Markets were taken by surprise early in the week following the SEC's announcement on Monday that it is filing a lawsuit against Binance.US, the American subsidiary of the world's largest cryptocurrency exchange. The news continued on Tuesday with the SEC also targeting Coinbase, the second largest crypto exchange. Initially, fear gripped the markets, but crypto assets managed to recover some of the losses later in the week. The Nasdaq Crypto Index (NCI) closed the week with a 5.9% decline, while Bitcoin (BTC) saw a drop of 4.5% and Ether (ETH) declined by 7.6%. Due to several crypto assets being categorized as securities in both lawsuits, altcoins faced the brunt of the impact, with the CF DEFI Index experiencing a 18.0% drop and the CF Smart Contract Platforms Index declining by 21.8%.

 

 

SEC sues Binance and CEO Changpeng Zhao for US securities violations

 

The SEC has identified several products, including specific tokens, available on the US platform as securities. They raised concerns about the level of autonomy given to Binance International's US subsidiary, present evidence of mixing and diverting customer funds, and accuse them of internal wash trading and self-dealing intended to artificially boost trading volumes on Binance.US.

 

SEC’s Coinbase lawsuit heralds deepening US crypto crackdown

 

On Tuesday, the SEC announced another lawsuit, against Coinbase, alleging securities rules violations. While this lawsuit and the one against Binance are a clear sign of the ongoing regulatory aggression toward crypto in the US, it can also be argued, more optimistically, that the Binance lawsuit has the potential to bring clarity to a previously uncertain area of the market. Additionally, the Coinbase lawsuit may provide much-needed regulatory clarity that service providers and institutional investors have been eagerly seeking. However, crypto businesses in the US will continue to face uncertainty until a more comprehensive regulatory framework is approved by policymakers.

 

Bitcoin rallies as crypto market shrugs off SEC lawsuits 

 

After the SEC announced the lawsuit against Coinbase, crypto assets staged a partial recovery. Although the broader crypto market regained ground, BTC led the recovery after the SEC deemed multiple tokens unregistered securities in the lawsuits one analyst said.

 

SOL, ADA, MATIC tokens slide 20% in wake of SEC lawsuits 

 

The developers of Cardano (ADA) and Solana (SOL)—both named in the SEC suit against Coinbase and Binance as being unregistered securities—have pushed back against the SEC’s allegations with public statements rejecting the agency’s claims. Tokens mentioned in the SEC lawsuits fell in the wake of the announcements. 

 

Apple's new VR headset could bolster the future of the metaverse

 

Last week Apple launched its Apple Vision Pro VR/AR headset with potential to revolutionize the metaverse, making it more accessible and immersive. A CoinDesk article noted that its innovative features and user-friendly design could accelerate adoption and drive competition in the VR/AR industry, shaping the future of virtual experiences and content creation. While it remains uncertain whether the current pioneering projects will emerge as the dominant players in the metaverse and blockchain gaming market in the long run, it will be fascinating to observe the extent to which online immersive experiences gain perceived value once the Vision Pro begins to enter the market.

 

Schroders seeks a crypto custodian for digital-asset push

 

The move from Schroders, an asset manager with over $900 billion in AUM, is a sign of growing interest in cryptocurrencies and highlights the increasing demand for reliable and secure custodial services in the crypto industry.

 

For next week:

 

All eyes will be on the CPI to be released on Tuesday and PPI on Wednesday. Last week euro-zone inflation was shown to have eased significantly, down to 2.5% from 2.9%, which potentially bodes well for this week’s US CPI print.

 

 

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