Binance Unravels as Executives Flee and Layoffs Proliferate (WSJ)
Binance is in retreat, as the pressure from federal investigations builds. The firm’s general counsel, chief strategy officer, head of investigations and a senior vice president for compliance, among others, departed in recent weeks, a sign of the turmoil rattling the largest crypto exchange. In addition, Binance laid off dozens of staffers last week. Some employees weren’t given a reason while others were told they had been made redundant. The exchange has a plan to cut U.S.-based personnel. Binance founder Changpeng Zhao dismissed the idea that the resignations are a sign of internal tumult.
FTX Lawyer Who Made Problems Disappear Is Caught Up in Crypto Firm’s Fallout (Bloomberg)
He was the ultimate crypto cleaner – a lawyer, fixer and more for Sam Bankman-Fried and his FTX business empire. Daniel Friedberg, FTX’s former chief regulatory officer, now is being pulled even deeper into the intrigue surrounding his former boss Bankman-Fried, who’s hurtling toward one of the biggest white-collar criminal trials in US history. In a lawsuit filed last week, the new management of FTX accused Friedberg of enabling Bankman-Fried’s alleged crimes, and helping to orchestrate a 'wide-ranging con game' to raid billions of customer dollars.
Taylor Swift Agreed to FTX Partnership, but the Crypto Exchange Bailed (CNBC)
Taylor Swift signed and agreed to a sponsorship deal with bankrupt crypto exchange FTX after months of discussion before executives at FTX decided not to go through with the deal, a person familiar with the matter told CNBC. The nature of the agreement, previously reported by The New York Times on Thursday, contradicts public messaging about the nature of the failed FTX-Swift deal. Public statements by a class-action attorney lauded Swift’s due diligence efforts and said that the artist asked the exchange to explain why its listed assets were not considered unregistered securities.
Multichain Bridges Experience Unannounced Outflows of Over $130M in Crypto (CoinDesk)
Cross-chain router protocol Multichain has been exploited for nearly $130 million after an attacker siphoned capital out of numerous token bridges. "The lockup assets on the Multichain MPC address have been moved to an unknown address abnormally," Multichain wrote on Twitter. "The team is not sure what happened and is currently investigating. It is recommended that all users suspend the use of Multichain services and revoke all contract approvals related to Multichain."
Circle Quietly Launches Wallet-As-A-Service Developer Platform (The Block)
Circle, the issuer of the USDC stablecoin USDC, launched a wallet-as-a-service platform for developers. The service allows developers to embed web3 wallets in their apps, while offering a user-friendly design. The wallets can be used with any blockchain to give users easier access to NFTs, cryptocurrencies and other web3 digital assets. "If you are on the more technical side, you can self-serve into the platform and launch apps starting now," Circle CEO Jeremy Allaire said on Twitter.
Binance.US Crypto Market Share Dives (WSJ)
Cryptocurrency traders have rushed out of Binance’s American exchange following a regulatory crackdown, dropping the market share of Binance.US to a little more than 1% last week from a record high of 27% in April, according to data provider Kaiko. The decline started in late April and accelerated after the Securities and Exchange Commission sued Binance, Binance.US and founder Changpeng Zhao on June 5, accusing them of violating U.S. securities laws. On June 8, Binance.US announced that it would cease U.S. dollar trading on its platform, encouraging investors to withdraw their funds. Binance.US struggled to maintain banking access after the failure of Signature Bank.
CFTC Investigators Conclude Crypto Lender Celsius, Ex-CEO Broke Rules (Bloomberg)
Investigators at the Commodity Futures Trading Commission have concluded that bankrupt crypto lender Celsius Network and its former chief executive officer broke US rules before the firm’s implosion, according to people familiar with the matter. If a majority of the CFTC’s commissioners agree with that conclusion, the agency could file a case in federal court as soon as this month, said the people, who asked not to be identified discussing the confidential determination. Attorneys in the enforcement unit determined that Celsius misled investors and should have registered with the regulator, and that former CEO Alex Mashinsky also broke regulations, said one of the people.
BlackRock CEO Larry Fink Sees Bitcoin as ‘Digitizing Gold' (The Block)
BlackRock CEO Larry Fink said Wednesday that he wanted to work with regulators and hear any concerns they may have about a recent filing from the asset manager for a spot bitcoin ETF. He also said he viewed the largest cryptocurrency by market capitalization as having the role of "digitizing gold." "We have a good track record working with our regulators and trying to make sure we're thinking about all the issues around any filing," he said in an interview with Fox Business, adding that he couldn't get into specifics about the application. "We work really closely with our regulators, and we want to hear from the regulators."
Binance Seeks European Policy Officer Amid Setbacks in France, Netherlands (The Block)
Crypto behemoth Binance is seeking a new policy officer for its European operations, following a number of major setbacks on the continent. The new hire would "develop and write new policies, standards, guidelines, and procedures for the firm," a recent job advertisement notes. The past few weeks have been complicated for the exchange in the region, with media in France reporting that the company is under investigation by authorities in the country. Binance confirmed that authorities visited its offices in June.
Circle Considers Issuing Stablecoin in Japan Under New Rules (CoinDesk)
Circle is considering issuing a stablecoin in Japan, given that legislation governing stablecoins took effect on June 1, the payment services company's co-founder and CEO Jeremy Allaire said. In an interview with CoinDesk Japan, Allaire said that if stablecoins become more widely used for cross-border trade, foreign currency transactions and global commerce, Japan will become an extremely large market. Japan's stablecoin bill makes it one of the first countries to establish a framework for the use of overseas stablecoins, which Allaire considers “the most important thing the government and the Financial Services Agency have done.”
Regulatory Ambiguity Hurts Americans, Says SEC Commissioner Hester Peirce (The Block)
U.S. Securities and Exchange Commissioner Hester Peirce thinks that regulatory ambiguity is harming American investors, according to a wide-ranging interview with Coinage Media. Speaking to Coinage founder and former Yahoo Finance reporter Zack Guzman, the Republican commissioner weighed in on the ongoing race to launch a spot bitcoin exchange-traded fund, noting that standards applied to such a product have been "a moving target" and "not consistent with how we've treated other products."
Gemini’s Winklevoss Demands $1.47 Billion Payment From DCG in ‘Final Offer’ (The Block)
Cameron Winklevoss, co-founder of crypto exchange Gemini, issued a “final offer” to Barry Silbert, founder of Digital Currency Group (DCG), to repay a total debt of $1.46 billion or risk a lawsuit. In an open letter published Monday on Twitter, Winklevoss said that the “games are over” — with Gemini Earn users still stuck in limbo with over $1.2 billion of assets stuck in Genesis Global, which DCG owns. Winklevoss demanded DCG make payments totaling $1.465 billion, including the US$630 million payment that was due in May. As part of the offer, a payment of $275 million should be made by July 21.
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner (CoinDesk)
The Nasdaq exchange has refiled its application to list BlackRock's proposed bitcoin exchange-traded fund, joining rivals in naming the U.S. exchange Coinbase as the market that will be monitored in a so-called surveillance-sharing agreement. The refiling follows feedback reportedly given to applicants for spot bitcoin ETFs by U.S. securities regulators that filings were "inadequate" without the name of the partner in the surveillance-sharing agreements, which are supposed to help guard against market manipulation.
Singapore's MAS Orders Crypto Firms to Keep Customer Assets in a Trust by Year-End (CoinDesk)
Crypto service providers in Singapore would need to deposit customer assets under a statutory trust before the end of the year for safekeeping, the Monetary Authority of Singapore (MAS) announced on Monday. The requirement comes after the MAS received public consultation around enhancing customer protection initiated in October 2022. "This will mitigate the risk of loss or misuse of customers’ assets, and facilitate the recovery of customers’ assets in the event of a DPT (Digital Payment Token or Cryptocurrency) service provider’s insolvency," the MAS said.
Hong Kong Urged to Issue Stablecoin to Compete With Tether and USDC (The Block)
A new policy proposal encourages the Hong Kong government to issue its own stablecoin, HKDG, backed by its foreign exchange reserves — in order to compete with existing stablecoins such as USDT and USDC. The paper is co-authored by Wang Yang — Vice Chancellor of the Hong Kong University of Science and Technology and Chief Scientific Advisor of the Hong Kong web3 Association — angel investor Cai Wensheng, BlockCity founder Lei Zhibin and Ph.D. student Wen Yizhou. Wu Blockchain first reported the news.
Bitcoin, Ether Supply on Exchanges Fell in June: Goldman Sachs (CoinDesk)
The supply of bitcoin (BTC) and ether (ETH) on exchanges fell in June as ramped-up regulation and crime persuaded holders to prefer self custody, Goldman Sachs (GS) said in a report Tuesday, citing on-chain data. Supply of bitcoin, the largest cryptocurrency by market cap, dropped 4%, nearing the level of December 2022, itself the lowest since November 2020 – and right before the start of the 2021 bull market, the report said. Ether supply slid 5.8% to levels not seen since May 2018. This trend is underpinned by a number of factors, the bank said.
SEC Says Spot Bitcoin ETF Filings Are Inadequate (WSJ)
The Securities and Exchange Commission said a recent wave of applications filed by asset managers to launch spot bitcoin exchange-traded funds are inadequate, according to people familiar with the matter. The agency informed exchanges Nasdaq and Cboe Global Markets, which filed the applications on behalf of asset managers including BlackRock and Fidelity Investments, that they aren’t sufficiently clear and comprehensive, the people said. The exchanges or asset managers can update them to address the regulator’s feedback and refile. Cboe updated and refiled its applications Friday afternoon to address the regulator’s feedback.
Kraken Ordered to Turn Over Its Users’ Information to the IRS (Bloomberg)
Cryptocurrency exchange Kraken was ordered by a judge to provide a wide swath of information about its users to the Internal Revenue Service for the agency’s investigation of underreported tax liability. The IRS has said it wants information on Kraken accounts that did at least $20,000 of cryptocurrency trading in any single year, from 2016 to 2020. Kraken had called the agency’s summons an 'unjustified treasure hunt,' arguing it went well beyond the boundaries set in a similar fight with Coinbase about six years ago.
CME’s Ether Options Market Sees Open Interest Hit All-Time High (The Block)
Open interest in CME Group's ether options is at an all-time high, according to data compiled by The Block. CME Group's ether options market's open interest clocked in at $254 million in July. Open interest refers to the number of contracts outstanding. Open interest for bitcoin options is nearly at all-time highs on CME, with OI sitting at $1.59 billion, according to The Block's data dashboard. In April, OI for options tied to the largest cryptocurrency hit $1.69 billion.
Poly Network Attacker Issues 'Worthless' Billions in SHIB, BNB, BUSD in Latest Crypto Hack (CoinDesk)
Attackers issued billions worth of several tokens on Sunday morning after exploiting a smart contract function in cross-chain protocol PolyNetwork’s bridge tool. Bridges allow users to swap tokens between different blockchains using a smart contract by locking value on one network, and releasing it on another. PolyNetwork attackers were likely able to manipulate the way the bridge works and trick it into issuing tokens on one network which, in reality, did not exist.
South Korea Passes Inaugural Standalone Crypto Bill After Spate of Scandals (Bloomberg)
South Korea approved its first standalone digital-asset bill to boost investor protection just over a year after the implosion of tokens created by countryman Do Kwon exacerbated a $2 trillion crypto-market rout. Parliament on Friday passed the Virtual Asset User Protection legislation, which integrates 19 crypto-related bills, after a prolonged delay. The code defines digital assets and imposes penalties for transgressions such as the use of nonpublic information, market manipulation and unfair trading practices.