Crypto News Headlines (16-Jun-2023)

Hopes surrounding a potential U.S. Bitcoin ETF filing by investment giant BlackRock spurred a slight change in market movements early on Friday, fueling a bullish outlook among some traders.

On Thursday, CoinDesk reported that BlackRock planned to offer a Bitcoin ETF with crypto exchange Coinbase serving as custodian. This was confirmed later after a filing showed the company’s iShares fund management unit filed paperwork for the formation of a spot bitcoin (BTC) ETF.

“An estimated 20% of Americans have now owned bitcoin at some point. BlackRock’s proposed ETF potentially offers the other 80% an option that is altogether more familiar and accessible,” said Sui Chung, CEO of CF Benchmarks, in an email to CoinDesk. “BlackRock’s increasing engagement shows Bitcoin continues to be an asset of interest for some of the world’s largest financial institutions.”

In mid-February 2023, Celsius announced it would be acquired by Novawulf Digital Management to execute the reorganization plan. The firm filed its plan on June 15, and as per the latest revisions, customers who possess “altcoins” will have their balances converted to BTC and ETH on July 1. The only accounts exempted from this conversion are the “custody and withhold accounts.”

“Celsius will be selling all altcoins from all customers (except custody and withhold accounts) starting July 1st and will be converting them into bitcoin and ethereum,” the official Twitter account wrote. The coins included in the transition will be CEL, MATIC, ADA, LINK, LTC, DOT, BCH, AAVE, UNI, XLM, SOL, EOS, FIT, SRM, and BNB. Some of these tokens have been classified as securities by the U.S. Securities and Exchange Commission (SEC) in specific lawsuits.

The sale will contribute more than $215 million worth of these tokens to the current selling pressure the market is already experiencing. However, the distribution among 15 different crypto assets will moderate the impact of the sales. The largest sales will involve $70 million of Celsius’s native token, CEL, and around $52 million of MATIC.

The U.S. banking regulator, the Federal Deposit Insurance Corporation (FDIC), has issued a stern warning to cryptocurrency exchange OKCoin over “false and misleading statements” on its website and promotional channels.

In a June 15 letter, the FDIC alleged that the exchange and its senior executives made false representations stating or suggesting that certain crypto-related products were FDIC-insured.

Consequently, the FDIC ordered the San Francisco-based exchange to eliminate misleading statements on its website suggesting that its customers’ accounts are insured by the FDIC.

The lawyers representing the United States Securities and Exchange Commission (SEC) have contended that the additional documents submitted by Dentons, the legal counsel for Terraform and Do Kwon, in support of their motion to dismiss the lawsuit, lack adequate support for dismissing the case.

The SEC’s counsel asserts that the Binance.US transcript and internal SEC emails, presented by the defense, hold no relevance to the current case. They argue that the Howey Test clearly defines the parameters of an “investment contract” and contend that UST should be classified as a security.

In a court hearing on June 15, Dentons submitted supplementary documents to bolster their motion to dismiss the lawsuit filed by the U.S. SEC. The focus of the hearing was to determine if the digital assets developed by Terraform Labs should be classified as securities under the criteria of an “investment contract.”

Crypto lending firm Abra, which once handled more than $116 million in assets, had allegedly committed securities fraud and has been insolvent since March 31, according to Texas regulators.

In a June 15 enforcement action — including an emergency cease and desist order — the Texas State Securities Board accused Abra and its founder William Barhydt of committing securities fraud as well as engaging in deception regarding the sale of investment products through its affiliates Abra Earn and Abra Boost.

“The alleged misconduct includes the intentional concealment of financial information reflecting the capitalization of parties, defaults on loans, and the transfer of assets to Binance,” the regulator said.

OKCoin must scrub misleading statements that suggest its customers’ accounts are protected by the U.S. Federal Deposit Insurance Corp. (FDIC), the U.S. banking regulator ordered late Thursday, complaining the company is making false claims.

The FDIC has demanded OKCoin USA Inc., the San Francisco-based sister exchange to OKX, remove any offending claims from its site immediately or face a possible enforcement action for violating U.S. banking law, the FDIC said in its letter to CEO Hong Fang. It’s the latest of several such warnings to crypto firms from the banking watchdog.

“OKCoin is not FDIC-insured and the FDIC does not insure non-deposit products,” the agency said in its cease-and-desist demand. “By not distinguishing between U.S.-dollar deposits and crypto assets, the statements imply FDIC insurance coverage applies to all customer funds (including crypto assets).”

Polygon (MATIC) was a notable mover on Thursday, as the price slipped by as much as 9%, nearing a multi-month low in the process.

MATIC/USD fell to a floor of $0.5951 earlier in today’s session, after trading at a high of $0.6598 on Wednesday.

As a result of this drop in price, polygon moved closer to Saturday’s bottom at $0.5059, which was its lowest point since last July.

From the chart, today’s drop saw the token move below a floor at $0.6000, just as the relative strength index (RSI) found one of its own at the 21.00 mark.

Currently, price strength is tracking at 22.19, which is still significantly oversold, and could potentially prompt long-term bulls to buy the dip.

Aged just 26, Owen Simonin, better known by his pseudonym Hasheur, has hosted the most popular French YouTube channel on blockchain-related subjects for eight years, with more than 624,000 subscribers. In France, countless individuals have been introduced to crypto through his video tutorials.

Simonin told Decrypt that France, and Europe, have a significant role to play in the global crypto market—particularly as U.S. regulators have cracked down on the industry in recent weeks.

The U.S. approach is “killing crypto,” he said, adding that it represents the most significant emerging global business and that stifling it is self-destructive. The U.S. crackdown, he added, could allow Europe and Asia “to capture a lot of volume for a while.”

New York Attorney General Letitia James on Thursday announced a settlement with CoinEx (CRYPTO: CET), a Hong Kong-based virtual currency trading platform the state sued earlier this year for failing to register.

As part of the agreement, CoinEx must refund nearly 5,000 New York investors a total of $1.2 million and pay more than $600,000 in penalties. The company is banned from offering securities and commodities in New York and prohibited from making its platform available in the state.

“Unregistered crypto platforms pose a risk to investors, consumers, and the broader economy,” James said in a statement. “Today’s agreement should serve as a warning to crypto companies that there are hefty consequences for ignoring New York’s laws. My office will continue to crack down on crypto companies that brazenly disregard the law, mislead investors, and put New Yorkers at risk.”

Hong Kong-based crypto exchange CoinEx has been banned from operating in New York by Attorney General Letitia James. According to an announcement on June 15, over $1.7 million worth of the exchange’s funds were seized for CoinEx allegedly failing to register as a securities and commodities brokerage.

The agreement resolves a previous lawsuit against CoinEx from February, when the New York attorney general accused it of falsely representing itself as an exchange and failing to register with local authorities.

“As part of today’s consent order, CoinEx is banned from offering, selling or purchasing securities and commodities in New York and is prohibited from making its platform available in the state,” reads the announcement.

As per the agreement, over $1.1 million will be returned to 4,691 New York investors, and more than $600,000 will be paid in penalties to the state.