$627m outflow as CFTC targets Binance! + Disney ditches the metaverse!
Overview
CFTC targets Binance.
THORChain hits the brakes.
Chinese banks court Hong Kong crypto firms.
Disney ditches the metaverse.
MakerDAO proceeds with endgame proposal.
Good Morning Banter Fam,
The US crackdown on crypto continues…
Yesterday, the US Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and its founder, Changpeng Zhao (CZ). The CFTC alleges that Binance knowingly offered unregistered crypto derivative products in the United States. The lawsuit accuses Binance of violating multiple US laws, including failing to register as a futures commission merchant, designated contract market, or swap execution facility, as well as neglecting to implement anti-money laundering or Know-Your-Customer (KYC) processes.
In a press release by the CFTC, the agency representative stated “Today’s enforcement action demonstrates that there is no location, or claimed lack of location, that will prevent the CFTC from protecting American investors. I have been clear that the CFTC will continue to use all of its authority to find and stop misconduct in the volatile and risky digital asset market”.
CZ directly responded to the “unexpected” allegations by stating the firm had been cooperatively working with the CFTC for over two years and that the complaint “appears to contain an incomplete recitation of facts.” CZ also stated that the firm is committed to transparency and cooperation with law enforcement and regulators.
According to Nansen analytics, Binance exchange has seen an outflow of $627m in the past 24 hours since the accusations.
Market update 🌍
Bitcoin Analysis
BTC plummeted -3.55% in a span of 4 hours after the CFTC’s accusations against Binance were released. Price managed to rebound slightly but plummeting volume will lead to strong volatility. Since Binance serves as one of the largest and most liquid crypto exchanges, the crackdowns could hold significant consequences for crypto markets. BTC completed the daily candle down -3.00% to $27,129.
Newswatch 📰
THORChain hits the brakes! THORChain has hit the pause button on its network due to some buzz about a potential vulnerability. They announced on Twitter that they've halted all trading to play it safe while they check out these claims. The news came hot on the heels of social media reports suggesting that both Nine Realms - THORChain's liquidity platform - and their security team THORSec received "credible reports" about a possible issue affecting THORChain. So, they've pumped the brakes on the network, just in case!
Chinese banks court Hong Kong crypto firms. Hong Kong's upcoming crypto licensing regime in June has attracted crypto firms to set up shop in the region. But guess who's joining the party? None other than Chinese state-owned banks! According to a March 27 Bloomberg report, banks like Shanghai Pudong Development Bank, Bank of Communications Co., and Bank of China Ltd. have either started providing banking services to crypto firms or have shown interest in doing so. One source even mentioned a Chinese bank sales rep visiting a crypto firm's office to offer their services! And all of this is happening amidst a crypto ban in China. Talk about unexpected friendships in the world of crypto!
MakerDAO’s endgame. MakerDAO's community has approved a set of rules that outline the protocol's governance, development, and investments of its reserves. This includes the adoption of Maker's "Constitution", which sets guiding principles for the platform's future. The plan includes breaking up MakerDAO's current structure into self-governing entities called subDAOs, investing some of its $7 billion reserves into real-world assets, and restructuring its governance through the establishment of new groups. The move is part of Maker's major overhaul called "Endgame," which aims to decentralize the backing of its stablecoin DAI and make it more resistant against censorship and sanctions.
News tidbits:
Arbitrum Twitter mistakenly suspended yesterday.
BlockFi to refund $100k to Californian clients.
Microstrategy buys $150m in BTC and repays $205m Silvergate loan.
DYDX set to launch a private testnet.
NFT & metaverse update 🐵
Disney ditches the metaverse! In a surprising move, entertainment powerhouse Disney has decided to let go of its metaverse division as part of a larger restructuring plan. Disney aims to slash operating expenses by a whopping $5.5 billion and say goodbye to 7,000 staff members over the next two months. The news, shared by The Wall Street Journal, reveals that nearly all 50 members of the metaverse division will be left without new employment contracts, with the exception of Michael White, who headed the consumer products unit.
Banter’s take
Have you ever wondered why US authorities are taking such a tough stance on crypto? It may all come down to the Federal Reserve's planned launch of its FedNow payments service by July 2023. The service promises to offer seamless, round-the-clock instant payment services to both individuals and institutions. Since crypto could be viewed as a direct competitor, it's not surprising that US authorities are taking steps to reduce competition. While FedNow isn't exactly a CBDC, it's expected to behave similarly, bolstering the global authoritative power of the US Dollar.
Of course, we understand the concerns that come with CBDCs, and we're not advocating for them. However, programs like FedNow are a reality that the crypto industry will need to navigate in the coming years. It's just another challenge that the industry will need to overcome to continue growing and innovating.
Gabriel
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