Court Partially Dismisses SEC's Lawsuit Against Coinbase, Kucoin Charged by DOJ and CFTC for AML Violations
Market Update
- Crypto markets are declining following news that most of the SEC’s lawsuit against Coinbase will proceed (more below). $BTC (-1.27%) reached intraday highs of $71.8k before declining to $69k after the news. Rumors have circulated that Morgan Stanley and PNC will soon approve access to Bitcoin ETFs on their wealth management platforms. Together, Morgan Stanley and PNC hold over $1.5 trillion in client assets and likely will provide a tailwind for ETF flows. Inflows yesterday totaled $418 million, helping to offset last week’s record outflows. $ETH (-1.78%) is trading near $3,500, as Fidelity filed an S-1 for its Ether Spot ETF this morning, posing interesting timing given the recent pessimism surrounding potential approvals. Fetch.AI ($FET), SingularityNET ($AGIX), and Ocean Protocol ($OCEAN) have agreed to merge into an “Artificial Superintelligence Alliance” to create one token (ASI) encompassing all three protocols with an FDV of $7.5 billion, pending governance approval. All three respective tokens have surged over 10% following the proposed merger.
- The SEC brought a lawsuit against Coinbase last summer, alleging the platform was operating an unregistered exchange, broker, and clearinghouse under federal securities laws, and through its staking platform, Coinbase was engaging in the unregistered offering and sale of securities. The lawsuit additionally made claims that through Coinbase’s Wallet product, it was acting as an unregistered broker. Coinbase had filed a motion to dismiss the case, but Judge Katherine Polk Failla ruled against the dismissal, with the exception of the allegations pertaining to Coinbase Wallet. The dismissal was more of a long-shot motion from Coinbase, and now the case will proceed to the courts, where Coinbase will present its case similarly to how Ripple did (and won). Coinbase and the SEC will have until April 19th to agree on a case scheduling plan. Coinbase’s stock (COIN) fell following the headline and is currently down 2.51%.
- The U.S. Department of Justice (DOJ) has filed charges against crypto exchange Kucoin and two of its founders, Chun Gan and Ke Tang. The DOJ alleges that Kucoin has operated as an unlicensed money-transmitting business, violated the Bank Secrecy Act, and charged Gan and Tang with related conspiracy charges. Both charges against Gan and Tang carry a maximum sentence of five years in prison. The DOJ says that Kucoin has failed to implement reasonable anti-money laundering and know-your-customer (KYC) procedures. The indictment claims Kucoin has deliberately avoided U.S. AML and KYC regulations and that its platform has been used to launder over $9 billion. Kucoin released a statement telling customers that their assets are safe and that they are investigating the details. This has not stopped users from withdrawing assets as total exchange assets have dropped from $6 billion to $5.2 billion since yesterday, while Kucoin’s native token $KCS has dropped over 20%. In conjunction with the criminal charges, the CFTC has filed a civil action against Kucoin, seeking disgorgement, civil monetary penalties, and permanent trading and registration bans.
Daily Technical Strategy
Mark L. Newton, CMT
Head of Technical Strategy
Chainlink joins a growing list of cryptocurrencies that has begun to show more consolidation in the last month, with minor highs in February, a peak in early March and now a subsequent run-up. While some investors might be quick to judge this one-month pattern as a Head and Shoulders in the making, it's important to stick to the ongoing intermediate-term bullish uptrend barring further signs of technical deterioration. In this case, $LINK has strong support near $16.26. Until/unless this is broken, it's more probable that LINK pushes back higher to make new monthly highs, which could materialize into mid-April. Near-term movement over $21 would bring about a challenge of $22.87 and then targets near $24. Weakness, if/when that occurs, would find strong support near $18 and only a break of $16.26 would further consolidation be in store. At present, further upside looks likely in the weeks to come, and $LINK looks appealing given that this bottomed at an exact area of support last week.
Daily Important Metrics
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All metrics as of March 27, 2024 10:55 AM
All Funding rates are in bps
Crypto Prices
| Symbol | Market Cap | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
 BTC | $1.36T | $69,087 | ↓ -1.14% | ↑ 64% | |
 ETH | $422B | $3,515 | ↓ -1.40% | ↑ 54% | ↓ -9.10% |
 SOL | $81B | $183 | ↓ -3.09% | ↑ 79% | ↑ 16% |
 DOGE | $27B | $0.1882 | ↑ 6.41% | ↑ 111% | ↑ 48% |
 ADA | $23B | $0.6369 | ↓ -3.11% | ↑ 7.45% | ↓ -56% |
 DOT | $13B | $9.44 | ↓ -2.52% | ↑ 16% | ↓ -47% |
 LINK | $11B | $19.22 | ↓ -3.36% | ↑ 28% | ↓ -35% |
 MATIC | $10B | $1.03 | ↓ -0.79% | ↑ 6.90% | ↓ -57% |
 NEAR | $7.7B | $7.26 | ↓ -5.01% | ↑ 102% | ↑ 38% |
Exchange Traded Products (ETPs)
| Symbol | Premium to Nav | Last Price | Daily Change | Year to Date | Relative to BTC YTD |
| BITW | ↓ -32% | $35.61 | ↓ -1.41% | ↑ 53% | ↓ -11% |
| ETHE | ↓ -23% | $25.40 | ↓ -3.16% | ↑ 31% | ↓ -33% |
News
QUICK BITS
CryptoSlate Coinbase shares dip as court sides with SEC in ongoing legal battle Coinbase Chief Legal Officer Paul Grewal said the exchange had anticipated that the Court would allow the US Securities and Exchange Commission (SEC) case again... |
The Block KuCoin sees nearly $800 million in net outflow following DOJ indictment The crypto exchange saw a 24-hour net outflow of $780 million across multiple chains after the US DOJ lodged charges against it. |
FUNDRAISING AND M&A
The Block DePIN Layer 1 peaq raises $15 million in pre-launch funding The funding will be used to expand the peaq DePIN ecosystem ahead of a public offering and mainnet launch. |
Decrypt.co If approved, the new ASI token could rank among the 20 most capitalized cryptocurrencies in the ecosystem with a $7.5 billion fully-diluted valuation. |
The Block Square Enix backs $14 million seed round for web3 gaming firm Elixir Games Elixir Games will use the funds to develop its gaming ecosystem and launch the $ELIX token undergirding its gaming products. |
MINING
Bitcoin.com Marathon Digital Holdings Unveils ‘M’ Block Art on Bitcoin Blockchain Bitcoin miner Marathon Digital Holdings has crafted a block that prominently displays the letter “M” by carefully arranging transactions and fee rates within it... |
INVESTMENT PRODUCTS
The Block 21Shares launches Toncoin staking ETP on SIX Swiss Exchange 21Shares has launched the Toncoin staking ETP amid the token's notable surge this month following integration by Telegram. |
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