TL;DR Breakdown
- The crypto and traditional markets have a busy week ahead on the US economic calendar, with US inflation, the Fed interest rate decision, and FOMC projections in the spotlight.
- As reported, the SEC will release unredacted versions of the infamous William Hinman speech-related docs that could force a settlement.
- SEC activity on Binance and Coinbase-related news will also move the dial.
The crypto industry has had a rollercoaster week, and the week ahead does not seem to be an easy one. As a result of a recent SEC (Securities and Exchange Commission) investigation, Binance and Coinbase are both being sued. The SEC charges Binance with conducting unregistered token sales and failing to register as an exchange over 13 separate counts.
Supposedly, Coinbase offers for sale digital currencies that are viewed as securities. Following the news, trading volume on decentralized exchanges surged, indicating increased market activity.
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US and China Economic Indicators
One of the five things to know about crypto is that the U.S. economic calendar has a significant upcoming week. On June 13, there will be a lot of attention on the US CPI Report. Bets on a more hawkish Fed interest rate trajectory to control inflation would rise if inflation remained sticky.
Wholesale inflation statistics will also influence the market before the FOMC Economic Projections, the Fed Chair Powell news conference, and the Fed interest rate decision on June 14. A sudden increase of 25 basis points and a pessimistic outlook would weigh.
However, in the second half of the week, investors should also consider data on U.S. retail sales, the Philly Fed Manufacturing Index, U.S. jobless claims, and Michigan consumer sentiment.
Given the continuing recessionary fears, economic information from China will also need to be considered. The dial will be moved on June 15 by industrial production and retail sales data.
The crypto market valuation decreased by $87.8 billion (-7.93%) to $1,019 billion morning on June 11 due to the SEC forcing Binance US to become a cryptocurrency-only platform.
Hope for SEC-Ripple settlement amid ongoing legal battle
The SEC will publish records about the William Hinman speech on June 13 without redactions. The SEC has filed at least seven motions since 2021 to get the documents protected by the attorney-client privilege. However, in mid-May, the Court rejected the SEC’s final request to seal the records connected to the Hinman address.
The SEC v. Ripple litigation, which has been ongoing since December 2020, may be significantly affected by the unredacted speech-related materials. Significantly, the information could exert pressure on U.S. politicians to restrain the SEC and reconsider its stance on regulation by enforcement, which has caught the attention of several platforms and resulted in charges being brought against Binance US, Binance, Binance CEO CZ, and Coinbase.
Ripple and the larger market would benefit from any indications of an SEC-Ripple settlement. XRP is down 5.70% for the week to $0.50435 due to news about Binance and the SEC.
US trading platforms face testing as Coinbase battles SEC
Investors should think about the effects of the SEC action against Coinbase, even though the SEC v. Binance case is likely to cause more anxiety.
Robinhood delisted Solana (SOL), Polygon (MATIC), and Cardano (ADA) on June 9. The action was taken in reaction to Coinbase’s SEC complaints. Significantly, after hearing the news, the delisted cryptos fell. ADA is down 29.89% this week, while MATIC and SOL are down 32.90% and 28.81%, respectively.
Top stories this week June 4th-10th
In a fresh round of legal actions against crypto startups, the U.S. Securities and Exchange Commission (SEC) has singled out Binance and Coinbase. On June 5, the regulatory body filed 13 complaints against Binance, including ones for unregistered token sales and offerings and failing to register as an exchange or broker-dealer.
The commission pursued Coinbase under similar circumstances, asserting that the exchange’s popular cryptocurrencies constitute securities. In the hours following the legal activities, trading volume increased by 444% across the significant decentralized exchanges. SEC enforcement proceedings involving cryptocurrencies increased by 183% in the six months following FTX’s bankruptcy.
SEC lawsuits: The SEC currently considers 67 cryptocurrencies to be securities.
According to media reports, following adding a few more cryptocurrencies to the list in its lawsuit against crypto exchanges Binance and Coinbase, the total number of cryptocurrencies the U.S. securities regulator classified as “security” reportedly reached 67. The SEC cited 13 cryptocurrencies in its lawsuit against Coinbase, whereas it added 10 to the securities categorization in its case against Binance.
Over $100 billion, or roughly 10% of the $1.09 trillion total market capitalization of all cryptocurrencies, are now classified as security products.
Brian Armstrong, the CEO of Coinbase, sold firm shares the day before the SEC filed a complaint against the exchange. Armstrong avoided a significant loss by making the trade, which prompted a small uproar in the Twitter crypto verse. According to SEC filings, Armstrong sold 29,730 shares of the company on June 5, the day before the SEC lawsuit. Under a 10b5-1 plan approved in August, Armstrong has been selling Coinbase stock regularly since November.
This plan predetermines the timing and magnitude of transactions. Armstrong and Binance CEO Changpeng Zhao’s net worth has taken a significant hit due to the lawsuits. Armstrong’s net worth decreased by $289 million and Zhao’s by $1.33 billion in just 30 hours.
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