Binance Alleges SEC Overreach, FTX Claims Surge

• U.S Equities are bouncing after a three-day losing streak, but both the S&P (-2.2%) and Nasdaq (-2.5%) are set to close down for the week. The 2-year and 10-year treasury have reversed 0.87% and 1.38% respectively, after reaching 15 year highs this week. To counter the higher for longer environment, concerns are rising around a likely U.S government shutdown, which could hurt consumers and the economy. While detrimental to economic activity, this could be seen as a positive in the current ‘bad news is good news’ market sentiment, since it may contribute to taming inflation. $BTC and $ETH gained 0.23% and 0.81% over the last day. $TON has continued to outperform among large caps, rising 18.6% this week, overtaking Tron to enter the top 10 and nearly on par with $SOL at a MC of ~$8bn. The Telegram team has officially endorsed TON network as its blockchain for Web3 infrastructure, creating an in-app wallet that allows merchants to accept crypto payments on its popular messaging app.
• Binance and its CEO, Changpeng Zhao, have jointly submitted a request to have the SEC lawsuit against them dismissed, alleging overreach by the regulatory body. They argue that the SEC misinterpreted securities laws and is retroactively attempting to extend its authority over the cryptocurrency industry. The petition highlights that the SEC failed to provide clear guidance for the crypto sector before initiating the lawsuit, and it questions the SEC's attempt to expand its jurisdiction globally. Binance and Zhao maintain that the SEC's claims are unjust, as they pertain to crypto asset sales dating back to July 2017, before the SEC issued any public guidance on digital assets. Binance.US, the American subsidiary, is also named as a defendant in the lawsuit. The SEC's legal action against Binance began in June, accusing the exchange of offering unregistered securities and operating unlawfully in the United States. The ongoing regulatory pressure has significantly impacted Binance.US, resulting in a dramatic drop in daily trading volumes and recent layoffs.
• FTX claims in the secondary market are actively trading at about 35% of their original value, with investors eyeing strong returns as the settlement progresses. Notably, over $250 million worth of FTX debts changed hands, including a $23 million claim sold to Hudson Bay Capital Management. This bullish sentiment is based on the belief that FTX's bankruptcy process will unlock additional value, although such processes can take years. The secondary market's demand has surged, starting the year at around 15%. Growth is attributed to progress in FTX's restructuring and ongoing court proceedings involving FTX's founder, Sam Bankman-Fried. Investors are also acquiring rights to FTX crypto accounts with assets stuck on the platform since November 2022, when withdrawals were halted. Crypto bankruptcies, like Mt. Gox, have a history of lengthy resolutions. Currently, around 72% of claimants haven't decided on their scheduled claims, with 10% agreeing and 18% disputing them. The deadline for claim disputes is September 29, 2023.

Source: CoinDesk, Claims Market