Crypto Scoop: Top Cryptocurrencies Prices Plunge Amid SEC Legal Actions

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June, 9 2023

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Crypto prices plunge amid SEC actions against Binance & Coinbase while Tether invests in green Bitcoin mining.

While top cryptocurrencies prices plunge amid SEC legal actions, Tether pursues green Bitcoin mining. In this edition of the crypto scoop, we review the following.

  • The SEC lawsuit against Coinbase and Binance
  • Jack Dorsey’s crypto Twitter feud
  • Tether’s green Bitcoin initiative

Top Cryptocurrencies Prices Plunge Amid SEC Legal Actions Against Coinbase And Binance

The price of the top cryptocurrency, Bitcoin, experienced a significant dip, dropping as low as $25,600 before bouncing back above $26,000. Ethereum held its ground at $1,800 while several cryptocurrencies dipped in red.  This price decline resulted from the U.S. Securities and Exchange Commission (SEC) filing lawsuits against popular cryptocurrency exchanges, Binance and Coinbase.

Coinbase faced a lawsuit from the SEC, while Binance and its CEO, Changpeng Zhao (CZ), were hit with 13 charges by the securities regulator. Among the charges listed against Binance was trading securities without the proper regulation. US SEC classified 12 crypto tokens as securities in the Binance lawsuit, including BNB, BUSD, SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI.

Changpeng Zhao, the CEO of Binance, responded to one of the allegations, vehemently denying the SEC's claim that one of his holding firms received $12 billion in U.S. customer funds. Zhao clarified that the figure was false and stated that Binance.US held approximately $2 billion in user funds.

The SEC lawsuits immediately impacted Binance, with on-chain data revealing a significant outflow of 11,380 BTC (equivalent to around $292.9 million) just one day after the lawsuit was filed.

Amidst the legal turmoil, an intriguing development occurred as a dormant Bitcoin whale suddenly came to life. The whale, which held Bitcoin for over ten years, transferred their entire stash of 1,432.93 BTC (approximately $37.8 million) to a new address called "bc1psv." 

While the crypto community tried to make sense of the whale transfer, Google trends indicate that Google searches related to cryptocurrencies have reached a 29-month low. Google Trends shows a gradual decline in retail investors' engagement with cryptocurrency over recent months.

Binance.US, in response to the SEC's actions, announced its transition to becoming an all-crypto exchange in the US. The exchange will temporarily suspend USD deposits and plans to de-list USD-based trading pairs. However, SEC has filed for the court’s approval to freeze cryptocurrency assets linked to Binance US, citing the necessity to protect customer assets.

The SEC's enforcement actions have faced backlash from lawmakers who argue that the regulator is overstepping its boundaries. One lawmaker accused SEC Chairman Gary Gensler of displaying "complete contempt for Congress" by cracking down on Coinbase while Congress is still in the process of developing a regulatory framework.

Cardano’s parent company Input Output Global (IOG), also contested the SEC's classification of ADA as security, claiming that there were factual inaccuracies in the filings. IOG called for sensible regulation that aligned with the nature of blockchain and emphasised that the ongoing lawsuits would not impact their operations.

Source: Twitter.com

Former CEO and Founder Of Twitter, Jack Dorsey, Sparks Crypto Controversy on Twitter

Amid the SEC's crackdown on Binance and Coinbase, a simple response on Twitter set off a wave of discussion. It all began when a Twitter user asked Jack Dorsey, the renowned tech entrepreneur if he believed Ether (ETH) was security, to which Dorsey replied with a straightforward "Yes."

Dorsey, a well-known supporter of Bitcoin, had previously expressed dissatisfaction with Ether. Given that Binance and Coinbase were facing lawsuits for offering unregistered securities, Dorsey promoted the need to develop Bitcoin on his social media accounts.

The conversation quickly caught the attention of Udi Wertheimer, a developer at Taproot Wizards and a firm believer in Bitcoin. In response to Dorsey's comment, Wertheimer tweeted, "ETH is not a security? Teach me, wizard." This prompted Wertheimer to share a five-year-old video featuring Gary Gensler, the United States Securities Exchange Commission Chair, stating that ETH had achieved sufficient decentralisation and was no longer considered a security.

Gabor Gurbacs, a strategy adviser to stablecoin issuer Tether and investment management firm VanEck, chimed in with his perspective. Gurbacs suggested that Ethereum's recent transition to a proof-of-stake consensus mechanism might have rekindled the debate around securities laws.

Tether Invests In El Salvador’s Volcano Energy Project

Tether, the leading stablecoin issuer, is making significant strides in green Bitcoin mining by expanding its investments. Tether’s latest venture involves backing El Salvador's remarkable project, Volcano Energy, which aims to establish a renewable energy-powered Bitcoin mining empire.

Tether recently announced its intention to build an environmentally sustainable Bitcoin mining facility in Uruguay and has again taken a significant stride in green Bitcoin mining. 

The substantial funds secured by Volcano Energy will be channelled into developing a 241-megawatt renewable energy mining facility in Metapán. The data centre will drive the company's mining operations by leveraging the power of photovoltaic solar and wind energy. 

Paolo Ardoino, Tether's Chief Technical Officer, expressed his excitement for this groundbreaking initiative, emphasising its strategic importance. He stated, "Volcano Energy represents one of the most ground-breaking and strategic initiatives we are investing in, and we look forward to working alongside Josue Lopez and his team to make El Salvador a global force in renewable energy production."