Five Things to Know in Crypto This Week: SEC Sends Cryptos South

Key Insights:

  • The Securities & Exchange Commission filed lawsuits against Binance US, Binance, and Binance CEO CZ.
  • Coinbase also entered the fray, with the SEC suing the US platform one day after the SEC sued Binance.
  • The SEC v Ripple Case became significant amidst the SEC onslaught.

SEC Filed Charges Against Binance US, Binance, and CZ

On Monday, the SEC sued Binance US, Binance, and Binance CEO Changpeng Zhao (“CZ”).

The SEC filed thirteen charges against Binance, CZ, and Binance US. Charges include the unregistered offer and sale of securities and the misrepresenting trading controls and oversight on the Binance.US platform.

SEC Chair Gary Gensler had this to say,

“Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.”

The SEC followed the Monday charges with a Court motion to freeze the assets of Binance US.

Binance US responded to the charges with haste. Initially, the US platform announced the delisting of around 100 trading pairs and the suspension of OTC trading before finally delisting ten trade pairs and suspending OTC trading.

However, Binance US took more evasive action on Friday, suspending fiat (USD) deposits and announcing the pausing of fiat (USD) withdrawals from as early as June 13.

Binance (BNB) is down 22.78% to $235.6 this week, with BNB sliding to a 2023 low of $230 on Saturday.

BNB tumbles on Binance US news.

BNBUSD 100623 Weekly Chart

SEC Adds Coinbase to Its Extended List of Court Filings

The Securities and Exchange Commission followed the Binance Court filing with charges against Coinbase (COIN).

On Tuesday, the SEC charged Coinbase for operating as an unregistered securities exchange, broker, and clearing agency. Additionally, the SEC charged Coinbase for the unregistered offering and selling of securities in connection with its staking-as-a-service program.

Coinbase CEO Brian Armstrong responded to the charges, saying,

“Regarding the SEC complaint against us today we’re proud to represent the industry in court to finally get some clarity around crypto rules.”

The Coinbase CEO added,

“Remember: 1) The SEC reviewed our business and allowed us to become a public company in 2021. 2) There is no path to ‘come in and register’ – we tried, repeatedly – so we don’t list securities. We reject the vast majority of assets we review. 3) The SEC and CFTC have made conflicting statements, and don’t even agree on what is a security and what is a commodity.”

Armstrong concluded,

“We’ll get the job done. In the meantime, let’s all keep moving forward and building as an industry. America will get this right in the end.”

US rating agency Moody’s entered the fray. On Thursday, Moody’s affirmed the Coinbase ratings but changed the outlook to negative form. In January, Moody’s downgraded the corporate family rating from Ba3 to B2 and guaranteed senior unsecured notes from Ba2 to B1.

The Coinbase CEO failed to calm investor nerves. Coinbase (COIN), listed on the NASDAQ, tumbled 17.5% to end the week at $53.28.

COIN sees deep red for the week.

COIN 100623 Weekly Chart

Robinhood Delists Cryptos as Regulatory Scrutiny Intensifies

Robinhood (HOOD) reacted to the increased regulatory scrutiny. On Friday, the trading platform announced the delisting of cardano (ADA), polygon (MATIC), and solana (SOL).

The markets responded favorably to the news, with HOOD falling by a modest 0.95% on Friday to end the session at $9.41. However, ADA, MATIC, and SOL suffered.

HOOD avoids sell-off.

HOOD 100623 Daily Chart

SEC v Ripple Outcome Becomes US Crypto Critical

It has been radio silence from the SEC v Ripple case, with no Court rulings since the Court denied the SEC motion to seal the Hinman speech-related documents in mid-May.

The lack of case-related news left investors looking forward to the imminent release (June 13) of the infamous William Hinman speech-related documents.

The unredacted versions of the SEC documents could materially influence the free reign and end the regulation-by-enforcement mantra impacting the US digital asset space.

In February, Ripple CEO Brad Garlinghouse had this to say about the Hinman speech-related documents,

“When those come to light, I think you will see more kind of like, how is it possible for the SEC to decide to bring a case against Ripple given what they were saying within their own walls.”

While optimism toward the SEC v Ripple case has provided support, investor reaction to the Binance US news sent XRP into negative territory on Saturday.

XRP is currently down 8.49% to $0.48943 for the week.

XRP in the red for the week.

XRPUSD 100623 Weekly Chart

Kraken Launches NFT Marketplace Amidst Market Turmoil

US crypto exchange Kraken announced the launch of Kraken NFT on Thursday. According to the press release, over 250 NFT collections are available on the Kraken marketplace built on the Polygon (MATIC) network.

Significantly, Kraken NFT does not charge gas fees for trading on the platform.

Kraken faced the SEC earlier this year. In response to SEC charges against the platform, Kraken ceased offering or selling securities via its crypto asset staking programs.

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