Crypto News Headlines (13-Feb-2023)

BNB Chain’s native token slid over 7% while Binance USD (BUSD) stablecoins had high inflows to crypto exchanges in the past 24 hours as traders reacted to reports of BUSD issuer Paxos facing legal troubles in the U.S.

BNB tokens traded over $315 on Sunday before dropping to just over $290 in a 24-hour period. The nearly 7% fall marked the biggest drop for a major cryptocurrency as bitcoin (BTC) and ether (ETH) fell slightly below 3%.

BNB-tracked futures saw a relatively low $2.5 million in liquidations, CoinGlass data shows, implying the move was mostly led by spot-driven sales.

Elsewhere, some $52 million worth of BUSD were sent to exchanges in a 24-hour period, data from CryptoQuant shows. As per CryptoQuant, the increase in inflow of any token to exchanges is mostly a bearish sign as it may precede traders selling their tokens.

The crypto market’s steady growth since the start of 2023 was checked by pronounced losses this week. Bitcoin and Ethereum’s price drops managed to stay within single-digit percentages, but not those of several other leading coins, including Avalanche, Solana and Dogecoin.

The week’s downturn appeared to have been driven by U.S. regulators’ intensified scrutiny of the industry, which has been more or less ongoing since the fall of Terra in May last year. This week, popular exchange Kraken came up in the crosshairs of the Security and Exchange Commission (SEC).

Similar to the price cycles experienced by cryptocurrencies, there are fluctuations in the number of U.S. crypto-related lawsuits filed each year, according to new research published by The study notes a 40% increase in crypto lawsuits between 2018 and 2022, but there have been some decreases between the highs. Out of all the years, 2022 saw the highest number of lawsuits in the United States, with a total of 41.

“In 2019, there was a 30% decrease as the number of lawsuits dropped from 30 to 21,” the researchers explain. “This was followed by a dramatic increase of just under 62%, to 34 cases in 2020, before another drop to 28 in 2021. Finally, there was another increase (this time of over 46%) in 2022, with 13 more cases than in 2021.”

The famous author of the best-selling book Rich Dad Poor Dad, Robert Kiyosaki, has repeatedly warned investors, with his latest tweet stating, “giant crash coming. Depression possible” According to the Rich Dad Poor Dad author, this would be fuelled by the fact that the feds will print billions in what Kiyosaki calls “fake money.”

Kiyosaki further believes that by 2025, Bitcoin will hit $500,000, followed by $5000 and $500 price marks for gold and silver, respectively. He explained this would be “because faith in the US dollar, fake money, will be destroyed,” adding that bitcoin is the people’s money and gold and silver are “God’s money.”

The author issued a similar warning on February 10. Kiyosaki tweeted on Friday that everything, including gold, silver, and bitcoin, will plummet, citing that more than 144,000 individuals lost their jobs in the U.S. IT sector in 2022 and 66,000 more were let go in 2023.

Eddy Alexandre, CEO of purported crypto trading platform EminiFX, has pleaded guilty to commodities fraud in a New York district court, agreeing to pay back millions to investors who lost funds to his “cryptocurrency investment scam.”

The United States Department of Justice (DOJ) announced on Feb. 10 that Alexandre submitted a guilty plea to one count of commodities fraud and will pay over $248 million in forfeiture along with restitution yet to be specified.

Alexandre was arrested and charged in May over his role in EminiFX and originally pleaded not guilty, but changed his plea on Feb. 10. He faces a maximum sentence of 10 years in prison.

The correlation between the crypto market and the tech-heavy Nasdaq equity index has turned positive, indicating the digital asset investors’ renewed focus on risk appetite on Wall Street.

The 90-day correlation coefficient between the crypto market’s total capitalization with Nasdaq has risen from -0.12 to 0.74 in four weeks, reaching the highest since early November, according to data sourced from charting platform TradingView.

In other words, the crypto market is again moving in tandem with technology stocks. On days when technology stocks trade higher, cryptocurrencies, including bitcoin (BTC) and ether (ETH), are likely to do the same. Conversely, a decline in technology stocks could drag the crypto market lower.

U.S. crypto exchange Coinbase has launched a defense of its staking services, after the future of the practice was thrown into doubt by the Securities and Exchange Commission’s enforcement action against Kraken last week.

Coinbase CEO Brian Armstrong tweeted on Sunday that the company’s staking services are not securities. “We will happily defend this in court if needed,” Armstrong said.

It comes after the SEC hit rival exchange Kraken with a $30 million fine for offering its staking-as-a-service without registering it. Just before the announcement, Armstrong warned that he had heard rumors of a wider crackdown on staking in the pipeline.

The taxation of crypto assets is not explicitly prescribed by Bosnia’s current legislation but the country’s tax authority has addressed the matter in communication with the finance ministry. The latter is responsible for initiating amendments to the tax regulations.

Cryptocurrencies have seen increasing media coverage in the Balkan nation, the capital city of which is soon going to have its first bitcoin ATM, the FENA news agency noted in a report. On this backdrop, the aspect of taxation has also come to the forefront.

According to the Tax Administration of the Federation of Bosnia and Herzegovina, natural persons — independent entrepreneurs and private citizens — should pay income tax on their capital gains from cryptocurrency transactions, in accordance with relevant provisions of the Income Tax Law.

EU banks would have to place the maximum possible risk weight on crypto assets under a draft law published by the European Parliament on Friday.

The planned rules could determine how the traditional financial sector engages with digital assets. Under the deal, as previously reported by CoinDesk, banks would have to disclose their direct and indirect exposure to crypto, while the European Commission prepares more fine-grained rules for the sector.

“The potentially increasing involvement of [financial] institutions in crypto-assets related activities should be thoroughly reflected in the Union prudential framework, in order to adequately mitigate the risks of these instruments for the institutions’ financial stability,” said an explanatory text by the parliament’s Economic and Monetary Affairs Committee. “This is even more urgent in light of the recent adverse developments in the crypto-assets markets.”

Paxos and Binance USD BUSD tickers down $1.00 being in the sights of United States regulators sparked various reactions from the crypto community.

On Feb. 13, the U.S. Securities and Exchange Commission (SEC) issued a Wells Notice to Paxos, alleging that BUSD is unregistered security. On the same day, the New York Department of Financial Services (NYDFS) also ordered Paxos to halt the issuance of BUSD.

As Paxos faces regulatory scrutiny on several fronts, various members of the crypto community went to Twitter to give their takes on the situation. From disregarding the issue as “FUD” to calling it an attack against the Binance exchange, crypto community members laid down various theories on the allegations that BUSD is an unregistered security.