CCTV highlights SEC’s legal move against Binance, Zodia Custody, and Blockdaemon join forces to cater to institutional clients, after Binance, SEC sues Coinbase, awaiting Crypto regulation; Not a swift transition in sight and more

In an unusual instance of cryptocurrency-focused reporting, China’s national television network, CCTV, covered news of a lawsuit against cryptocurrency exchange Binance, its co-founder and CEO Changpeng Zhao, and its U.S. counterpart, Binance.US, initiated by the United States Securities and Exchange Commission (SEC).
> The TV segment summarized the news, stating that the SEC has lodged a suit against the defendants for purported violations of U.S. securities regulations.
> The report noted that the revelation resulted in a drop in the prices of Bitcoin and Binance’s proprietary BNB token.
> The lawsuit filed by the SEC has generated substantial media buzz, given Binance’s reputation as the globe’s preeminent crypto exchange. Continue here.

Yesterday, the blockchain and cryptocurrency world was shaken by the news that Binance, a major player in the field, was being sued by the United States Securities and Exchange Commission (SEC) for purported violations of the nation’s securities laws.
> Interestingly, some key industry figures seemed to seize the opportunity to purchase during the market downturn.
> On-chain information provided by Lookonchain indicated that Cumberland, a firm specializing in cryptocurrency trading and market-making, transferred 67.9 million USDC out from Circle, the stablecoin’s issuer, and deposited 67.1 million USDC into the cryptocurrency exchange, Coinbase.
> This pattern suggests that the firm might be preparing for an active market engagement. More here.

In a report issued on Monday, Goldman Sachs presented a nuanced analysis of the on-chain metrics for Bitcoin (BTC) and Ethereum (ETH) for the month of May.
> The dynamics of Ether balances stayed mostly steady across various group cohorts.
> However, there was a noticeable 31% month-over-month decline in Bitcoin addresses holding more than 100,000 BTC, according to the report.
> The Spent Output Profit Ratio (SOPR) for Bitcoin, which provides insights into realized profits, experienced several peaks throughout the month.
> These spikes reached a high that was last seen in December 2020, leading Goldman Sachs to infer that “a significant amount of profit-taking has occurred in the spot markets.” Full report here.

In an announcement made on Monday, the U.S. Commodity Futures Trading Commission (CFTC) greenlit Cboe Clear Digital’s request to expand its clearing services.
> The regulatory body approved the addition of clearing services for digital asset futures on a margined basis. This new offering will serve futures commission merchants, complementing the fully collateralized futures and swaps that were previously sanctioned.
> Cboe Clear Digital operates under the auspices of Cboe Digital Exchange, which is recognized as a designated contract market by the CFTC.
> This authorization allows the company to broaden its futures contract clearing services for digital assets.
> The expanded services will remain within the confines of the conventional U.S. futures intermediated market structure, according to a separate statement from Christy Goldsmith Romero, a CFTC Commissioner. Continue here.

Zodia Custody, a leading firm in cryptocurrency asset management, announced plans to extend staking services to its institutional clientele, courtesy of a partnership with infrastructure solutions provider Blockdaemon.
> This move is designed to tap into the burgeoning institutional fascination with staking – the act of pledging digital assets to support the operations of a blockchain network, with rewards as a return incentive.
> Staking has come into prominence since Ethereum’s blockchain transitioned into a proof-of-stake model in September.
> The Shapella upgrade, implemented on April 12, led to a massive increase in the amount of staked ether (ETH) by 4.4 million, amounting to 22.58 million ($42 billion) by May 23. More here.

Coinbase, the renowned cryptocurrency exchange, finds itself at the heart of a regulatory storm as ten American states have initiated legal proceedings against it for allegedly violating securities regulations.
> The states, spearheaded by the Alabama Securities Commission, have served the digital currency exchange with a show cause notice, allotting a 28-day window to justify why it should not be slapped with a stop-order.
> The list of states that have joined forces to issue this legal notice includes Alabama, California, Illinois, Kentucky, Maryland, New Jersey, South Carolina, Vermont, Washington, and Wisconsin.
> In light of this, Coinbase is in peril of receiving a cease-and-desist order pertaining to the sale of unregistered securities. Details here.

Regulatory frameworks concerning digital assets in the U.S. are unlikely to be transformed overnight, even if new bills aimed at facilitating the transition of these assets from securities to commodities are approved by Congress.
> During a session with the House Agriculture Committee, Rostin Behnam, the Chair of the Commodity Futures Trading Commission (CFTC), emphasized that the development and implementation of such digital asset rules would be a time-consuming process.
> This holds true even if the commission received an increase in funding for crypto-specific resources.
> “With additional funding, it would take at least a couple of years to implement these rules,” Behnam stated, suggesting the timeframe could extend to “three to four years” without an increase in funding. Full report here.

The head of the Securities and Exchange Commission (SEC), Gary Gensler, has voiced his belief that the U.S. does not require additional digital currencies, amidst ongoing legal action against prominent crypto exchanges Binance and Coinbase for purportedly operating unauthorized securities exchanges.
> Gensler confronted the allegations of legal ambiguity in his approach to cryptocurrencies during a conversation with CNBC on Tuesday.
> He hinted at resemblances between the SEC’s action against Binance’s CEO Changpeng “CZ” Zhao and the pending legal case against Sam Bankman-Fried, the founder of FTX.
> “There’s no need for more digital currency – the U.S. dollar is already a digital currency,” Gensler remarked. Continue here.

Coinbase CEO Brian Armstrong is holding firm amidst the ongoing legal battle with the U.S. Securities and Exchange Commission (SEC), expressing his determination to ‘get the job done’ in the face of the lawsuit.
> Armstrong responded to the SEC complaint filed against Coinbase, asserting that his company is ready to go to court to gain clarity on the current regulations around cryptocurrencies.
> Armstrong pointed out that the SEC previously reviewed Coinbase’s business and approved its public listing in 2021.
> He also mentioned Coinbase’s multiple attempts to ‘come in and register’, stating that due to the lack of a clear path to do so, Coinbase refrains from listing securities, rejecting the majority of the assets it reviews. More here.

Bitcoin was trading up nearly 6% on Tuesday evening Eastern Time after reacting sharply to the SEC’s notice to crypto exchange Coinbase. The world’s largest cryptocurrency was trading at $27,100 levels, after making a low of $25,460 levels earlier in the day.
Ether was trading up about 5% at $1890 levels, after making a low of $1,801 earlier in the day.
Other major cryptocurrencies like Binance Coin, Ripple, Dogecoin, and Solana also rebounded strongly, amid Coinbase’s resolve to win the fight against the SEC in Court. They were trading up 3%, 5%, 6.5%, and 3.3% respectively.