crypto exchange

What happened in crypto this weekend?

Tether is working closer with U.S. law enforcement, revealing it has already frozen 326 wallets linked to criminals, while VanEck CEO has pled a bullish case for the future of Bitcoin.

Stablecoin issuer Tether (USDT) has revealed it has frozen 326 wallets linked to criminals, totaling $435 million as of Dec. 15, and is working closer with U.S. law enforcement agencies than ever before.

“We have assisted in freezing, as of the date of this letter, approximately 326 wallets totaling approximately USDT 435 Million,” the firm’s CEO Paolo Ardoino explained to Senator Cynthia Lummis and U.S. Representative French Hill on Dec. 15.

Tether said it also onboarded the United States Secret Service into its platform to strengthen its compliance measures with U.S. law enforcement and is in the same process with the FBI.

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Crypto exchange liquidity, explained

Crypto exchange liquidity hinges on market depth and incentivized trading to ensure robust and stable trading environments.

The ease and speed with which assets can be bought or sold without materially altering their prices is referred to as liquidity in the financial markets. 

It’s the ability to swiftly turn an asset into cash without significantly impairing its value. High liquidity indicates a healthy market with plenty of buyers and sellers, which promotes smooth transactions and stable prices. It ensures that investors can profitably enter into or exit positions, reducing transaction costs and the risks of abrupt price swings.

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OPNX quips about its early dismal volume after reporting 90,000% surge

OPNX exchange has joked about its earlier low trading volume before experiencing a big surge in volume during the last 24 hours.

Open Exchange (OPNX) has claimed to have experienced a massive surge in trading volume and has joked about its dismally low volume on its opening day.

According to an April 10 tweet by OPNX, its day one trading volume on April 4 hit a total of $13.64 but has since apparently seen a surge to $12,398 on April 9, an increase of over 90,000%.

However, new data suggests the trading volume has seen a far bigger increase during the last 24 hours.

According to CoinGecko data, OPNX’s 24-hour trading volume as of April 10 has exploded to over $179,000, representing a gain of around 24,500% since April 9.

The vast majority of the volume has come from the trading pair for Bitcoin (BTC) and Tether (USDT), with more than $178,000 worth coming from the pair.

It’s unclear what exactly sparked the increase but it could be connected to the April 9 announcement from OPNX about a new market-making program to help increase its volume.

OPNX’s trading volumes may also be a result of the steady climb in the price of BTC, which has seen the largest crypto by market cap cruise past $30,000 for the first time since June.

Related: 3AC, Coinflex founders collaborating to raise $25M for new claims trading exchange

OPNX CEO Leslie Lamb announced the exchange was open for business on April 4. The firm is the result of a partnership between the co-founders of crypto investment firm Coinflex and the co-founders of the collapsed hedge fund Three Arrows Capital, Su Zhu and Kyle Davies.

The crypto community has had a mixed response to the unveiling of OPNX and its reported trading volume.

Some comments criticized the exchange’s connection with Davies and Zhu, whose whereabouts have remained unclear since the 2022 collapse of 3AC, which once held $10 billion worth of assets.

Others, meanwhile, ridiculed OPNX’s still relatively low trading volume, joking that Changpeng “CZ” Zhao, the CEO and founder of Binance, would be worried about the project.

In contrast, Binance posted a 24-hour volume of over $11 billion compared to OPNX’s $179,000, as per data from CoinGecko.

Magazine: Zhu Su’s exchange did $13.64 in volume akshually, Huobi in crisis: Asia Express

Binance-CFTC FUD puts BNB price at risk of dropping toward $200

Recent BNB price trends show that the token is declining in the short term after regulatory crackdowns. However, this time, the correction may last longer.

BNB (BNB) looks set to wipe out its March gains entirely as investors turn their attention to the latest regulatory crackdown on Binance, the world’s leading crypto exchange by volume.

BNB price logs worst daily performance in over a month

On March 27, the United States Commodity Futures Trading Commission sued Binance and its CEO, Changpeng “CZ” Zhao, alleging that the company illegally offered crypto derivatives services to Americans and facilitated illicit financial activity.

BNB dropped by over 5.5% to $305 on the announcement day, logging its worst daily performance since Feb. 13, when its price dropped by over 5.8% due to another regulatory crackdown involving Binance-branded stablecoin Binance USD (BUSD).

BNBUSD daily price chart. Source: TradingView

BNB’s price stabilized on March 28, wobbling between gains and losses as CZ refuted CFTC’s allegations. However, the BNB/USD pair risked falling further if one considers its recent response to regulatory actions. 

For instance, the New York regulator’s BUSD crackdown in February 2023 preceded a 15%-plus BNB price decline.

BNB price reaction to regulatory crackdowns since 2022. Source: TradingView

Similarly, BNB plunged by up to 10.75% after the Dutch Central Bank slapped a $3.4-million fine on Binance in July 2022 for offering unlicensed crypto services. It also dropped 25% in February 2022 after Binance halted its operations in Israel, fearing a crackdown.

Rising wedge breakdown underway

The Binance-CFTC FUD has triggered a bearish reversal setup previously covered in February. 

Related: Here’s how Binance is mitigating its stablecoin needs after BUSD ban

This setup involves a rising wedge pattern whose breakdown could lead to a 25% price correction toward $250 by the end of March. The March banking crisis and its positive impact on top-ranking crypto assets may have delayed the bearish call. 

BNB/USD daily price chart featuring rising wedge breakdown setup. Source: TradingView

Simultaneously, BNB is eyeing an extended price decline toward $200 due to the formation of another rising wedge pattern on the daily chart, as shown below.

BNB/USD daily price chart. Source: TradingView

Therefore, BNB’s price could drop by as much as 30% by April when measured from current price levels. 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

CoinEx crypto exchange sued by New York for failing to register with state

The New York Attorney General is looking for a court order to remove the exchange from the state and wants it to block all internet addresses originating from New York.

Cryptocurrency exchange CoinEx has been sued by New York Attorney General Letitia James, who alleges the firm falsely represented itself as an exchange by failing to register as a securities and commodities broker-dealer in the state.

A 38-page petition filed by James in the New York Supreme Court on Feb. 22 alleged CoinEx “engaged in repeated and persistent fraudulent practices” and violated the state’s Martin Act — considered one of the most strict anti-fraud and securities regulation laws in the United States.

She also asserted CoinEx listed various tokens that qualified as “both commodities and securities,” naming Amp (AMP), LBRY Credits (LBC), Rally (RLY) and Terra (LUNA).

In a Feb. 22 statement, James said that CoinEx is not registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission, “as is required under New York law” to sell the tokens.

The Attorney General’s Office created a CoinEx account with a New York-based computer and internet address and alleged it was able to trade on the platform.

“The days of crypto companies like CoinEx acting like the rules do not apply to them are over,” she added.

Related: Rep. Maxine Waters says all US regulators ‘better get together on crypto’

The petition also states that CoinEx failed to comply with a Dec. 22 subpoena sent by the Attorney General’s Office in order to “provide testimony concerning the virtual asset trading activities of its platform.”

“CoinEx was compelled by subpoena to appear for an examination under oath on January 9, 2023, and failed to appear […] CoinEx’s non-appearance is prima facie proof that CoinEx has engaged in the [mentioned] fraudulent practices.”

In the petition, James is seeking a court order to stop CoinEx from marketing itself as an exchange and prevent it from operating in the state by ordering it to geoblock internet addresses and GPS location data originating from New York.

Cointelegraph contacted CoinEx for comment but did not receive an immediate response.

Coinbase beats Q4 earnings estimates amid falling transaction volume

Transaction volume on the exchange fell 12% in 2022’s fourth quarter, but the firm still beat forecast earnings despite a 57% year-on-year revenue drop.

United States-based cryptocurrency exchange Coinbase has beaten revenue expectations for the fourth quarter of 2022 but continued to see its transaction volume decline.

Net revenue for the exchange came in at $605 million for the quarter, beating the $589 million revenue reportedly estimated by Wall Street analysts

Transaction volumes decreased 12% compared to the prior quarter, however Coinbase pointed to a 34% increase in subscription and service revenues as the reason for its 5% total revenue growth for the quarter.  

While Coinbase reiterated its belief that its staking products are not securities, staking revenues fell compared to the prior quarter as the fall in crypto prices outweighed the increase in staked balances across all crypto tokens.

Related: US regulatory crackdown leads to $32M digital asset outflows: CoinShares

The exchange is currently facing an investigation by the U.S. Securities and Exchange Commission into its staking products, similar to the probe tharesulted in its peer crypto exchange Kraken settling with the regulator for $30 million.

Coinbase noted that 2022 was “a challenging year for crypto markets,” with macroeconomic events and events such as the bankruptcies of crypto hedge fund Three Arrows Capital and exchanges Voyager and Celsius resulting in strong headwinds for the industry.

Binance withdrawals and BUSD redemptions surge post Paxos crackdown

Net outflows at the cryptocurrency exchange hit $788 million over the last 24 hours, however, Binance told Cointelegraph that “Funds are SAFU.”

Cryptocurrency exchange Binance has seen a surge of withdrawals over the last 24 hours as investors appear to be spooked over recent news of regulatory action against Paxos and its stablecoin Binance USD (BUSD).

At the same time, the BUSD token has recorded significant redemptions, with 342 million BUSD burned over the last 24 hours according to Peckshield.

On Feb. 12, news broke that the United States Securities and Exchange Commission gave notice of potential enforcement action against Paxos. It alleged the stablecoin is an unregistered security, an assertion that Paxos denies.

Data compiled from the blockchain intelligence platform Nansen show that Binance recorded 24-hour multichain token net outflows of $788.5 million, caused by outflows of $2.7 billion exceeding inflows of around $1.97 billion.

According to Dune analytics data, it’s the largest 24-hour net outflow since Dec. 17, when Binance’s ​​proof-of-reserve audits were removed from auditor Mazars’ website.

A spokesperson for Binance told Cointelegraph that “funds are SAFU” — backed by a Secure Asset Fund for Users — echoing what Binance chief Changpeng “CZ” Zhao said earlier on Feb. 13.

The spokesperson added that the exchange recently had a sell-off with “more than $1 billion” withdrawn in a 12-hour period, which it claims “was managed with ease.”

“We run a very simple business model — hold assets in custody and generate revenue from transaction fees,” Binance said, adding:

“We take our responsibility as a custodian seriously and maintain 1:1 backing for every user asset.”

Following the SEC’s action and a reported tip-off from USD Coin (USDC) issuer Circle, the New York Department of Financial Services (NYDFS) ordered Paxos to halt the issuance of BUSD on Feb. 13.

Related: Are stablecoins securities? Well, it’s not so simple, say lawyers

The outflows and token burns seemingly are a response to those events, with crypto users cashing out of the stablecoin over fears of further regulatory action.

Binance’s reserves harbor the largest amount of BUSD, holding $14.4 billion worth of the stablecoin, or around 90% of the $16.1 billion current market cap.

The crypto exchange also has around $60 billion worth of reserves, with 22% of that made up of BUSD.

Aussie regulator flagged concerns about FTX months before collapse: Report

Australia’s financial regulator raised concerns about FTX Australia not long after it began operations last March, according to documents.

Australia’s financial regulator reportedly raised concerns over FTX’s local Australian subsidiary as long as eight months before the exchange met its untimely end in November.

According to documents obtained by Guardian Australia, the Australian Securities and Investments Commission (ASIC) was concerned about the way that  FTX Australia was operating after it was able to obtain a license in the country through a company takeover.

According to a previous report from Cointelegraph, FTX acquired its Australian financial services license (AFSL) by taking over financial institution IFS Markets in December 2021, before opening up for business a few months later in March.

This is allowed FTX Australia to effectively sidestep the same level of scrutiny that is usually applied to new AFSL licensees, according to its ASIC Chairman Joe Longo.

According to the newly obtained documents, the regulator issued a Section 912C notice to FTX the same month it began operating, requiring the crypto exchange to provide information about its operations for ASIC to assess if it met AFSL license conditions.

With the notice, ASIC can direct the licensee to provide documents specifying what financial services it provides and the financial services business it carries on, to determine if the licensee satisfies the “fit and proper person test.”

A briefing document obtained by the Guardian also confirmed that in the months between ASIC’s initial concerns and FTX collapsing on Nov. 11, the regulator put the exchange under “surveillance activity” and issued a total of three notices to it.

The document schedule also reveals that the regulator was still concerned about FTX’s operations as late as October.

Cointelegraph reached out to ASIC for a comment but did not receive a response before publication.

Related: ASIC fires industry warning shot as it sues BPS Financial over crypto promo

FTX Australia was one of more than 130 FTX-linked companies that halted operations after its parent company FTX went into bankruptcy proceedings on Nov. 11,.

The Australian subsidiary of FTX had its financial license suspended on Nov. 16and has gone into voluntary administration, which is similar to a Chapter 11 bankruptcy in the United States.

It’s estimated around 30,000 Australian customers and 132 companies are owed money or crypto from the exchange.

FTX creditor list shows airlines, charities and tech firms caught in collapse

The over 100-page long document lists every entity FTX owes money to, from Big Tech players to local businesses near its Bahamian headquarters.

A complete list of the creditors owed money by the bankrupt cryptocurrency exchange FTX has been released, revealing a myriad of companies and government entities wrapped up in its collapse.

Late on Jan. 25, lawyers for FTX filed its creditor matrix to the United States Bankruptcy Court for the District of Delaware. The massive 115-page document details the names of its creditors in alphabetical order.

The list reveals the sprawling global web of companies from airlines, hotels, charities, banks, venture capital firms, media outlets and crypto companies along with U.S. and international government agencies all owed money by the fallen exchange.

The names of nearly 9.7 million (9,693,985) FTX customers with funds stuck on the exchange were however redacted from the document.

Notable crypto and Web3-related companies owed money by FTX include Coinbase, Galaxy Digital, Yuga Labs, Circle, Bittrex, Sky Mavis, Chainalysis, Messari and entities of Binance.

Big Tech players Apple, Netflix, Amazon, Meta, Google, LinkedIn, Microsoft and Twitter were also included as creditors. The New York Times, The Wall Street Journal and CoinDesk were among the media outlets mentioned.

“Shark Tank” star Kevin O’Leary (right) pictured with FTX founder Sam Bankman-Fried. O’Leary is a former FTX spokesperson and a production company he owns is listed as a creditor. Source: SALT NY

The tax offices of multiple U.S. state agencies and the federal Internal Revenue Service (IRS) were listed. Other government entities in Japan, Australia and Hong Kong, among others, are also creditors.

FTX not only owes large entities but seemingly smaller businesses too, as a Nassau-based pest control business and a garden center appear on the list.

The company’s prior public relations company, M Group, appeared as a creditor. FTX hired the firm to represent them, but the company said it ceased work with FTX upon its bankruptcy.

The filing didn’t include what each entity was owed and inclusion on the list does not mean it had a trading account with FTX.

Related: Crypto lawyers to be in demand as regulatory pressure reaches boiling point

Earlier filings made in November by FTX’s lawyers speculated the exchange may have over a million creditors.

In a December tell-all Twitter thread, a previous FTX employee detailed the “moronically inefficient” luxury expenditures of the business.

Some entities on the list point to the company’s prior excessive expenditures, with Uber Eats and Doordash entities from all over North America and Australia on the list along with Airbnb and the names of multiple luxury hotels around the world.

CFTC commissioner: Crypto exchanges shouldn’t ‘self-certify’ tokens

Commissioner Christy Goldsmith Romero wants crypto exchanges blocked from self-certifying crypto and crypto products before going live on their platforms.

A commissioner from the Commodity Futures Trading Commission (CFTC) has called on Congress to stop allowing cryptocurrency exchanges to “self-certify” and list tokens without oversight.

CFTC commissioner Christy Goldsmith Romero told an audience at a Jan. 18 University of Pennsylvania event focused on FTX that the current process wasn’t adequate to ensure proper oversight, saying:

“I urge Congress to avoid permitting newly-regulated crypto exchanges to self-certify products for listing, under the current process that limits CFTC oversight.”

“It is critical to institute guardrails against regulatory arbitrage, and that includes prohibiting the use of the self-certification process,” she added.

Currently, crypto exchanges can “self-certify” their product’s safety before listing unless the CFTC blocks the listing within 24 hours.

CFTC Commissioner Christy Goldsmith Romero Source: Twitter

She said this process used to list products such as crypto futures isn’t adequate for that type of asset.

Goldsmith Romero added crypto businesses looking to issue tokens could use the CFTC’s crypto regulatory framework to circumvent registration with the Securities and Exchange Commission (SEC).

Proposals to give the CFTC an increased role in oversight of the crypto industry were introduced to Congress in 2022.

Crypto ‘gatekeepers’ need to ‘step up’

During her speech, the commissioner also called on lawyers, compliance professionals, celebrities, venture capital firms and pension fund investors to conduct better due diligence on crypto firms.

“Gatekeepers themselves also need to step up, and call for compliance, controls, and other governance, without allowing the promise of riches and the company’s marketing pitch to silence their objections to obvious deficiencies.”

Remarking on FTX, which declared bankruptcy in November 2022 after mishandling and misplacing customer funds, Goldsmith Romero said these entities “should have seriously questioned the operational environment at FTX in the lead-up to its meltdown.”

“If the digital asset industry wants to regain any amount of public trust, it has some work to do,” she added.

Some crypto industry observers have continued to argue that the circumstances behind FTX’s collapse should not be pegged to the digital asset space or a lack of regulation.

Related: Digital Dollar Project urges US to take action on CBDC development

SEBA Hong Kong’s managing director Ludovic Shum told Cointelegraph during an interview this week that the fall of FTX could have easily happened in any other industry. 

“At the end of the day, it goes back to the trust regarding the checks and balances […] It was just unfortunate that it happened in this fast-growing area of the crypto world where it could have easily happened to banks, securities, houses, asset managers,” said Shum.

Meanwhile, Lachlan Feeney, Founder and CEO of blockchain development agency Labrys said the industry needs more oversight, not necessarily regulation to prevent another disaster.

“The FTX scandal didn’t happen because of a lack of regulation. FTX operated [allegedly] illegally; disregarding the existing regulations rather than capitalizing on an absence of regulation.”

“There should probably be more oversight to stop unscrupulous players and activity before situations escalate, but we don’t need masses of new regulation and red tape that deters innovation. We need clarity on the existing regulations,” he said in a statement to Cointelegraph.