Copyright © 2023 All Rights Reserved
9 Min
Welcome to Lab51 Crypto News, your go-to source for staying up to date with the latest developments in the cryptocurrency industry. This week, we cover a range of exciting topics, including new Bitcoin price predictions, updates on the SEC and Coinbase dispute, new crypto regulations in the EU and Canada, and the latest case of lawsuit between crypto firms.
Key Takeaways:
Standard Chartered, the British multinational bank, has revised its Bitcoin price forecast to $120,000 by the end of 2024, signaling a 300% leap from its current value. The bank's report suggests that the rise in Bitcoin's price will primarily be driven by miners hoarding their coins and limiting additions to Bitcoin's circulating supply.
Geoff Kendrick, one of Standard Chartered's top foreign exchange analysts, explains in the report that increased profitability per mined BTC allows miners to sell fewer coins while maintaining cash inflows, thus reducing the net supply of Bitcoin and driving prices higher.
Bitcoin has experienced significant growth this year, with an 82% increase since January 1st, currently holding above $30,000. This bullish momentum has helped boost the revenue of the industry, reversing the declining revenue trend seen in 2022.
The report also highlights the shift of BTC from short-term holders to long-term holders as a positive indicator. The data from Glassnode shows that a considerable portion of Bitcoin has moved from short-term holders to strong hands, which has historically been a component of previous Bitcoin bull markets.
The market is also looking to the possibility of a Bitcoin spot ETF approval in the United States, with BlackRock having recently filed for such a product. Approval of a Bitcoin ETF could further fuel the upward trajectory of Bitcoin prices.
Key Takeaways:
As part of the ongoing dispute, the U.S. Securities and Exchange Commission (SEC) has made allegations against Coinbase, a leading cryptocurrency exchange, claiming that the company was aware of securities law violations. According to the SEC, Coinbase allowed the trading of unregistered securities on its platform and failed to comply with necessary regulations.
According to the SEC's letter to a district judge on July 7th, Coinbase was aware of the possibility that federal securities laws would apply to its operations. The company openly informed its shareholders about the risk of assets traded on its platform being classified as securities.
“Since becoming a public company, Coinbase has repeatedly informed its shareholders of the risk that the crypto assets traded on its platform could be deemed securities and therefore that its conduct could violate the federal securities laws,” reads the regulator’s response.
The allegations raise concerns about Coinbase's legal standing and potential repercussions. If found guilty, the exchange could face penalties and damage to its reputation. The SEC has been closely monitoring the cryptocurrency industry, particularly regarding compliance with securities laws, and has been taking action against companies that violate regulations.
The outcome of this case will have significant implications for both Coinbase and the broader cryptocurrency industry. It highlights the importance of adhering to securities laws and regulations, particularly as cryptocurrencies gain more mainstream acceptance. Regulators around the world are increasingly focusing on enforcing compliance and investor protection in the crypto space.
Key Takeaways:
ESMA, the European Securities and Markets Authority, has taken a significant step in regulating the cryptocurrency industry by issuing the first batch of detailed crypto rules under the Markets in Crypto-Assets(MiCA) law. These rules aim to establish a comprehensive regulatory framework for crypto assets within the European Union. The guidelines cover various aspects of the industry, including licensing requirements, investor protection measures, and governance standards for crypto asset service providers.
The release of these rules showcases the EU's commitment to fostering a secure and transparent environment for digital assets. By implementing robust regulations, ESMA aims to protect investors, enhance market integrity, and promote fair competition in the rapidly evolving crypto space. These rules will help ensure that crypto service providers adhere to strict compliance standards, mitigating the risks associated with fraud, money laundering, and market manipulation.
ESMA's detailed crypto rules under the MiCA law provide clarity and guidance to both industry participants and investors operating within the EU. The regulations cover a wide range of activities, including the issuance and trading of crypto assets, custody and administration services, and operating multilateral trading platforms.
ESMA said a further tranche of consultations will follow in October, covering sustainability and record-keeping, with a final batch due in early 2024 that will consider when crypto counts as a security and how foreign companies will be able to serve EU clients.
By setting clear standards and requirements, ESMA aims to foster confidence and trust in the crypto market, encouraging responsible innovation and attracting more traditional financial institutions into the space.
Key Takeaways:
The Canadian Securities Administrators (CSA) has released guidance aimed at public investment funds holding crypto assets in Canada. The guidance provides an overview of public crypto asset funds operating in the country and outlines the CSA's expectations regarding securities law requirements. It covers various aspects, including market characteristics of crypto assets, custody expectations, yield-generating activities like staking, and the know-your-client and suitability obligations related to public crypto asset funds.
Stan Magidson, CSA Chair and CEO of the Alberta Securities Commission highlighted the need for public crypto asset funds to understand their existing regulatory obligations, particularly in light of recent events in the crypto market. The CSA encourages stakeholders to review the guidance to gain a better understanding of these expectations.
While investing in crypto assets, even through public investment funds, carries higher risk and may not be suitable for most retail investors, the CSA recognizes the importance of regulatory oversight for investor protection. However, it is important to note that regulatory oversight cannot eliminate all the risks associated with investing in crypto assets, given their speculative nature and high volatility.
In parallel with the new regulatory guidelines, stricter rules for crypto service providers in Canada have led to major players such as Binance and Bybit exiting the jurisdiction. The Canadian financial regulator is implementing a coordinated oversight regime for cryptocurrency activities, requiring registration and compliance with investor protection measures. The new rules also aim to restrict retail investors access to leveraged trading of cryptocurrencies and impose requirements for segregated customer assets and appropriate custodianship.
Key Takeaways
Gemini, the prominent crypto platform founded by Cameron and Tyler Winklevoss, has taken legal action against Digital Currency Group (DCG) and its CEO Barry Silbert. The lawsuit, filed in New York Supreme Court, accuses DCG and Silbert of orchestrating a scheme of deception, defrauding Gemini customers out of hundreds of millions of dollars.
According to the complaint, Gemini customers and other depositors were persuaded to lend substantial amounts of cryptocurrency and U.S. dollars to Genesis (a DCG subsidiary) through a program called Gemini Earn. The program promised customers high-interest rates of up to 7.4% on their loans and the ability to withdraw their funds at any time. However, in November, amidst market turbulence, Gemini froze withdrawals, leaving customers' assets locked up. It was later reported that the outstanding balance was around $900 million.
Gemini attributes the debacle to Silbert and DCG, alleging that they lied about Genesis's risk-management practices. Genesis suffered significant losses after the collapse of the crypto hedge fund Three Arrows Capital. Despite this, Gemini claims that Silbert and DCG portrayed the situation as business as usual, causing a ripple effect that affected Gemini and ultimately led to Genesis filing for bankruptcy protection.
Digital Currency Group issued a statement calling the lawsuit a "publicity stunt" and denying any wrongdoing. They expressed confidence in reaching an amicable solution regarding the Genesis bankruptcy.
As the legal battle unfolds, the outcome will have implications for the responsibilities and accountability of crypto platforms in safeguarding customer funds and providing accurate information about associated risks.