Data from CryptoCompare shows that the price of the flagship cryptocurrency Bitcoin (BTC) started the week with a drop from around $26,000 to a low just above $25,000, before the cryptocurrency started recovering. At the time of writing, BTC is changing hands at $26,400.
Ethereum’s Ether, the second-largest digital currency by market capitalization, started the week moving sideways before enduring a dip from $1,750 to $1,650 amid a wider crypto market rout. ETH has since recovered to now trade at $1,725.
Headlines in the cryptocurrency space last week largely followed new developments on the U.S. Securities and Exchange Commission’s (SEC) lawsuits against Binance and Coinbase, which were filed earlier this month.
The week saw Binance.US escape a temporary asset freeze requested by the SEC, with Judge Amy Berman Jackson first authorizing Binance.US to continue operations, before signing a deal between the Sec, Binance.US, and Binance to implement steps to ensure only U.S.-based personnel of Binance.US can access customer funds while the case is active.
As Binance deals with the lawsuit, it lodged an application to cancel its registration in Cyprus. Its local subsidiary is deregistering as Binance focuses on the Markets in Crypto Assets (MiCA) regulations slated to be enforced within the next 18 months.
The focus, a Binance spokesperson explained, would now shift to advancing their reach in prominent European markets where the firm has already established a robust presence, such as France, Italy, and Spain.
The SEC’s lawsuit against Binance has seen liquidity on BTC/USD pairs on both Binance and Binance.US witness significant corrections, with CCData showing that the decline was of 85% on Binance.US and 65.6% on Binance.
Meanwhile, the SEC has requested an additional four months to prepare a response to Coinbase’s appeal for regulatory clarity for cryptocurrencies, following a June 6 court order asking the SEC to specify whether it was rejecting the rulemaking requested or if it required more time to articulate a response.
The SEC’s lawsuits have seen commission-free trading platform Robinhood announce that it will delist a number of assets from its platform after these were deemed unregistered securities by the Commission. These assets include Cardano’s ADA, Polygon’s MATIC, and Solana’s SOL.
Similarly, eToro US has announced customers will no longer be able to open new positions in Algorand (ALGO), Decentraland (MANA), Dash (DASH), and Polygon (MATIC). However, customers can continue to hold and sell existing positions in these coins.
The company also responded to inquiries about the potential comeback of XRP on its platform, saying that they are monitoring the regulatory landscape and will inform users of any changes.
The lawsuits have seen cryptocurrency-friendly Republican lawmakers draft a bill meant to reform the SEC and unseat its Chair Gary Gensler. The success of the initiative hinges on bipartisan support for it to pass through the U.S. Senate.
Bitcoin supply on exchanges plummets
Over the week blockchain data has revealed that the quantity of Bitcoin held on cryptocurrency exchanges has plummeted to its lowest since February 2018. The SEC’s lawsuits against Binance and Coinbase led to a sharp drop of 6.4%.
The data further indicates a downward trend in Bitcoin supplies on exchanges since 2020, a period when these supplies experienced a surge due to a sudden market sell-off in response to the COVID-19 pandemic.
These figures suggest a growing inclination among traders and investors to move their Bitcoin holdings off exchanges and opt for self-custody. Cryptocurrency exchange failures have been common in the industry, with FTX’s collapse recently highlighting the importance of self-custody.
This week saw the U.S. Department of Justice (DOJ) accuse two Russian nationals, Alexey Bilyuchenko and Aleksandr Verner, of being behind the notorious 2011 hack of the now-defunct cryptocurrency exchange Mt. Gox.
The Russian nationals were also accused of laundering the pilfered bitcoin and operating an illegal cryptocurrency exchange. The DOJ claims that Bilyuchenko, Verner, and unidentified collaborators allegedly breached the server hosting the cryptocurrency wallets of Mt. Gox back in September 2011, and took advantage of it for three years.
BlackRock’s iShares submits application for Bitcoin spot ETF
The week ended with BlackRock’s iShares division taking the initiative to apply for the establishment of a Bitcoin exchange-traded fund (ETF). The prospective iShares Bitcoin Trust will predominantly comprise Bitcoin held in custody on behalf of the Trust, with the filing naming Coinbase as the custodian.
While the SEC has greenlit several Bitcoin ETFs based on futures, it has consistently thwarted attempts to introduce a spot Bitcoin ETF from fund managers such as Grayscale, VanEck, and WisdomTree.
Yet, BlackRock’s considerable influence as the globe’s largest asset manager, with more than $10 trillion in assets under management (AUM), might present a significant challenge for the SEC to ignore.
Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies.
Featured image via Unsplash.