA’s complexity and issuance restrictions. Companies must comply fully by December 2023. Binance has restricted unauthorized stablecoins, urging users to switch to regulated tokens.

South Korea Implements Crypto Transaction Monitoring

South Korea's Financial Supervisory Service (FSS) announced the implementation of a continuous monitoring system for suspicious crypto transactions on exchanges, effective July 19 with the Virtual Asset User Protection Act. The system will report abnormal transactions to the FSS, covering 99.9% of the trading volume. 

Concurrently, the South Korean government has introduced a 24-hour real-time monitoring tool to detect crypto fraud. Crypto exchanges have dispelled fears of mass altcoin delistings, noting that the new law will involve a six-month evaluation period for 1,333 coins and will enforce stricter review guidelines for new token listings.

Sony to Launch Crypto Exchange in Japan

Sony Group is set to launch a crypto exchange in Japan following its acquisition of Amber Japan, expanding its portfolio beyond its $100 billion market value. Amber Japan, formerly part of Amber Group, was rebranded after the fallout involving FTX. Sony Network Communications previously collaborated with Startale Labs to develop its blockchain network. 

The move underscores Sony's strategic shift into cryptocurrencies amidst a broader diversification effort. Regulatory challenges in Japan and a more favorable environment in Hong Kong also influence market dynamics. Sony aims to enhance its presence in the crypto space with user-friendly trading services and a revamped mobile app.

Robinhood Crypto Expands to All 50 States

Robinhood Crypto became available in all 50 U.S. states, Puerto Rico, and the U.S. Virgin Islands, allowing users to trade 15 assets including Bitcoin, Ethereum, Dogecoin, and Avalanche. In May, Robinhood saw $7.1 billion in crypto trades, a 30% decrease from April, while its equities business traded $86.8 billion. 

Expansion was enabled by new licenses and eased state rules. Additionally, Robinhood plans to leverage its $200 million Bitstamp acquisition to offer crypto futures in the U.S. and Europe. The global crypto derivatives market volume reached $3.69 trillion in May, surpassing spot trading volumes.

Binance Scores Partial Win in SEC Case

Binance achieved a partial victory as a federal court dismissed several SEC claims, ruling that crypto tokens and BUSD stablecoin are not securities. This limits SEC's enforcement on secondary market sales. Despite the win, other claims proceed, with Binance.US asserting compliance with U.S. laws and maintaining 1:1 reserves for customer assets. Binance.US criticized the SEC's "regulation by enforcement" and remains confident in its legal position, expecting court validation. The SEC's case against Binance includes allegations of improper asset access by global Binance employees.