Welcome to the latest edition of our Market Roundup, where we cover the highlights of the past week in the rapidly evolving world of blockchain and decentralized technologies.
(as of 1:30 AM UTC, June 16, 2023)
One agency’s actions is sending ripples across the crypto space. It’s the U.S. Securities and Exchange Commission (SEC).
The Commission filed lawsuits against Coinbase and Binance, alleging that a bouquet of cryptocurrencies are unregistered securities, including Cardano (ADA), Polygon (MATIC), and Solana (SOL). Subsequently, the commission-free stock trading and investing app Robinhood announced that it will no longer support trading for ADA, MATIC, and SOL starting from June 27, 2023. Robinhood cited the regulatory uncertainty surrounding these assets as the reason for delisting them. Users have until the deadline to withdraw or sell these assets, after which they will be swapped at market prices, with the proceeds going to the users. The move reduces Robinhood’s crypto offerings from 18 to 15 tokens.
Similarly, trading platform eToro has announced that it will delist four crypto assets, namely MATIC, Decentraland (MANA), Dash (DASH), and Algorand (ALGO), for its US customers. The decision comes as a conclusion of eToro’s review framework, which evaluates crypto assets in light of regulatory changes. Like Robinhood, the move is attributed to recent developments, including legal action taken by the SEC against Coinbase and Binance.
Even though the SEC has taken an aggressive stance against the crypto sector, other jurisdictions around the world are adopting sober attitudes while evaluating ways to regulate cryptocurrency trading and ownership. Check out our recent blog about the friendliest locations for on-chain finance to find out more about how the application and usage of digital assets are evolving around the world.
- Despite recent actions taken by the SEC against Coinbase, crypto payments tech company Circle remains committed to its plans to go public. Circle had previously announced its intention to become a public company through a merger with a special purpose acquisition company (SPAC) but did not complete SEC qualification in time. Circle’s CEO, Jeremy Allaire, reaffirmed the company’s goal of going public, stating that they will continue their journey as soon as practicable. While the current environment presents challenges for companies seeking to go public in the crypto industry, Circle and other players like Galaxy Digital and Kraken are still pursuing their IPO plans. However, the path to an initial public offering may be postponed for most companies until there is stronger business momentum and a more stable business environment in the crypto sector.
- Crypto.com has announced that it will suspend its institutional exchange service for US customers due to limited demand in the current market landscape. The decision comes as a result of the lawsuits faced by other exchanges, such as Binance and Coinbase. The closure of the institutional offering will not impact Crypto.com’s retail trading app or its CFTC-regulated crypto derivatives product, UpDown Options. While the exchange has not provided specific details on the conditions for reopening the institutional platform in the future, it remains a possibility. Earlier this month, Crypto.com received a license for digital payment token services in Singapore, expanding its offerings in the country.
- Binance.US announced that it will temporarily halt all cash deposits and withdrawals and transition to an all-crypto exchange following signals from its banking partners to pause US dollar fiat channels. The decision came in the aftermath of a lawsuit from the SEC and is said to be due to the aggressive and unjustified tactics of the agency. Binance.US had advised customers to withdraw their US dollar funds via bank transfer by June 13, as US dollar deposits will be suspended and US dollar trading pairs will be suspended next week. The native token of Binance, BNB, has experienced a decline in value in recent days.
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- Regulators are taking steps to create conditions for mass adoption of cryptocurrencies with the introduction of new global tax standards. The Organization for Economic Cooperation and Development (OECD) has launched a Crypto-Asset Reporting Framework (CARF) as part of the common reporting standard. CARF aims to reduce tax evasion using cryptocurrencies and blockchain technologies. Additionally, amendments to the common reporting standard include provisions for Central Bank Digital Currencies (CBDCs) and digital representations of fiat currency. The framework recognizes the impact of the crypto industry on tax revenue and establishes rules for collecting relevant tax information, enforcement, and information exchange among authorities. While enforcement may pose challenges, the move indicates regulators’ efforts to bring clarity to crypto taxation and promote tax transparency in the digital economy.
- The release of the long-awaited Hinman documents in the legal battle between Ripple and the SEC has caused a surge in the price of XRP. The documents, which contain internal communications within the SEC regarding a speech by former SEC Director William Hinman, suggest that Ethereum and Bitcoin are not considered securities. Ripple has used this as an argument that XRP should not be classified as a security either. With the release of the documents, the price of XRP jumped nearly 6% to over US$0.55. Ripple believes these documents will play a crucial role in its defense against the SEC’s lawsuit.
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