The week’s crypto market cap was untouched by additional US lawsuits

Once more, welcome to Chain Reaction.

If you believed that last week’s events involving the U.S. You should prepare yourself for this week’s news because the Securities and Exchange Commission is cracking down on key cryptocurrency companies like Coinbase and Tron.

The U.S. is suing Binance, the largest cryptocurrency exchange by volume in the world, as well as its CEO Changpeng Zhao and Chief Compliance Officer Samuel Lim. According to a filing made on Monday, the Commodities Futures and Trading Commission (CFTC).

A lawsuit has been filed against the business, Zhao, and Lim for allegedly breaching trading and derivatives laws.

The CFTC complaint claims that the exchange “disregarded federal regulations” for U.S. financial markets, including laws that impose measures to prevent and identify money laundering and terrorism funding, among other things, and that the exchange never registered with it in any capacity.

The exchange, which debuted in June 2017 and has maintained the top spot ever since, grew to be the biggest cryptocurrency exchange in the world in just 180 days. According to a company spokeswoman, Binance has spent $80 million on external partners including as KYC vendors, transaction monitoring, market surveillance, and investigative tools to support its compliance operations.

The statement continued, “This filing is unexpected and upsetting given we have been cooperating with the CFTC for more than two years.” “But, we aim to keep working with regulators in the US and other countries. The best course of action is to safeguard our users while working with regulators to create an effective regulatory framework.

That position is probably not shared by the CFTC, which claimed in its filing that Zhao and other top management members of Binance “failed to properly supervise Binance’s activities” and that their actions “actively aided violations of U.S. law.”

Zhao posted “4” in response to the CFTC pronouncement, which alludes to a tweet he made in January telling people to “avoid FUD, fake news, attacks, etc.” FUD is an acronym for fear, uncertainty, and doubt and typically refers to situations when a business thinks they are being disadvantageed.

This action comes at a time when the crypto industry, particularly major companies, is dealing with a lot of U.S. regulatory action, which some perceive as fair or innovation-stifling while others see as necessary for clarity. Long-term results will determine whether this measure has a favorable effect on the crypto environment in the United States.

But despite several regulatory enforcements, the market for cryptocurrencies appears unchanged. According to data from CoinMarketCap, the overall crypto market valuation slightly climbed over the course of the week, rising from $1.15 trillion to $1.18 trillion. At the time of writing, ether and bitcoin had each increased by around 3% and 4% during the previous 24 hours, respectively.

Web3 this week

According to the Binance CFTC lawsuit (TC+), “regulators will keep regulating and regulate more.”

Investigated what the CFTC’s case against Binance means for the larger crypto market, and the implications might be significant. Yankun Guo, a partner at the Chicago-based legal firm Ice Miller, stated to that “Crypto is under attack.” The final effect on Binance could shock the entire global digital asset market, another market participant warned. “The past six months have seen a wave of complaints and enforcement actions against blue-chip names including Coinbase, Kraken, and KuCoin, and it was only a matter of time until Binance had their turn.”

Sam Bankman-Fried, a former CEO of FTX, is accused of bribing Chinese officials.

This week, the (former) executive of another cryptocurrency exchange made headlines for several reasons. Sam Bankman-Fried, the former CEO of FTX, was charged with a superseding indictment by American authorities that alleged official corruption in China. American court documents state that. Bankman-Fried was found guilty of “authorizing and directing a bribe of at least $40 million to one or more Chinese government officials” in the Southern District of New York District Court “in or about 2021.”

Do cryptocurrencies count as securities or commodities? Which US agency you ask will depend on (TC+)

Being a crypto company at this time can be challenging. The current state of the markets and trading activity is unstable, but the largest issue for cryptocurrency companies appears to be the lack of clarity surrounding the rules they are expected to be in compliance with. In its most recent case against Binance, the CFTC claimed that some cryptocurrencies were commodities. This differs with the Securities and Exchange Commission (SEC), a significant U.S. government organization, which sees most cryptoassets (apart from Bitcoin) as securities.

US, South Korea both seek Do Kwon’s extradition to face charges

Do Kwon, the founder of Terraform Labs, which managed the TerraUSD stablecoin and its sibling token LUNA, was detained in Montenegro last week as he attempted to board a flight to Dubai using forged documents. Terraform Labs ran the TerraUSD stablecoin and its sister token LUNA. Next, what? Given that Kwon is currently being prosecuted in both his nation of origin, South Korea, and the United States, we are unsure of where he will be transported. And it appears that Kwon’s extradition is being sought by both nations.

Under governmental scrutiny, Coinbase executives comment on the future of cryptocurrencies in the US (TC+)

A Wells notification was sent to Coinbase by the US. Last week, leaders from the business and the Securities and Exchange Commission spoke on Twitter Spaces about the judgment and what Coinbase will do next to create legal frameworks for the cryptocurrency industry. CEO Brian Armstrong remarked during the conversation that “regulators should come up with the rules, inform everybody the regulations, and we implement them.” “We would like to gain more clarity on the current legislation because they are not clear.”

most recent pod
Jacquelyn spoke with Emin Gün Sirer, the founder and CEO of Ava Labs, for the episode from the previous week.

According to Crunchbase, Ava Labs has raised a total of roughly $640 million and is supported by companies like a16z and Polychain Capital. Ava Labs announced several collaborations with well-known brands and businesses in recent months, including Amazon Web Services, which.

The layer-1 blockchain Avalanche, developed by Ava Labs, is a platform that enables programmers to create multipurpose blockchains and decentralized applications with an emphasis on efficiency and low transaction costs.

We discussed Gün Sirer’s origins, the reasons behind his 2020 launch of the layer-1 blockchain Avalanche, if there are too many L1s in the market, and how blockchains might scale more effectively.

We also talked about:

How layer-2 vision malfunctions
US regulatory action against cryptocurrency
Growth of Ava Laboratories in Asian markets
Partnerships and commercial growth for the blockchain
The focus of Ava Labs in 2023 and beyond
To stay up to date on the most recent episodes, subscribe to Chain Reaction on Apple Podcasts, Spotify, or your other podcasting service. If you enjoy the show, kindly leave us a review!

Observe the money
firm for crypto wallets Ledger raises $108 million more.
HTTP Protocol 3 To advance international trade, Polytrade raises $3.8 million.

Fetch.ai, a blockchain firm, acquires $40 million to offer monetization and other tooling for information created by AI.
Aptos-based protocol To create decentralized order books, Econia Labs raises $6.5 million.
A $50 million Series A investment sponsored by Blockchain Capital is closed by Eigen Laboratories.