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SEC declares war on crypto
Everything you need to know about SEC vs. Binance
Gm☀️
This week, amidst big headlines everywhere, one name stands out - Gary Gensler, aka crypto’s supervillain.
Today, we'll dive into the news of SEC vs. Binance, a development that could shake up the industry's future in the US.
📈 MARKETS
| This Week | This Year | ||||||
| $26,339 | ▼ 3.2% | ▲ 59.2% | |||||
| $1,832 | ▼ 2.2% | ▲ 53.2% | |||||
| 13,105 | ▲ 1.3% | ▲ 24.1% | |||||
| 4,268 | ▲ 2.1% | ▲ 10.8% |
While bitcoin and ether took a hard hit from the SEC’s litigations against Binance and Coinbase, stocks performed well with the debt ceiling crisis resolved, strong jobs numbers, and the AI hype at its peak.
Nasdaq just wrapped up its sixth consecutive winning week, the longest since 2020. But some are side-eyeing this rally, because bearish bets from hedge funds are at their peak since 2007.
DONUT HOLES
Hole lot of news…
Atomic Wallet hack losses top $35 million
Apple releases Vision Pro, making VR headsets cool
Do Kwon may spend most of his life behind bars
Louis Vuitton to sell $42,000 physical-backed NFTs
REGULATIONS
SEC declares war on crypto
On Monday, the Securities and Exchange Commission (SEC) sued the world’s largest crypto exchange, Binance, and its CEO, Changpeng Zhao (CZ). It looks like US regulators are getting serious about crypto after former Binance rival FTX's collapse.
The SEC says Binance tricked investors, inflated trade volumes, operated an illegal securities exchange in the US by channeling customer funds to a third-party company under CZ’s control, and a bunch of other illegal stuff.
We’re here to tell you just 4 things you need to know:
1/ The snitch
Looks like Binance may have a mole problem. Part of the lawsuit against them involves “failure to restrict access for US investors,” and it comes from a leaked convo in which Binance’s CCO says, “On the surface we cannot be seen to have US users but in reality, we should get them through other creative means.” They’re also accused of operating as an unlicensed exchange in the US, and the SEC even took it to Twitter to publicize the leaked convo, on a big red poster. We don’t know if these chats were actually leaked or if the CCO let them have it. Nonetheless, they’re going to act as critical evidence against Binance in the court. |  |
2/ Buy the dip
CoinGecko
When the news broke, BTC and ETH plummeted 5% within hours to around $25,000 and $1800, respectively. But hey, they dusted themselves off just as quickly, making it a sweet deal for those on "dip watch".
Now, if you're Team Bitcoin, don’t let this Binance drama rattle your cage. Here's why: (1) The big bad lawsuit is not after Bitcoin, and (2) even the SEC agrees that Bitcoin isn't a security, which means it’s out of their playground. So keep calm and HODL on!
3/ Major altcoins take a dip
Lyllah Ledesma, Messari
Twelve crowd-favorite altcoins, like BNB, Cardano, Solana, and Polygon were listed as securities on the filing, and the unsuspecting victims quickly lost around 12~20% in value. There’s a reason we always tell you to “just buy Bitcoin” if you want to be safe!
Here's the deal: if a token is branded as 'security' within Uncle Sam's territory, it can make other exchanges worldwide follow suit and delist them from their platforms.
But, just because this time they are the Titans of Tokens, the heavy lifters of the crypto market, the exchanges may not give up without a fight; delisting all of them would make a noticeable dent in the exchange’s revenues.
4/ What’s next?
Remember that heads-up we gave you in our tweet? The SEC is flexing its muscles and has asked US court to put a freeze on Binance's US funds. If this request goes through, our US readers might find themselves unable to withdraw funds from Binance.US. So, you might want to get your digital wallets in order, just in case.
But there's more. The SEC has also asked for a full-scale Binance ban in the US. Who's popping the champagne? Probably Coinbase, even if they're also having a bit of a legal tussle with the SEC. At least Cathie Wood thinks so: ARK Investment just bought $21.6M more Coinbase shares, just when the stock dipped due to SEC’s lawsuit.
Our take: Looks like the US isn't ready to roll out the red carpet for mainstream crypto just yet. Their approach is in stark contrast to China and Hong Kong, who are slowly opening up to crypto.
Before the tide completely turns, it's crucial that the US creates an environment where crypto projects can flourish. The goal should be to retain major crypto projects on home turf, not scare them away.
💰 REWARD QUIZ
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🐦 TWEET OF THE WEEK
SEC protecting us
— IXFI | Gen 3.0 Exchange (@ixfiworld)
5:58 AM • Jun 6, 2023
SEC continues to claim that their litigations are to “protect users”.
FAILED to catch FTX ($8bn fraud & bankruptcy)
FAILED to protect Grayscale investors ($8bn impairment)
FAILED to protect Voyager, Genesis, BlockFi borrowers ($4bn+ bankruptcies)
Alright, that's a wrap for now 🙌. If you made it to here, let us know by voting below. Catch you next Thursday!
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