SEC Sues Coinbase and Binance, Tether Invests In Volcano Energy
Market Update
- Crypto is rebounding despite the SEC announcing it would be suing top exchanges Binance and Coinbase. The Binance allegations shocked the cryptocurrency markets, leading to a rapid 5% drop in bitcoin prices yesterday. As a result, approximately $300 million worth of long crypto positions were liquidated, setting a new daily record for 2023. In addition to the legal action against Binance, the SEC filed a lawsuit against Coinbase this morning, less than 24 hours after the Binance suit. However, despite the cases, cryptocurrency prices are turning higher, potentially due to the elimination of leverage that occurred during the previous day. $BTC and $ETH have risen 3.6%, perhaps showing the market’s skepticism that the SEC’s actions will result in substantial obstacles to industry growth and optimism that the court cases could bring clarity to digital asset regulation in the U. S.
- The SEC has taken legal action against top crypto exchanges Binance and Coinbase, alleging they made several securities laws violations in supporting crypto assets that are potentially securities. They claim Coinbase failed to register as a clearing agency, broker, and exchange and alleges that its staking program violated securities laws. Following these developments, the shares of Coinbase ($COIN) have declined by approximately 13%. Coinbase has responded to the lawsuit stating it would "continue operations as usual" and fight the allegations, considering inconsistencies given the SEC approved Coinbase's direct listing to go public two years ago. The SEC also filed a lawsuit against Binance, its associated entities, and its founder Changpeng "CZ" Zhao, accusing them of various violations, including offering unregistered securities such as $BNB and BUSD, providing staking services without proper registration as a clearing agency, broker, and exchange, commingling customer funds, engaging in wash trading, and more. With the latest actions, the SEC has officially alleged 61 digital assets are potentially securities, implicating over $100 billion worth of tokens at current market prices.
- El Salvador's Volcano Energy has secured $1 billion in commitments to build a 241 MW bitcoin mining site in the Metapán region. Among the investors is Tether, the issuer of the stablecoin USDT. The government of El Salvador will have a significant role in planning and execution and will receive 23% of the revenues. External investors will own 27% of the project, while the remaining 50% will be reinvested in expanding energy production and mining capabilities. It is unclear how this new solar and wind energy park will be connected to volcanic activity, although Volcano Energy sees it as a step towards a geothermal future. Tether's Chief Technology Officer, Paolo Ardoino, considers this initiative one of the most groundbreaking projects the stablecoin issuer has supported. Tether has been actively diversifying its strategic ecosystem through investments in various ventures, including bitcoin mining in Uruguay and increasing its bitcoin reserves. With limited opportunities in North America, mining companies and other investors are exploring prospects in regions like Latin America and the Middle East.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
$LTC looks to be readying for a large move following prices having reached the apex of its four-month triangle pattern since early February 2023. As shown below, prices have made a steady pattern of higher lows and lower highs over the last 18 weeks, with this week's pullback having found strong support near the ongoing uptrend line from last Fall. Given that this recent consolidation followed a rally from last June, it's expected that LTC should resolve this consolidation by an upside breakout in the weeks/months to come. Overall, prices found strong resistance early this year at a 23.6% Fibonacci retracement zone of the prior decline from 11/21 and this level also lined up with an area of two prior lows from Summer 2021 and January-February of 2022 which caused a stalling out of last year's rally. Bottom line, gains back to new monthly highs look likely, and a rally back over $97.60 would serve as confirmation that this upside follow-through has gotten underway. Upside targets lie at $123, then $158-$165, the latter which should prove meaningful if reached during 2023. Downside support lies at $83.50 and only a move under $75 would serve to postpone the coming rally.
Daily Important Metrics
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All metrics as of June 6, 2023 2:29 PM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $519B | $26,755 | ↑ 4.38% | ↑ 62% | |
 ETH | $226B | $1,877 | ↑ 3.76% | ↑ 57% | ↓ -4.89% |
 ADA | $12B | $0.3536 | ↑ 1.26% | ↑ 43% | ↓ -18% |
 DOGE | $9.9B | $0.0712 | ↑ 7.65% | ↑ 1.49% | ↓ -60% |
 SOL | $8.0B | $20.20 | ↑ 0.69% | ↑ 104% | ↑ 43% |
 MATIC | $7.6B | $0.8222 | ↓ -2.16% | ↑ 7.88% | ↓ -54% |
 DOT | $6.1B | $5.16 | ↑ 2.24% | ↑ 19% | ↓ -43% |
 LINK | $3.2B | $6.26 | ↑ 3.08% | ↑ 13% | ↓ -49% |
 NEAR | $1.4B | $1.52 | ↑ 2.17% | ↑ 19% | ↓ -42% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| GBTC | ↓ -41% | $14.18 | ↑ 3.65% | ↑ 71% | ↑ 9.54% |
| BITW | ↓ -57% | $10.27 | ↓ -0.99% | ↑ 91% | ↑ 30% |
| ETHE | ↓ -54% | $8.28 | ↑ 2.22% | ↑ 74% | ↑ 12% |
| BTCC | ↑ 0.21% | $4.91 | ↑ 4.03% | ↑ 62% | ↑ 0.54% |
News
MARKET DATA
BtcEthereum Binance net outflows hit $778M on Ethereum since SEC charges: Nansen The SEC lawsuit against Binance led to outflows of over $750 million on Ethereum in the past 24 hours, with outflows still exceeding inflows. The United States... |
CryptoSlate Decentralized exchange trading volume grows 88% following SEC lawsuits Trading volume on decentralized exchanges (DEX) jumped by 88% in the 24 hours after the news that the U.S. Securities and Exchange Commission (SEC) sued central... |
REGULATION
The Block Gary Gensler says ‘we don’t need more digital currency’ after Coinbase, Binance lawsuits The SEC'S Gary Gensler said “we don’t need more digital currency" after the agency announced lawsuits against both Binance and Coinbase. ... |
The Block Coinbase: SEC lawsuit is ‘hurting America’s economic competitiveness’ Coinbase claimed in a statement that the agency's approach is damaging America's ability to compete economically. The post Coinbase:... |
BtcEthereum The SEC strikes again: First Binance, now Coinbase Key takeaways The US SEC has sued crypto exchange Coinbase for acting as an unregistered broker. This latest development comes a few hours after the regulatory... |
FUNDRAISING AND M&A
Coin Telegraph Tether invests in El Salvador's $1B renewable energy project El Salvador’s plans to build a billion dollar renewable energy precinct has found a first round investor in stablecoin... |
NFTS
The Block Binance adds Bitcoin NFTs to its marketplace one day after SEC lawsuit Binance's NFT marketplace has added support for NFTs that exist on the Bitcoin blockchain using the Ordinals system. The post Binanc... |
Bitcoinist Rare Satoshis: The Rising Star In Crypto After BTC-20 And Meme Coins? Rare satoshis have the potential to become the next major frenzy in the world of cryptocurrency, following the recent hype surrounding BTC-20 ordinals inscripti... |
PRODUCT UPDATES AND PARTNERSHIPS
CoinDesk Swift and Chainlink Will Test Connecting Over a Dozen Financial Institutions to Blockchain Networks In a new set of experiments Swift will collaborate with major financial market institutions like Australia and New Zealand Banking Group Limited (ANZ), BNP Pari... |
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