This Week in Coins: Bitcoin and Ethereum Survive CFTCs Binance Crackdown – Decrypt

This week in coins. Illustration by Mitchell Preffer for Decrypt.

The news earlier this week that the Commodity Futures Trading Commission (CFTC) is suing the largest crypto exchange in the world, Binance, and its CEO Changpeng CZ Zhao, could have rocked crypto markets.

Instead, the prices of Bitcoin and Ethereum briefly wobbled after the news broke on Monday, then recovered. Bitcoin (BTC) is up 3% over the past week to $28,410 as of Saturday morning, and Ethereum (ETH) is up 4.2% to $1,825.

Most of the top thirty cryptocurrencies are in the same boat, with no substantial change in either direction over the last seven days, but two names posted hefty rallies: Stellar (XLM) leaped 22% and currently trades at nearly $0.11, while XRP blew up 20% to $0.53 thanks to "investor hope" among the XRP army that Ripple's endless case with the SEC might go Ripple's way.

The CFTC is the United States leading derivatives regulator. According to the lawsuit filed with a Chicago federal court, the federal agency accuses Binance of unauthorized derivatives trading by offering futures, swaps, and options on many leading cryptocurrencies.

The suit claims the exchange is offering these services to U.S. clientele despite not having registered with the regulator. It added: Binance has taken a calculated, phased approach to increase its United States presence despite publicly stating its purported intent to block or restrict customers located in the United States from accessing its platform.

Other allegations in the suit accuse the exchange of having insufficient anti-money laundering (AML) and know-your-customer (KYC) controls, knowingly evading or helping U.S. clients evade regulators, and, rather damningly, trading against its own customers.

For its part, Binance told Decrypt on Monday that the lawsuit is: unexpected and disappointing as we have been working collaboratively with the CFTC for more than two years.

On Wednesday the state of Texas introduced Senate Bill 1751, a bill that seeks to protect the states grid during peak electricity loads, but the proposal could mean that local mining operations may soon lack the incentives that have made the state an attractive location for miners.

The bill restricts Bitcoin miners from participating in a state-run demand response program that rewards miners for giving power back to the grid at peak times.

It also blocks "virtual currency mining from tax abatements given that the large scale of growth in virtual currency mining is already projected to occur in the state, according to the bills sponsor Senator Lois Kolkhorst during Tuesday's testimony, who argued theres no need to subsidize the growth.

That same day U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler testified at the House Appropriations Subcommittee on Financial Services and General Government and said that rules for making crypto compliant already existin response to repeated calls by the industry for clearer guidelinesbut that the industry is still rife with noncompliance.

During the hearing, Gensler stuck to his guns in reiterating his belief that most cryptocurrencies are unlicensed securities: Frankly, of the ten or twelve thousand tokens, there are very few that dont have a group of entrepreneurs in the middle that the public is counting on. Those are securities under the securities law.

Finally, across the pond, the Bank of Englands Central Bank Digital Currency (CBDC) lead Katie Fortune said that CBDCs can be a bridging asset between TradFi and crypto.

CBDCs are an envisioned form of centrally-issued cryptocurrency pegged and backed by the state currency, in this case, a digital sterling.

In a talk at the Citi Digital Money Symposium, she said: What you have today is, I have a Santander account, I can go to a cash machine and take out the same cash my friend with a Barclays account takes out. I think that could be really powerful in a world of stablecoins and other digital forms of money to have a central bank digital currency that can be a bridging asset between all these different forms of money."

Originally posted here:

This Week in Coins: Bitcoin and Ethereum Survive CFTCs Binance Crackdown - Decrypt

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