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Cryptocurrency roundup for June 13: Andreessen Horowitz’s first International office in London, Hong Kong Legislator woos crypto exchanges, Binance’s liquidity plunge after SEC lawsuit and more
Big StoryAndreessen Horowitz Set to Establish a Foothold in London, Commending UK’s Progressive Stance on Crypto
Andreessen Horowitz, a leading venture capital firm, has announced that it will open its first international office in London.
> The new office will be led by General Partner Sriram Krishnan, who will work with a team to grow the crypto and startup ecosystem in the UK and Europe.
> In a statement, Chris Dixon, founder and managing partner of Andreessen Horowitz, said that the UK is “on the right path to becoming a leader in crypto regulation.”
> He also praised the UK’s deep pools of talent, world-leading academic institutions, and strong entrepreneurial culture.
> “We believe that the UK has the potential to become the world’s Web3 center,” Dixon said. Continue here.
SECSEC Lawsuits Against Binance and Coinbase: JPMorgan Calls for Clear Crypto Regulations
In a research report released on Thursday, JPMorgan underscored the significance of recent lawsuits filed by the U.S. Securities and Exchange Commission (SEC) against Binance and Coinbase.
> JPMorgan stressed that these lawsuits highlight the pressing need for U.S. legislators to develop “a comprehensive framework on how to regulate the crypto industries and the relative responsibilities of SEC vs the Commodity Futures Trading Commission (CFTC).”
> According to the report, the SEC believes that the majority of cryptocurrencies should be categorized as securities.
> Consequently, this would mean that most cryptocurrency companies and trading activities should be subject to SEC oversight and comply with the regulatory measures applicable to traditional securities. More here.
Curve FinanceCurve Finance Founder’s Masterstroke: Securing Aave Loan with 32% of CRV Circulating Supply
During the past weekend, an intriguing move was made by a wallet believed to be owned by Michael Egorov, the creator of Curve Finance.
> The wallet deposited an eye-popping 38 million Curve DAO tokens, valued at around $24 million, into Aave, a decentralized lending platform.
> On-chain analyst Lookonchain pointed out that this strategic move was executed by Egorov to bolster his collateral, thus diminishing the likelihood of liquidation.
> The scale of the collateral is staggering, as Egorov backed his loan on Aave with a whopping 277 million CRV tokens. This stash represents 32% of CRV’s total circulating supply.
> Data from DeBank reveals that Egorov took out a hefty loan from Aave that exceeded $64 million in stablecoins. Read here.
Hong Kong’s Crypto EmbraceInviting Coinbase and Building a Digital Currency Ecosystem
Promoting its forward-thinking position on digital currencies, a member of the Hong Kong Legislative Council has extended an open invitation to Coinbase and other cryptocurrency exchanges to set up shop in the territory.
> Johnny Ng, a member of the Legislative Council, used Twitter as his platform to offer support and help to “all global virtual asset trading operators,” including Coinbase and dropped hints about possible opportunities for stock listings.
> This outreach by Ng follows the US Securities and Exchange Commission’s recent legal actions against major industry players such as Binance and Coinbase.
> While many Western nations have been somewhat reserved in their approach to cryptocurrencies, Hong Kong has opted for a more active strategy.
Binance.US Liquidity CrisisSEC Lawsuit Triggers Massive Drop in Market Depth
In the wake of the U.S. Securities and Exchange Commission’s (SEC) lawsuit, Binance.US is experiencing a severe liquidity crunch, as per a research report by Kaiko.
> Market makers and traders have vacated the cryptocurrency exchange at an alarming rate.
> The report reveals that the liquidity on Binance.US gauged through the aggregated market depth for 17 tokens, plunged nearly 80% in just one week.
> On June 4th, a day before the SEC lawsuit was filed, the market depth of Binance.US stood at a robust $34 million.
> However, the latest data reveals that the figure has nose-dived to a meager $7 million.
> While Binance.US has borne the brunt, Coinbase, and Binance Global too have not remained unscathed.
Bank of ChinaBank of China’s BOCI Makes Waves with $28 Million Tokenized Securities on Ethereum Blockchain
BOCI, the investment banking subsidiary of Bank of China, has broken new ground by launching tokenized structured notes worth 200 million offshore renminbi (equivalent to $28 million) on the Ethereum blockchain.
> This groundbreaking move marks BOCI as the pioneer among Chinese financial entities to issue a tokenized security in Hong Kong using blockchain technology.
> UBS, which collaborated with BOCI for this venture, said, “This transaction marks the first product of its kind in the Asia Pacific constituted under Hong Kong and Swiss law and tokenized on the main Ethereum blockchain, successfully introducing regulated securities onto a public blockchain.”
> This comes on the heels of UBS’s issuance of a $50 million tokenized fixed rate note in December, which was based on a permissioned blockchain and governed by English and Swiss law. More here.
Galaxy DigitalGalaxy Digital Dodges Legal Bullet: Court Dismisses BitGo Lawsuit Over Failed $1.2 Billion Acquisition
Galaxy Digital Holdings, led by Mike Novogratz, has triumphed in a legal battle against BitGo over the latter’s $1.2 billion acquisition deal that never materialized.
> As stated in a document from the Delaware Chancery Court dated last Friday, Galaxy possessed an unblemished right to call off its acquisition of BitGo due to the latter’s failure to provide the necessary audited financial statements for 2021 as stipulated in the merger agreement.
> Galaxy Digital Holdings had initially publicized its intentions to acquire BitGo in 2021, during a favorable market condition for digital assets.
> Valued at $1.2 billion, the acquisition, which was supposed to be a mix of cash and stock, was one of the largest in the cryptocurrency sector at that time.
US Representative Warren Davidson Introduces Bill to Overhaul SEC and Oust Chairman Gensler[/title]
US Representative Warren Davidson has taken a significant step by introducing a legislative bill aimed at overhauling the US Securities and Exchange Commission (SEC) and ousting its Chairman, Gary Gensler.
> In a recent tweet, Davidson referred to Gensler as a “tyrannical chairman,” asserting that there is a need to shield the markets from him.
> This move comes on the heels of the SEC’s latest enforcement actions. Just last week, the regulatory body imposed a slew of charges against two major cryptocurrency exchanges, Coinbase and Binance, attributing these actions to breaches of US securities laws.
> The SEC sent tremors through the digital asset domain last week by targeting Coinbase and Binance, two of the most renowned cryptocurrency exchanges, on grounds of securities transgressions. More here.
[quote]Market StoryBitcoin and Ethereum Dip as Investors Eye U.S. Economic Data: A Week Ahead Analysis
> At the outset of the week, Bitcoin and Ethereum experienced a slump, with the former dipping by 0.6% and the latter by 1%, according to data from TradingView.
> Specifically, Bitcoin’s value dwindled to $25,785, while Ethereum fell to $1,735.
> The cryptocurrency market has lately been responsive to events specific to the sector, notably the SEC’s legal actions against Binance and Coinbase.
> However, this week the focus might shift to the broader economic landscape.
> Here’s what to keep an eye on:
Tuesday is set for the unveiling of the U.S. Consumer Price Index (CPI) for May. Observers are keen on seeing if there will be a deceleration in the yearly headline inflation from April’s 5.5%, and a slowdown in the core rate from 4.9%.
> One of the week’s highlights will be Wednesday’s disclosure of the Federal Open Market Committee’s (FOMC) outcomes from their June meeting at 2 p.m. (ET). Currently, market players are anticipating approximately a 75% likelihood that the Fed will halt its remarkable series of rate hikes which began in March 2022, elevating the benchmark fed funds rate from a band of 0.00-0.25% to a current 5.0-5.25%. The Fed Chair, Jerome Powell, will conduct a press conference following the disclosure of the meeting’s results.
> In addition to the FOMC meeting results, Wednesday will also mark the publication of the Producer Price Index (PPI) for May. Although not as monitored as the CPI, the headline PPI saw a decline to 2.3% in April, while the core rate dropped to 3.4%.
> Come Thursday, the initial unemployment claims for the week ending June 10 will be made public. This figure has been showing an upward trend in recent times and surged dramatically by 28,000 last week, hitting an approximate 18-month peak of 261,000. This indicates potential frailty in the labor market despite contrary indications from monthly nonfarm payroll reports.
> Additionally, the European Central Bank (ECB) will divulge its most recent decision regarding rate hikes on Thursday. Since July of the previous year, the ECB has been aggressively raising rates as countries also aim to curb soaring inflation.