Exchange

Rep. Davidson to introduce legislation to fire SEC boss Gensler for crypto overreach

A U.S. congressman has declared he will introduce legislation to have SEC boss Gary Gensler removed from his role.

Securities and Exchange Commission (SEC) chair Gary Gensler could be facing unemployment after United States Representative Warren Davidson declared he would introduce legislation to fire the SEC boss.

In an April 15 tweet responding to Coinbase’s legal chief, Paul Grewal, the crypto-friendly congressman announced his intention to have Gensler removed from his role after the SEC’s latest announcement about revisiting the proposed redefinition of an “exchange.”

“To correct a long series of abuses, I am introducing legislation that removes the Chairman of the Securities and Exchange Commission and replaces the role with an Executive Director that reports to the Board (where authority resides),” Davidson tweeted.

“Former Chairs of the SEC are ineligible,” he added.

Gensler said in an April 14 meeting the proposed rule amendments could benefit investors and markets by bringing certain brokers under additional regulatory scrutiny as well as “modernizing” rules that define an exchange.

Similar amendments were proposed in January 2022. At the time, crypto advocacy groups suggested it was an overreach of the SEC’s authority that could jeopardize participation in the space.

SEC commissioner Hester Peirce — known as “Crypto Mom” for her pro-crypto positions — criticized the new proposed rule amendments in an April 14 statement, declaring “stagnation, centralization, expatriation, and extinction are the watchwords” of the latest move by the SEC.

“Rather than embracing the promise of new technology as we have done in the past, here we propose to embrace stagnation, force centralization, urge expatriation, and welcome extinction of new technology,” Peirce said.

“Accordingly, I dissent,” she added.

According to Peirce, unlike in the past when the SEC embraced new technology, the modern regulator has been expanding its reach to solve problems “that do not exist.”

She further opined the SEC has taken the approach of refusing to alter current regulations to allow room for new technologies and new ways of doing business.

“Today’s Commission tells entrepreneurs trying to do new things in our markets to come in and register,” Peirce said.

“When entrepreneurs find they cannot, the Commission dismisses the possibility of making practical adjustments to our registration framework to help entrepreneurs register, and instead rewards their good faith with an enforcement action.”

Peirce also accused the SEC of using the “notice-and-comment rulemaking process” as a threat.

Related: SEC to up scrutiny of firms offering or giving advice about crypto

According to Peirce, because of the concerns over the ambiguity and scope of the new proposed rule changes and the SEC’s “limited understanding” of the space, a concept release should have been issued instead.

“I wish we had proceeded differently,” Peirce said.

Over the last few years, the SEC has launched more than a few high-profile actions against crypto companies such as Ripple, LBRY and Coinbase over alleged violations.

It has also taken aim at staking and stablecoins, prompting some critics to argue the SEC has been using enforcement actions to develop the law on a case-by-case basis rather than creating clear regulations.

Magazine: Crypto Wendy on trashing the SEC, sexism, and how underdogs can win

Coinbase cut costs and bolstered rep, but profits remain challenged: Analysts

Analysts from Moody’s and JPMorgan hailed the exchange for its strong reputation but said it wouldn’t be enough to solve its profitability woes.

Cryptocurrency exchange Coinbase won’t escape from the profitability challenges it will face from the crypto market downturn, despite having a strong brand and credibility in the crypto market, according to investment analysts.

Credit rating firm Moody’s released a note on Coinbase on Jan. 19 discussing its downgrade of the company’s senior debt and corporate family rating (CFR) — a rating assigned to reflect the opinion of a company’s ability to honor its financial obligations.

Coinbase’s CFR and senior debt were re-graded to B2 and B1, from Ba3 and Ba2, respectively, indicating the firm is “non-investment grade” and “speculative and subject to high credit risk” according to Moody’s.

The firm noted that Coinbase is suffering from “substantially weakened revenue and cash flow generation” due to “challenging conditions,” specifically depressed crypto prices and lower trading activity.

The market conditions saw Coinbase lay off 20% of its employees, around 950 people, on Jan. 10, its second wave of recent major layoffs following its June 18% headcount slash in a bid to cut costs.

Coinbase CEO Brian Armstrong at a conference in 2018. In the most recent round of layoffs, he said the firm needed “the appropriate operational efficiency to weather downturns in the crypto market.” Source: Flickr

However, despite Coinbase’s bid to preserve liquidity, Moody’s still expected “the company’s profitability to remain challenged.”

The bankruptcy of its crypto exchange peer, FTX, is a cause for heightened concern and uncertainty regarding crypto regulation according to Moody’s.

It said a sudden move by regulators in the crypto industry could negatively impact Coinbase’s revenue through increased costs of regulatory compliance.

Moody’s added, however, that increased oversight “could ultimately favor the relatively more mature and compliant crypto-asset platforms such as Coinbase.”

Meanwhile, a separate note from analysts at JPMorgan argued that Coinbase’s credibility and reputation in the industry have strengthened after recent collapses.

“While the crypto-ecosystem has suffered further meaningful credibility issues, Coinbase has emerged with its credibility and brand strengthened — at least relatively.”

The financial firm’s analysts maintained a rating of “neutral” for Coinbase and said the company could even be a “beneficiary of the challenges” other exchanges have faced in the wake of FTX’s collapse.

The upcoming Shanghai hard fork for the Ethereum blockchain could also be a positive for the exchange, according to JPMorgan’s analysts.

Related: Coinbase stops Japan operations amid trading slump

The upgrade “could usher in a new era of staking for Coinbase” with analysts estimating 95% of retail investors on the platform may stake Ethereum post-upgrade, netting Coinbase up to nearly $600 million a year.

On Jan. 6, Coinbase shares hit an all-time low of $31.95 after over a year of constant price declines, according to Yahoo Finance data. The day earlier, veteran investor and ARK Invest CEO Cathie Wood loaded up on $5.7 million worth of Coinbase shares.

Since then the share price of Coinbase and other crypto-related companies have surged.

Coinbase gained 72.6% since the Jan. 6 low and traded at over $55 at the close of market on Jan. 20, where it saw an 11.6% gain on the day.

A record 55,000 Bitcoin, or over $1.1 billion, was just withdrawn from Binance

Some serious withdrawals are occurring on the world’s biggest crypto exchange by volume.

Bitcoin (BTC) has seen record buying activity as BTC/USD returns to six-week highs.

The latest data from on-chain analytics firm CryptoQuant shows more BTC leaving major exchange Binance in a single day than ever before.

Binance finishes the day 55,000 BTC lighter

Despite warnings that a macro bottom may not yet have occurred, Bitcoin investors have wasted no time snapping up BTC above $20,000.

The past two days’ gains delivered a sea change to exchange user behavior, with BTC balances dropping across the board.

As the largest exchange by volume, Binance was of particular interest and saw a net position change of over 55,000 BTC on Oct. 26 — the most ever.

The outflows beat all other buying sprees, including the $17,600 dip in June this year and the March 2020 crash.

Bitcoin exchange netflow (Binance) chart. Source: CryptoQuant

CryptoQuant contributor Binh Dang further noted that derivatives platform outflows were setting multi-month records.

“In 1 year from now, yesterday was the day with the biggest number of coins moved out of the derivatives exchange: 71,579 Bitcoin,” he wrote in one of the firm’s Quicktake posts, noting that internal moves could have made up some of the total.

“That number contributes to bringing the outflow of BTC from derivatives exchanges to 94,024 Bitcoin. This is the most significant number since July. This amount has helped drastically reduce the total reserves on derivatives exchanges after spiking since Bitcoin’s price dropped in May.”

Dang added that such derivatives outflows had once accompanied decreased sell-side pressure on Bitcoin more broadly.

“While there is still a lack of on-chain confirmation of Bitcoin bottoming, looking back at the history of late 2018, we will see the difference,” he concluded.

“In the strongest price declines in the two years before 2020, and 2021, each appearance of a strong downtrend on derivative reserve showed a similar decrease in selling pressure. How about this time?”

Bitcoin derivative exchange netflow chart. Source: CryptoQuant

Gains have “not changed” Bitcoin bear market

Turning to exchanges’ stock of BTC, from Oct. 25 through Oct. 26, the major platforms tracked by CryptoQuant saw around 42,500 BTC in net outflows.

Related: Why is the crypto market up today?

Unlike with Binance, cross-platform position change did not set a global record, with June remaining higher.

Bitcoin exchange netflow chart. Source: CryptoQuant

Summing up, fellow CryptoQuant contributor IT Tech warned that the good times may not last long. The United States Federal Reserve meeting on interest rates could deliver an unwelcome pivot.

“For me it could mean that is some kind of fake pump before FOMC meetings 2.11.2022,” he wrote in a further Quicktake.

“DXY is going down and helped S&P500 and Bitcoin grown up. Be careful because we are still in Bear market and one small pump not changed this.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Capitulation or profit-taking? Bitcoin whale moves 32K BTC dormant since 2018

What is “usually” an OTC transaction signals change is afoot among 2018 bear market buyers, says Whalemap.

Bitcoin (BTC) worth over $600 million moved for the first time since the last bear market on Oct. 18, analysis has revealed.

In a Twitter thread, monitoring resource Whalemap flagged a transaction involving 32,000 BTC.

Buyer could be “willing to acquire” 32,000 BTC at $19,000

In the latest sign that the current spot price is affecting the behavior of even longer-term holders, a whale entity that purchased BTC near the pit of the last bear market appears to have sold.

According to Whalemap, 32,000 coins left their wallet for the first time since December 2018 this week.

“32,000 Bitcoins belonging to a whale wallet moved yesterday. They were dormant since Dec 2018,” the Whalemap team wrote in accompanying commentary.

While it is unknown exactly what was behind the decision, Whalemap was quick to argue an alternative perspective to the classic bear market narrative — major investors capitulating at the lows. The team added:

“Transactions like this usually signify OTC trades, meaning someone is willing to acquire those 32k bitcoins right now.” 

Despite BTC/USD being down over 70% from all-time highs, the 32,000 BTC stash would have made a significant profit, having been purchased at $3,900.

Four years later, they are worth $612 million versus the roughly $124 million paid.

Bitcoin whale outflows annotated chart. Source: Whalemap/ Twitter

Continuing, Whalemap noted that due to the popularity of the 2018 lows as a buy-in point, that price zone represents a significant area of support.

“Not many people know about this but a lot of Bitcoin was accumulated by whales exactly in the region that the above transaction is coming from,” it wrote:

“Even right now, 337k of accumulated BTC is still being HODLed in those wallets. A super important area in BTC land to keep ur [eye] on.”

Bitcoin wall inflows annotated chart. Source: Whalemap/ Twitter

Exchange balances accelerate fall

Signs that even $19,000 is becoming popular as a BTC trading or investment play are coming from exchanges this month.

Related: Here’s what could spark a ‘huge BTC rally’ as Bitcoin clings to $19K

Data from on-chain analytics firm Glassnode shows that over the past few days, major exchanges have seen their BTC balances decreasing more per day relative to the previous month than at any time since mid-July.

The 19 trading platforms tracked by Glassnode were down roughly 100,000 BTC in the past 30 days on both Oct. 18 and Oct. 19.

The last date that exchanges ended the day with more BTC than they started with versus a month prior was Oct. 8.

Bitcoin exchange 30-day net position change chart. Source: Glassnode

Exchanges’ total balance was just over 2.34 million BTC as of Oct. 19, down from 2.46 million at the end of September.

Bitcoin exchange balance chart. Source: Glassnode

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Mt. Gox trustee releases repayment procedures update

The Restriction Reference Period is one of the final steps in repaying creditors, according to the document released Wednesday.

Mt. Gox trustee Nobuaki Kobayashi released updated information on Wednesday regarding the rehabilitation plan for creditors of the long-defunct crypto exchange. According to the file, the restriction reference period starts on September 15. During the phase, “the assignment, transfer or succession, provision as collateral, or disposition by other means of rehabilitation claims are prohibited.”

Kobayashi confirmed that creditors have until September 15 to submit claims regarding funds lost when the early crypto exchange collapsed in 2014:

“During the Assignment, etc. Restriction Reference Period, the Rehabilitation Trustee will cease accepting applications for claim transfer procedures through the Rehabilitation Claim Filing System.”

The document is unclear about the deadline for the restriction period but confirms that it will be followed by the first entire repayment to creditors, as outlined in the Rehabilitation Plan approved by roughly 99% of the eligible users affected by the case.

The file also stated that if a notice of transfer is submitted during the restriction period, the trustee may be unable to determine whom to repay:

“This may result in rehabilitation creditors being unable to receive their preferred Repayments, the Repayment date being delayed significantly compared to other rehabilitation creditors, or at worst, the Repayment amount may be deposited with the Tokyo Legal Affairs Bureau in accordance with laws and regulations.”

Earlier this week, Twitter rumors about a 137,000 BTC dump put pressure on crypto markets. Creditors later dismissed the speculation on social media.

Mt. Gox was one of the earliest cryptocurrency exchanges, and at one time facilitated more than 70% of all trades made within the blockchain ecosystem. Following a major hack in 2011, the site subsequently collapsed in 2014 due to alleged insolvency; the fallout affected about 24,000 creditors and resulted in the loss of 850,000 BTC. In November 2021, the exchange’s trustee confirmed that the rehabilitation plan was in Japan’s court system. It is one of the final steps in a long process that began in 2018 with a petition to compensate creditors.

Huobi gets green light as exchange provider in Australia

Gibraltar-based cryptocurrency exchange Huobi has received the regulatory greenlight to offer its services in Australia.

Crypto exchange Huobi can begin offering cryptocurrency exchange services in Australia after its registration as a digital currency exchange provider with the Australian Transaction Reports and Analysis Centre (AUSTRAC) on Aug. 1. This means Huobi can now offer fiat to cryptocurrency trading services in the country.

Cointelegraph has reached out to Huobi to ascertain whether it will be able to offer full exchange services. The company initially indicated it would focus on providing OTC services after receiving its registration.

The exchange continues to look at broadening its horizons and is also eyeing a move into the American market. Huobi formed an American subsidiary, HBIT, in July 2022. It has received a Money Services Business license, with the company hoping to launch exchange services in the future.

Huobi also scored licenses in New Zealand and the United Arab Emirates in June 2022. Dubai’s Virtual Assets Regulatory Authority (VARA) granted the exchange provisional approval to begin offering its services in the country. Huobi’s local entity will offer a full suite of cryptocurrency exchange products and services, which will operate under a test-adapt-scale model as part of the process of becoming licensed. 

Related: US expansion for Huobi a step closer after it secures a FinCEN license

The company had its struggles in Thailand during the same month, eventually shuttering after failing to comply with Thai Securities and Exchange Commission regulations.

Huobi was forced to relocate to Gibraltar in late 2021 following China’s latest crackdown on cryptocurrency use. The British Overseas Territory has become an attractive location for cryptocurrency businesses and service providers.

USD stablecoin premiums surge in Argentina following economy minister’s resignation

Argentina has been in a long-standing battle against rising inflation and a continued decline of the peso against the U.S. dollar.

Argentina, a country with one of the highest crypto adoption rates in the world, saw the price of United States dollar-pegged stablecoins surge across exchanges on Saturday after the abrupt resignation of its Economy Minister, Martin Guzman. 

The minister’s shock exit, confirmed on his Twitter account on Sunday via a seven-page letter, threatens to further destabilize a struggling economy battling high inflation and a depreciating national currency.

According to data from Criptoya, the cost of buying Tether (USDT) using Argentinian pesos (ARS) is currently 271.4 ARS through the Binance exchange, which is around a 12% premium from before the resignation announcement, and a 116.25% premium compared to the current fiat exchange rate of USD/ARS.

The local crypto price tracking website has also revealed a similar jump in other USD-pegged stablecoins, including Dai (DAI), Binance USD (BUSD), Pax Dollar (USDP) and Dollar on Chain (DOC).

Argentineans have been piling into crypto as a means to hedge against the country’s rising inflation and a continued fall of the Argentinean peso against the USD.

In 2016, before inflation really took its toll, one USD was only able to buy around 14.72 Argentinean pesos. However, six years later, one USD is able to buy as many as 125.5 ARS.

The extra premium on U.S.-dollar pegged stablecoins is the result of a law passed on September 1, 2019, called Decree No. 609/2019, and has made it virtually impossible for Argentinians to exchange more than $200 in greenbacks per month at the official exchange rate.

It was imposed as a means to prevent the Argentinean peso from free-falling amid a struggling economy. In May, the Argentinean annual inflation rate accelerated for the fourth straight month, hitting 60.7%, according to Trading Economics.

Related: Argentina carries out crypto wallet seizures linked to tax delinquents

The South American nation has the sixth-highest adoption rate globally, with around 21% of Argentineans estimated to have used or owned crypto by 2021, according to Statista.

In May, Cointelegraph reported that “crypto penetration” in Argentina had reached 12%, double that of Peru, Mexico, and other countries in the region, primarily driven by citizens seeking safe haven against rising inflation.

In addition to Bitcoin, Argentineans have been turning to stablecoins increasingly as a means of storing value in the United States dollar.