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SEC lawsuits against Binance and Coinbase unify the crypto industry

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Professionals across the crypto sector have responded to the United States Securities and Exchange Commission’s (SEC) recent actions against two of the biggest crypto exchanges, Binance and Coinbase. 

On June 5, the SEC filed a lawsuit against Binance for allegedly offering unregistered securities. Only a day after filing the Binance suit, the commission also went after Coinbase on similar grounds, alleging that popular cryptocurrencies offered by the exchange, such as Solana, Polygon and The Sandbox, qualify as securities. reached out to market players working in the space for their responses to the recent actions by the SEC. From sharing a belief that it will drive crypto companies away from the U.S. to simply calling the SEC’s actions lazy, industry players shared their thoughts on the latest developments.

An ‘unacceptable’ approach to regulation

According to Kristin Smith, the CEO of the Blockchain Association, while the SEC’s actions are expected, it’s still unacceptable. Smith explained that: 

“The SEC doesn’t make the law. Indeed, this approach to regulation is unacceptable, but it is what we have come to expect from the SEC and its anti-crypto stance.”

The executive highlighted that while the industry and the U.S. Congress are working to develop effective regulation, the SEC “continues to distract from substantive policy efforts.” The executive believes that by listing assets this way, the SEC is trying to circumvent formal rulemaking processes and deny public engagement.

Meanwhile, Paolo Ardoino, the chief technology officer of stablecoin issuer Tether, believes companies’ complaints against the SEC should be listened to. According to Ardoino, the uncertainty of rules and guidance in the U.S. is becoming a common theme, even among the country’s biggest crypto supporters. 

Turbos Finance CEO Ted Shao also echoed Smith’s sentiment. Shao says this is “not the direction Web3 developers want to see.” The executive believes the SEC showed that it’s against the whole Web3 space, as they are also coming after top projects, not just centralized exchanges. 

Driving crypto players abroad and weakening consumer confidence

In addition to the SEC’s actions being unacceptable, other professionals working in the space believe that the effects of this recent move include pushing crypto players to more crypto-friendly jurisdictions and weakening consumer confidence in crypto within the United States.

Insider Intelligence crypto analyst Will Paige said that the recent suits highlight the SEC’s intent to police the space through enforcement in the absence of a regulatory framework. According to Paige, this could potentially knock down the “already weak consumer confidence in cryptocurrencies” in the country. 

Ben Caselin, the chief strategy officer at crypto exchange MaskEX, believes that while this is a case against Binance, it may have implications for other players in the United States. The former AAX executive explained that this can “open up more opportunities for other jurisdictions, such as Hong Kong, Dubai or even El Salvador, to drive innovation and attract capital and talent.”

Oscar Franklin Tan, the chief legal officer of nonfungible token protocol Enjin, agrees with the sentiment. According to Tan, the world will not wait for the U.S. to make up its mind on crypto. Tan explained: 

“The SEC actions only drive talent and innovation out of the U.S. to countries with clearer rules that support responsible builders. Singapore, in 2020, stated it does not follow the U.S. Howey test. Japan has a clear self-regulatory framework for exchanges.”

The executive believes that “progressive countries” will reap the benefits, especially now that explosions in artificial intelligence and extended reality highlight the need for blockchain and genuine digital ownership.

Doubts cast on SEC’s fairness and motivations

While some expressed their beliefs on the potential effects of the SEC’s lawsuit against Binance and Coinbase, other crypto professionals explored the motivation and fairness of the SEC’s move. 

According to David Schwed, the chief operating officer of Blockchain security firm Halborn, the SEC’s mandate is to ensure the safeguarding of investors. Schwed believes that this can be done through clear regulations, not through enforcement actions. The executive added that SEC Chair Gary Gensler’s motivations may be skewed. “It seems to me that his personal ambitions and the need to validate his stance have now superseded his core mandate,” he explained.

Alex Strześniewski, the founder of the decentralized finance protocol AngelBlock, described the SEC’s actions as “lazy.” The executive believes that it does not drive proper regulation forward. He explained: 

“It’s like a school teacher berating you for giving the wrong answers but failing to give any explanation beyond that. I also don’t believe that the SEC does, in fact, have jurisdiction over everything they’re claiming to.”

Meanwhile, Tim Shan, the chief operating officer at decentralized exchange Dexalot, expressed mixed feelings about the lawsuits and said the SEC’s actions are unfair to the community. 

“They’ve provided very little clarity or guidance to the crypto community. They are regulating through the courts, which is really quite unfair and not the right way to regulate/govern,” he said. 

Impact on prices of crypto stocks and altcoins

Stephan Lutz, the CEO of crypto trading platform BitMEX, shared insights on the potential effects of the SEC’s crackdown on exchanges on the market. In the short-term, Lutz said that there would be a downside pressure on the prices of crypto stocks, altcoins and valuations of crypto startups based in the US. Lutz explained that: 

“Investors are likely to keep funds in crypto but divest towards Bitcoin because these are unlikely deemed as a security, or stablecoins due to their correlation with fiat.”

In the medium and long-term, Lutz believes that exchanges will be cautious when dealing with customers based in the US and providing access to what the SEC is claiming to be securities. The executive also expressed frustration that regulators are “taking the issue of securities definition to the courthouse once again,” instead of offering clearer guidelines.

BitMEX has notably had its share of troubles with regulators in the US. In 2021, the trading platform agreed to pay up to $100 million to resolve a case with the Commodity Futures Trading Commission (CFTC) and the Financial Crimes Enforcement Network (FinCEN). In 2022, a New York court ordered BitMEX founders to pay $30 million in civil penalties. 

Cryptocurrency

Dogecoin (DOGE) Rally or More Pain for the Bulls: What’s Next for the Meme Coin

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TL;DR

  • Dogecoin (DOGE) has dropped to around $0.14, a 12% decline in a week, but some analysts expect a potential price surge based on technical patterns.
  • Market analysis shows DOGE has strong support at $0.115 and resistance at $0.16, with an RSI of 48 indicating it is neither overbought nor oversold.

Where’s DOGE Headed?

The largest meme coin in terms of market capitalization – Dogecoin (DOGE) – has been heavily affected by the recent market decline. Its price tumbled to approximately $0.14, representing a 12% plunge on a seven-day scale. 

DOGE Price
DOGE Price, Source: CoinGecko

Despite the downtrend, many X users expect new explosive moves from DOGE. An example is CryptoJack, who anticipates a substantial uptick once the asset’s price breaks out from a certain descending pattern. He envisioned a 55% increase to as high as $0.22, promising to enter a long position.

Trader Tardigrade speculated, too, claiming that DOGE has been following a specific bullish parallel channel that could eventually lead to a price surge of over $12. The trader paid particular attention to the $1.40 resistance level, which might be reached sometime next year. 

The market intelligence platform IntoTheBlock recently suggested that the meme coin is positioned “above a significant on-chain support level.” The entity estimated that 45 million assets were accumulated at an average price of $0.115, “indicating a strong demand zone that could prove important if the market shows weakness.” 

“On the upside, DOGE may face resistance around the $0.16 level, where 20 billion DOGE is presently held at a loss,” IntoTheBlock added.

Previous Predictions and On-Chain Metrics

Altcoin Sherpa and KALEO are also among those who recently forecasted a bright future for DOGE. The former expects the meme coin “to do something stupid later this year, and there’s nothing you can do about it.” The analyst claimed that dealing with it is one of “the safest trades” during the next bull cycle.

KALEO went even further, assuming that DOGE may outperform Bitcoin (BTC) due to the assumption that the industry is in a “meme super cycle.” 

One essential on-chain indicator that signals a resurgence for the asset is the Relative Strength Index (RSI). This technical analysis tool determines whether the cryptocurrency is overbought or oversold. It ranges from 0 to 100, and a ratio above 70 suggests a selling opportunity. The RSI currently stands at 48 and has not crossed the aforementioned level since May 21.

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Bitcoin Struggles at $67K as Polkadot (DOT) Tests $6.5 Resistance (Market Watch)

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The cryptocurrency market has been trending sideways for the past few days, following the considerable declines from earlier in the week. It appears that traders are now looking for a direction, and major cryptocurrencies trade around important levels.

Let’s start with Bitcoin.

Bitcoin Struggles at $67K

Bitcoin’s price seems incapable of moving past the $67K definitively, having dropped toward it earlier in the week. At the time of this writing, BTC is right around that level, trading at a 1% loss for the past 24 hours.

btc_price_chart_1406241
Source: CoinGecko

As seen in the chart, the price did attempt to move above $68K yesterday, but the sellers intercepted the move and prevented any further increase.

The predominant action remains rather choppy, catching many over-exposed leveraged positions and liquidating them. In fact, around $110 million worth of leveraged positions were wiped out throughout the past 24 hours alone, with BTC accounting for almost $30 million of that. This is what the liquidation heatmap looks at the time of this writing:

liquidation_heatmap
Source: CoinGlass

Altcoins Also Unable to Progress

The altcoin market is also failing to progress, with most of the cryptocurrencies from the top 100 by means of total capitalization unable to chart any gains.

heatmap_1406241
Source: Quantify Crypto

Solana is down 2.6% and currently trading below $15, while XRP fell below the critical level of $0.5 and is now down 1.5%. Polkadot, albeit down 1.4% on the day, is now testing the important $6.5 level, and if it breaks to the upside, the bulls may attempt to spark an uptrend.

Binance Coin is trading mostly flat on the day, which is more or less true for Ethereum (ETH) as well.

Meme Coin Outlook

It’s safe to say that meme coins have become an important part of the broader market in 2024. However, this week’s downturn didn’t exactly spare them either.

Here’s what their performance looks like over the past 24 hours:

  • DOGE lost 0.4%
  • SHIB is trading flat
  • PEPE is down 4,8%
  • WIF is down 3.9%
  • FLOKI lost 3.1%
  • Book of Meme (BOME) exploded by 10%

The reason behind BOME’s impressive performance is that Coinbase – the leading US-based cryptocurrency exchange – announced support for it.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.

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Ripple (XRP) v. SEC Lawsuit Update June 14th: Company Lawyer Says $10 Million Fine is Appropriate

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TL;DR

  • Ripple contends that the SEC’s proposed $2 billion penalty is excessive, suggesting a fine of no more than $10 million.
  • The company’s CEO anticipates a resolution by summer 2024, though the complex legal process could cause delays.

Ripple’s Arguments

The legal spat between Ripple and the US Securities and Exchange Commission (SEC) has been ongoing for more than three years, recently entering its trial phase. The lawsuit resolves around the regulator’s accusations that the company and some of its executives conducted an unregistered securities offering by selling its XRP token. 

Earlier this year, the SEC sought a $2 billion penalty on the firm alleging the aforementioned violations. Ripple did not welcome the idea, with chief legal officer Stuart Alderoty arguing the fine should not exceed $10 million. 

Most recently, the company’s lawyers doubled down on the request, comparing the case with the one between the Commission and Terraform Labs. Recall that the defunct crypto firm agreed to pay a $4.47 billion fine for its fraudulent activity. The amount includes $3.6 billion in disgorgement, $466 million in prejudgment interest, and a $420 million civil penalty.

The defense said the SEC has previously agreed that civil penalties should range from 0.6% to 1.8% of the defendant’s gross revenue, claiming that Terraform Labs “fits that pattern.” As such, the attorneys concluded that an “appropriate” fine for Ripple would be no more than $10 million.

In addition, the lawyers noted that a jury in Manhattan found Terraform Labs and its co-founder Do Kwon liable on civil charges and “recklessly orchestrating one of the largest securities frauds” in US history. In contrast, they added, there are no direct allegations of fraud in the case between Ripple and the SEC.

Is the Lawsuit Nearing a Resolution?

Despite being in its trial stage, the legal battle may drag on for years due to the complexity of the process and possible delays and appeals from both parties. According to Ripple’s CEO Brad Garlinghouse, though, the resolution may occur as soon as this summer. 

“My estimation is sometime before the end of the summer. Somebody asked me about the end of August, but I pointed out that September 21 is the end of the summer,” he recently said.

Another person who believes the case may officially end in the next few months is the American lawyer Jeremy Hogan. He envisioned a $100 million settlement:

“I’m saying that the Judge will order 0 disgorgement but throws the SEC a bone and orders Ripple to pay a $100 million penalty.”

Some might view the SEC as the underdog in the lawsuit, considering the company’s three partial court wins secured throughout 2023. XRP’s price reacted positively after each triumph, meaning a decisive victory may once again cause a substantial rally. Those willing to learn more about the legal battle and its impact on Ripple’s native token, feel free to take a look at our dedicated video below:

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