Coinbase

CFTC shift attention to Binance with lawsuit

Josh Barter on September 25, 2023

CFTC — The cryptocurrency sector in the United States is in disarray, with entrepreneurs clashing with regulators.

Crypto enthusiasts in the United States, for example, are not allowed to trade cryptocurrency derivatives.

To further aggravate the situation, major overseas trading platforms for crypto futures do not allow Americans to trade the products.

Only if they are registered with the Commodities Futures Trading Commission (CFTC), a formidable federal regulator, may they do so.

The CFTC has filed a lawsuit against Binance, the world’s most well-known cryptocurrency exchange, for trading without first registering with the agency.

Binance apparently contemplated bailing out rival exchange FTX in November 2022.

Yet, Binance withdrew after closely monitoring the exchange platform, preventing a big federal fraud investigation on FTX.

What happened?

Binance and its CEO, Changpeng Zhao, were accused by the CFTC with breaking US laws.

Among the alleged violations is privately advising “VIP” clients in the United States on how to dodge compliance rules.

In addition, the commission regulates derivatives trading in the United States.

According to the CFTC, Binance and Zhao urged employees and customers to avoid compliance protections in order to increase corporate profits.

The CFTC does not have the ability to pursue criminal charges.

But, the regulator has the authority to levy substantial fines, which might preclude Binance from registering in the US in the future.

The potential ban might be disastrous for the company, given the United States is home to hundreds, if not millions, of cryptocurrency enthusiasts.

The response

As the news of the lawsuit came, Binance noted that it was unexpected and disappointing.

The company stressed that it has spent a significant amount of money in the previous two years to ensure that US-based investors are not active on the platform.

Zhao tweeted the number 4 after the lawsuit was announced on Monday, referring to a previous statement he made:

“Ignore FUD, fake news, attacks, etc.”

FUD is an acronym that stands for “fear, uncertainty, and doubt” in the crypto world.

Binance has long claimed that it is not subject to American legislation since it does not have a physical presence in the country.

Despite its location in China, the crypto trading platform lacks a physical headquarters.

Changpeng Zhao believes that the headquarters of the corporation are wherever he is.

Binance’s technique, according to the CFTC’s complaint, was a willful attempt to avoid regulation.

The bigger picture

The CFTC action is a setback for Binance, but it has far-reaching repercussions for the cryptocurrency sector.

But, the case is not as important as everything else that happened in 2022.

For example, the FTX bankruptcy triggered a chain reaction throughout the crypto sector, causing firms and projects exposed to the corporation to either freeze or shut down.

Terra/Luna also had a collapse, resulting in a drop in the value of crypto assets and NFTs.

Yet, significant progress has been made on the Terra/Luna issue in 2023.

Prices for the two major cryptocurrencies, Bitcoin and Ethereum, fell by more than 3% on Monday, a regular day for cryptocurrency trading.

Worst-kept secret

The CFTC’s lawsuit is remarkable for naming one of its worst-kept Bitcoin secrets.

Consumers in the United States have incredibly simple access to potentially dangerous offshore crypto derivatives, which should be prohibited.

Because crypto derivatives are leveraged bets on very volatile assets, they are accessible to anybody with a VPN.

While this method is straightforward, it is strongly discouraged.

The endgame

The most likely outcome, according to Blockchain Intelligence Group crypto compliance and regulation specialist Timothy Cradle, is that Binance will pay hundreds of millions of dollars in fines to the CFTC.

Furthermore, the company would be prevented from registering derivatives exchanges.

The move would not only be disastrous for American customers, but it would also have a significant impact on Binance’s revenues.

According to the lawsuit, US consumers account for 16% of the revenue generated by Binance’s derivatives products.

Other regulators

The revelation on Monday only adds to the regulatory pressure on one of cryptocurrency’s most well-known characters.

According to Bloomberg, the US Tax Administration and the Securities and Exchange Commission are also investigating Binance.

This week, the SEC issued a Wells Notice to Coinbase, one of the top US-listed crypto exchanges, for possible securities law violations.

Silvergate and Signature Bank, two major connections to the traditional banking sector, were lost to the crypto industry in early March.

Coinbase earns a little favor in case with judge’s insight

Clara Emily on September 25, 2023

Coinbase — In a stunning turn of events, the judge in the Coinbase case seemed to indicate that she could be in favor of the crypto exchange. Recently, the judge overseeing the high-stakes legal battle with the Securities and Exchange Commission grilled the agency’s counsel, asking questions about how Coinbase was given the green light to go public.

According to court documents during a pre-motion hearing on Thursday, US District Judge Katherine Polka Faila delved into whether any significance should be given to the SEC’s lack of concerns after Coinbase filed its S-1.

The S-1

Before an Initial Public Offering (IPO), companies are required to file an S-1. By doing so, the firm’s shares would then become publicly available to investors. Coinbase went public on the Nasdaq in April 2021 following a clearance on its S-1 form, which was deemed effective. However, two years later, the SEC is suing Coinbase on the basis that its business is running afoul of securities law.

While Judge Falia acknowledged that she might have been reading too much into the S-1 issuance, in the case for Coinbase, the filing could hold some significance.

“It’s not crazy in the Faila parlance for Coinbase to think that what they were doing was okay because it was exactly what you let them do when they issued the S-1.”

Meanwhile, the SEC counsel countered, saying that Judge Faila’s focus on the S-1 is misplaced. They also noted that the filing had little to do with the legality or agency’s support of Coinbase’s business, saying:

“Simply because the SEC allows a company to go public does not mean that the SEC is blessing the underlying business, or the underlying business structure, or saying that the underlying business structure is not in violation of the law.”

Furthermore, the SEC counsel pointed out that no evidence was put forth in the case that indicated the agency looked at specific assets being listed on the exchange nor did it give Coinbase comfort that “this would not later be found to be a security.”

Insight

Coinbase’s S-1 was among the topics that were raised during the first hearing of the case, which included “major questions doctrine” and the Howey test. Regardless, Faila’s comments showed some insight into her initial thoughts as the case unraveled.

According to Judge Faila, the SEC’s stance toward the S-1 warrants some skepticism. Additionally, in her view, Coinbase could have been warned that there might be a problem in the future with its business.

“I am not saying that the commission should be omniscient at the time it’s evaluating a registration statement and that it should know all things,” Faila explained. “But I would have thought the commission was doing diligence into what Coinbase was doing.”

Steven Peikin, a member of the legal counsel for Coinbase and previous co-director of the SEC enforcement division, offered some insight on Coinbase’s S-1 toward the end of the hearing. He referred to the SEC’s decision not to review registration statements for companies the agency was previously concerned about. Peiken also acknowledged Judge Faila’s skepticism about the SEC’s stance, urging the jury that it was an instinct worth listening to.

“You reflected some discomfort with the idea that the commission could authorize Coinbase’s S-1 and allow it to become public, and your gut suggested to you that there seems to be something wrong with the idea that that’s of no legal import,” he said.

“To the extent that you have some core discomfort with the idea that this counts for nothing, we think your instinct is correct.”

How it started with Coinbase suit

The Coinbase case started in early June when the SEC sued the platform for acting as an unregistered broker. The complaint came 24 hours after a similar case was filed against Binance.

According to the SEC, Coinbase’s failure to register deprived investors of protections.

“Since at least 2019, Coinbase has made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities,” the SEC wrote in its press release.

“Coinbase intertwines the traditional services of an exchange, broker, and clearing agency without having registered any of those functions with the Commission as required by law.”

Brian Armstrong, the CEO of Coinbase, later said the company is proud to represent the industry in court to gain more clarity about crypto rules. However, he also pushed back against the SEC, saying they approved the platform’s business when the company went public in 2021.

Crypto overlooked by regulators, they didn’t expect it to last

Clara Emily on April 10, 2023

Crypto — While cryptocurrencies have been on the market for more than a decade, there has only been limited regulatory activity in recent years.

Several nations and areas have already made strides, but it takes time for the United States to catch up.

Regulatory action is already sprouting up all over the world as officials are finally paying attention to the crypto sector.

A late arrival

Nicole Sandler, the head of digital policy at Barclays, recently appeared on a panel at the Citi Digital Money Conference in London.

She spoke on cryptocurrency regulations in Europe, the United Kingdom, and the United States.

Sandler stated that politicians’ plainly late arrival had been planned all along.

“I think one thing certain policymakers have said is that they left this market to do what it wanted to do because they thought it would essentially die,” she explained.

“And it hasn’t died, it’s grown, it’s grown, it’s grown.”

Experience

Nicole Sandler selected a few pages from her 2016 experience.

She met with the European Commission to explore a legal framework for digital assets.

Sandler maintained that the crypto sector was in its infancy at the moment, but he acknowledged its current expansion.

She also stressed that the emergence of cryptocurrencies was not the reason authorities disregarded it until recently.

“It wasn’t that it was nascent and they wouldn’t regulate it,” Sandler offered.

“It was a choice to see where the market went.”

“And now they know that they have to regulate it. But the problem is, regulation takes a long time from start to finish.”

The latest regulatory crackdown has sent shockwaves across the United States, where the situation is tense.

The FTX effect

Sam Bankman-Fried, the once-golden-boy of crypto, saw his crypto empire implode in November when exchange platform FTX went bankrupt.

FTX declared Chapter 11 bankruptcy, causing sister trading business Alameda Research, American subsidiary FTX.US, and other associated entities to follow suit.

SBF resigned as CEO as a result of the collapse.

The Securities and Exchange Commission acted decisively.

Following several delays, the SEC accused Sam Bankman-Fried, issuing a statement in November:

“The Securities Exchange Commission… charged Sam Bankman-Fried with orchestrating a scheme to defraud equity investors in FTX Trading LTD.”

They claimed they breached the Securities Exchange Acts of 1933 and 1934’s anti-fraud provisions.

It didn’t take long for the chips to fall, as key firm officials, including co-founder Gary Wang, Alameda CEO Caroline Ellison, and co-lead engineer Nishad Singh, were subsequently arrested.

Singh pled guilty to criminal charges early this month.

He was convicted of mismanagement at FTX as well as other offenses, including:

Wire fraud
Conspiracy to commit wire fraud
Money laundering
Conspiracy to defraud the US government through the violation of campaign finance laws

Meanwhile, Sam Bankman-Fried has pled not guilty to criminal charges stemming from his negligent administration of FTX.

Despite FTX’s dramatic demise, Nicole Sandler claimed that it had nothing to do with technology.

While rules may have been of assistance, she emphasized that the company’s demise could be attributed to a “bad actor.”

Sandler further pointed out that the firm’s terms and conditions did not state that they may take customer assets and utilize them for personal gain.

A witch-hunt

Other crypto businesses have also been prosecuted by the SEC, although for different reasons.

The SEC recently issued a Wells Notice to Coinbase, informing the California-based exchange that it will seek enforcement action against the business.

The letter also claimed that Coinbase’s staking products were unregistered securities.

According to a source, the company’s management are angry that the SEC allowed US investors to participate in cryptocurrency for years before unexpectedly yanking the rug out from under them.

As a result, the cryptocurrency community has been vociferous about the topic, slamming the SEC chair.

“People don’t like Gary Gensler, who’s the chair of the SEC, in the crypto space,” said Digital Economy Initiative director Ijeoma Okoli.

“But if people think back to about ten years ago, in the aftermath of the financial crisis, when the same man was the chair of the CFTC, the vast majority of the derivatives sector – the global derivatives sector – hated him.”

“So it’s not that he’s picking on crypto, this is just his MO.”

SEC grilled by crypto executives over lack of clarity

Vina Grady on April 3, 2023

SEC – After recent developments in the crypto space, various executives from crypto companies have expressed their displeasure with the US government.

Numerous people have criticized them for not comprehending the industry’s laws.

Now, the Securities and Exchange Commission is a major target of the crypto community’s rage due to its active anti-crypto business actions.

US & crypto

While other countries are warming to Bitcoin, the United States is behind.

The government has failed to pass a comprehensive set of laws that would allow bitcoin and blockchain businesses to operate without fear of being targeted by authorities.

The US Securities and Exchange Commission (SEC) has taken it upon itself to expand legal actions against corporations following the collapse of cryptocurrency exchange FTX in 2022.

The clash

On Wednesday, the SEC sent a Wells notice to Coinbase, one of the biggest bitcoin exchanges.

After detecting possible violations of US securities law, it issued a warning to the business.

Moreover, the SEC accused Justin Sun, a crypto entrepreneur, with fraud and unregistered securities against celebrities who advocated the digital currency he was supporting.

The SEC is now engaged in a legal battle with many other cryptocurrency businesses, including Gemini, Genesis, and Ripple.

Reception

“It feels uncollaborative,” said an anonymous crypto executive over the Paris Blockchain Week event.

“It’s very frustrating for players that have been doing right the whole time.”

However, Joe Lubin, CEO of ConsenSys and co-founder of Ethereum, has expressed concern about the ecosystem.

“I think we’re sort of continuing to watch the SEC play this game of punishing the people that are still surviving,” said Blockchain.com president Nicolas Cary.

“And it’s a little bit, you know, sort of frustrating thing to observe.”

The majority of the SEC’s operations include imposing modern limitations on the crypto industry decades after the Howey Test.

The Howey Test is used to determine whether or not something is secure.

Yet, many in the crypto industry think that this is not the best way to go.

“Where I think you have less successful regulatory regimes is when you try to analyze crypto through the lens of traditional finance,” said Oliver Linch, the CEO of Bittrex Global.

“You say, ‘Well, is it a bit like a security? Is it a commodity?’ No, it’s kind of none of those things. It’s crypto.”

Clarity & sympathy

The Paris Blockchain Week is one of Europe’s most well-known crypto events, and the SEC’s activities were one of the most contentious topics among attendees.

Several executives sought clarity from US regulators.

“We’d love to have a little more clarity in regulation,” said Silvio Micali, the founder of blockchain company Algorand.

Some, on the contrary, were more supportive of the SEC.

They said that the watchdog is adhering to the regulations as they are and that the US government has the ability to change them.

“What are they supposed to do? If all you’re given is a hammer, the whole world looks like a nail,” said Linch.

Cary, on the other hand, claimed that the SEC is merely doing its duty to protect customers.

The SEC

SEC Chair Gary Gensler addressed the problems in a column published on The Hill this month, arguing that the agency was clear on the legislation.

“I find the talking point that there’s a lack of clarity in the securities laws unpersuasive,” he said.

“Some crypto companies might message that the laws are unclearer rather than admitting that their platforms don’t have sufficient investor protection.”

Gensler also cited examples of crypto companies that are subject to regular securities regulations, such as when they provide lending products.

He also noted that crypto intermediaries are not lining up to register with the SEC and comply with Congress’ laws.

Furthermore, the SEC chair emphasized that enforcement procedures are yet another weapon in the regulator’s toolbox for weeding out noncompliance.

Falling behind

CEOs expressed concern that the United States’ lack of effective regulation might force it to fall behind other countries and jurisdictions.

“It’s incumbent, I think, on Congress to actually create a legal regulatory framework that regulates crypto properly, because… crypto is here to stay,” said Linch.

Governments worldwide are debating how to regulate bitcoin.

Both Dubai and Switzerland have identified themselves as crypto-friendly nations with favorable regulatory environments.

Meanwhile, the European Union intends to put the Markets in Crypto-Assets Regulation, or MiCA, into effect in 2023.

Its goal is to implement restrictions on and around digital currency businesses.

Monica Long, the president of Ripple, is concerned that the United States may fall behind other jurisdictions in the crypto economy.

“Europe is really emerging as a leader in terms of setting really clear regulations and rules that allow crypto companies and also traditional finance to embrace crypto,” said Long.

Coinbase takes steps to evolve with Web3

Clara Emily on April 3, 2023

Coinbase – The beauty of Web3 is that, like technology, it is always growing, and those working in the sector recognize that they have yet to realize its full potential.

To take advantage of Web3, developers may use a variety of tools and services.

Coinbase is seeking to attract new customers and acquaint existing ones with its new Base roll-out in order to generate more income.

The business believes it can accomplish so by developing a variety of innovative on-chain products and services.

The news

Coinbase was launched in 2012 as a basic market for buying and selling Bitcoin.

Much has changed since then, and the decade-old business is eager to remain relevant and up to date.

Coinbase announced the release of Base, its native layer-2 scaling solution, in February.

Base is designed with the OP Stack, which incorporates a significant amount of Optimism technology.

The platform’s choice to construct Base is especially intriguing for a highly centralized, highly regulated, publicly listed firm headquartered in the United States.

OP Stack

The OP Stack is an open-source collection of tools that enables anybody to build their own rollup chain, from fully-centralized crypto ventures to Nasdaq-listed enterprises.

Rollups are components of scaling solutions that group transactions over many networks before condensing them into a single transaction and executing it on the Ethereum mainnet.

It allows the mainnet to stay low-cost while yet working quickly for other initiatives.

Furthermore, the OP Stack is configurable and modular, recalling users of the phrase “appchain,” where everything – from the data later to the consensus method – can be totally altered according to the project’s demands.

The arrangement

Coinbase will be the sole “sequencer” for layer-2, according to their agreement.

A sequence node is a node or group of nodes on the mainnet that conducts batched transactions.

The Optimism sequencer is a substantial money producer for the Optimism foundation.

Optimism earns a portion of the profit for each transaction executed and executed on the mainnet.

It is strongly advised to include activities on the roll-up due to its nature.

Coinbase is likewise considering the same kind of action.

On-chain native

Jesse Pollak, Coinbase Protocols Lead, stated at ETH Denver last week that the choice to become ‘on-chain native.’ is part of a larger goal.

He discussed the company’s innovation approach as well as ambitions to rapidly iterate on projects such as Coinbase NFT and the layer-2 blockchain Base.

“Coinbase, recently, with things likeUSDC, Coinbase Wallet, cbETh, and our dApp Wallet, has started to build what we call ‘on-chain native’ products,” said Pollak.

“It’s still a very small percentage of our overall portfolio.”

Base is part of a modest but steadily expanding toolset.

However, Coinbase’s cbETH asset is another evidence of the company’s transition to an on-chain strategy.

The asset is also known as a liquid staking derivative (LSD), and it is a staked form of Ethereum.

Those that stake their Ethereum with Coinbase receive cbETH in exchange.

These, like other LSDs, can be reused in the DeFi space.

More than $29.5 million in cbETH is presently generating interest using the open source protocol Aave.

White-label solution

Coinbase launched a white-label wallet service for companies looking to establish a crypto wallet on Wednesday.

The objective, according to the business, is to make wallet creation as simple as creating a username and password in order to avoid the technical nature of conventional digital wallets.

“It’s basically eliminating this huge source of friction for getting Web3 adopted,” said Patrick McGregor of Coinbase.

“Effectively, we’ve created a system to give wallets to literally every human on the planet.”

McGregor intimated that other “well-known people” will shortly enter the fray.

However, the Coinbase-native layer-2 solution and on-chain goods provide clarification on a number of aspects.

By creating additional on-chain products for Coinbase consumers, the business is prepping a large audience to migrate their activities away from the exchange.

But, the fees do not inevitably drain the company’s coffers.

SEC fired up the crypto community after Coinbase notice

Stephen Reynolds on March 23, 2023

SEC – US authorities have started cracking down on the crypto area, which has had a significant impact on the community.

The SEC sent a warning to Coinbase on Wednesday, saying that the company’s staking products are unregistered securities.

Parts of the Coinbase exchange and Coinbase Wallet were also discussed.

The SEC’s moves against Coinbase have sparked outrage in the cryptocurrency world.

As a result, concerns have arisen concerning the implications of the situation for bitcoin in the United States.

According to reports, Coinbase executives are dissatisfied with how the SEC enabled US investors to participate in cryptocurrency for years before abruptly pulling the rug out from under them.

For months, Coinbase allegedly engaged in regulatory and policy discussions with the SEC.

They began immediately after petitioning the SEC in July, asking the authorities to initiate a public rulemaking process to define what would be constituted securities.

Coinbase sent a letter to the SEC on Monday to clarify the rules governing staking.

The SEC subsequently informed the corporation that it would take enforcement action against it.

Coinbase CEO Brian Armstrong discussed how the SEC permitted the business to go public on the Nasdaq in a Twitter thread.

Coinbase informed customers earlier on Wednesday that Algorand staking incentives will be suspended on March 29.

In that afternoon, Paul Grewal wrote a blog post claiming that the Wells Notice did not offer information to which they could reply.

Reaction

Caitlin Long, the founder and CEO of Custodia Bank, shared her thoughts on Twitter, writing:

“It should be crystal clear by now that the Biden Administration wants all crypto – even the legit parts of it – run out by the US.”

“See also yesterday’s White House economic report, which dunked on all financial innovation while espousing the “stability” of traditional banks.”

Long and others questioned the SEC’s unexpected issuance of a “Wells Notice.”

For years, they permitted Coinbase, a publicly listed firm, to provide staking incentives, but have just recently threatened to sue the company, saying they issued unregistered securities.

“Over the past 9 months, [Coinbase] has met with the SEC more than 30 times, sharing details of our business to build a path to registration,” wrote Coinbase Chief Legal Officer Paul Grewal.

“During this time, the SEC hasn’t given basically 0 feedback on what to change, or how to register. Instead, today we received a Wells Notice.”

Chris Dixon, general partner at Andreessen Horowitz, chipped in, saying:

“Since day one, @coinbase has invested heavily in being fully compliant with US laws even when it forced them to move slower or lose a competitive edge vs other exchanges that chose to take shortcuts.”

“The US has a strong history of fostering innovation, and regulators have played a key role by establishing clear rules and pursuing bad actors,” he continued.

“We hope the US will take a more constructive approach to collaborating with innovators while protecting consumers.”

Support & criticism

Numerous members of the cryptocurrency community have shown their support for Coinbase, saying they stand with the firm and Adam Cochran, the founder of Cinnemhain Ventures (CEHV).

Although others criticized the SEC, some members of the cryptocurrency community used the occasion to bash Coinbase.

The most outspoken complaints came from the XRP community, many of whom were still irritated by Coinbase’s removal of XRP from the Coinbase Wallet last fall.

Nevertheless, Ripple Labs has been fighting the SEC in court since December 2020.

The corporation was accused of deceiving investors and raising $1.3 billion in unregistered securities, according to the agency.

“I doubt I will ever understand how the SEC can sign off on @coinbase being publicly listed then raise all these issues afterwards,” said attorney Bill Morgan.

“Forget just crypto, how is the SEC protecting shareholders of Coinbase with this dreadful conduct?”

Crypto ads not as prominent in 2023 Super Bowl

Hector Andrews on February 7, 2023

Crypto ad – When numerous cryptocurrency firms ran advertisements before the NFL’s championship game in 2022, it became customary.

The Super Bowl LVII is shaping up to be an exciting opportunity for the digital asset sector.

2022

A number of crypto ads from some of the biggest companies were seen during the Los Angeles Rams vs. Cincinnati Bengals game from the previous season on the popular televised game, including:

Coinbase
Crypto.com
FTX (before its collapse)

With an advertisement portraying a trader taking off into the skies after joining up for the site, Etero joined the frenzy and established itself as a top venue for trading stocks and cryptocurrencies.

Meanwhile, a Budweiser ad that appeared to be promoting cryptocurrency also was.

By depicting the project’s famous glasses over a classical painting portrait, it paid tribute to the Nouns DAO NFT collection.

While this was going on, other businesses burned through millions of dollars on the crypto ads in an effort to build a name for themselves.

Over 112 million people watched the game last year, according to the NFL.

Giveaways

FTX and Coinbase were two of the businesses that ran crypto ads and gave away Bitcoin.

The Curb Your Enthusiasm actor Larry David was the subject of the FTX commercial, which ended with the comic being disdainful of the project’s app.

Layoffs

FTX did not reduce employees prior to their demise, but Coinbase and Crypto.com did so once the Terra ecosystem collapsed in the summer of 2022.

In the end, layoffs became a pattern in the cryptocurrency sector, lasting into this year.

The CEO of cryptocurrency exchange Binance, Changpeng Zhao, stated specifically that he will forgo crypto ads for the Super Bowl.

In June, he said, Binance is still hiring.

“It was not easy saying no to Super bowl [SIC] ads, stadium naming rights, large sponsor deals a few months ago, but we did,” Zhao tweeted.

“Today, we are hiring for 2000 open positions.”

A smaller showing

Since Bitcoin sold for almost $42,000 during the previous Super Bowl, the price of cryptocurrencies has significantly decreased.

Despite the shifting market, a number of businesses will support cryptocurrencies on Sunday when the Philadelphia Eagles play the Kansas City Chiefs.

The first commercial break of the game will include a crypto ad from Limit Break, a Web3 startup.

The business intends to distribute thousands of its Dragon series NFTs as part of a promotion for its free-to-own NFT gaming concept.

One of the most distinctive ads will be the one on cryptocurrency.

It is an interactive commercial that uses a QR code to expose the DigiDaigaku universe to the audience.

Limit Break’s crypto ad will follow in Coibase’s footsteps by using a bouncing QR code, similar to the classic bouncing DVD logos, to guide viewers to its website in a 2022 advertisement.

The website failed as a result of all the traffic, thus last year’s advertisement was a bit of a miss.

Other ads

Bitbuy, a cryptocurrency exchange, is one of the recurring Super Bowl ad ventures.

With a few modifications, Bitbuy will run a crypto ad in Canada for the second time.

The firm is adjusting its strategy this time around because lost chances were its main emphasis the previous year.

Bitbuy will center their 2023 crypto ad around the idea of trust.

The forthcoming commercial will be twice as long, clocking in at a full minute.

In place of Kyle Lowry, the most recent Rookie of the Year in the NBA, Scottie Barnes will appear in the Bitbuy advertisement.

Turbotax first mentioned cryptocurrencies in its ad in 2022, and it will do it once again this year.

For the upcoming ad, Jason Sudeikis will make a brief appearance.

Representation

The 2019 Super Bowl won’t have any representation for cryptocurrency firms, according to Mark Evans, vice president of ad sales at Fox Sports.

Despite being focused on blockchain technology, a Limit Break spokesperson claimed that the company’s marketing fell under the gaming category.

Coinbase joins slew of companies laying off workers

Josh Barter on January 11, 2023

Coinbase: Considering all the cutbacks in the technology industry, Coinbase will reduce 1/5th of its personnel.

The strategy aims to protect money as the crypto market deteriorates further.

The news

According to a blog post posted on Tuesday morning, the crypto company plans to lay off 950 employees.

After an 18% staff reduction in June, Coinbase had over 4,700 employees by the end of September.

The company attributed the layoffs to cost-cutting efforts and rapid expansion amid the bull market.

“With perfect hindsight, looking back, we should have done more,” said Coinbase CEO Brian Armstrong.

“The best you can do is react quickly once information becomes available, and that’s what we’re doing in this case.”

Endgame

According to Coinbase, the decision would incur additional costs in the first quarter ranging from $149 to $163 million.

For the quarter ending in March, Coinbase’s operating expenses will shrink by 25% as a result of the layoffs and other restructuring initiatives.

Additionally, the company anticipates that its 2023 adjusted EBITDA losses won’t surpass the $500 million “guardrail” it established a year ago.

Brian Armstrong remarked that it was evident they would need to lower spending to improve their chances of surviving each scenario following several stress tests for the annual revenue.

He claimed that cutting back on staff was the only way to accomplish the objective.

Coinbase will also cancel a slew of low-probability projects.

The FTX factor

The FTX collapse significantly impacted around the end of 2022 despite the cryptocurrency market being volatile throughout most of the year.

The strain that FTX and its founder Sam Bankman-Fried put on the cryptocurrency sector was underlined by Armstrong.

“The FTX collapse and resulting contagion has created a black eye for the industry,” said the Coinbase CEO.

“We may not have seen the last of it – there will be increased scrutiny on various companies in the space to make sure that they’re following the rules.”

“Long term, that’s a good thing. But short term, there’s still a lot of market fear.”

Due to investors being wary of riskier assets during the downturn, cryptocurrency and technology stocks have underperformed over the past decade.

Shares of Coinbase have fallen by 83% in the last year, while those of Bitcoin has fallen by 58%.

Other companies and job cuts

Coinbase and several other tech firms went on a hiring binge at the start of the 2020 pandemic.

But many businesses are now rapidly dismissing their workers.

Amazon is dismissing 18,000 workers.
A 10% employee reduction was recently announced by Salesforce
Elon Musk cut back on half of the Twitter staff
Over 13% of Meta’s employees were let go
Fewer people were left employed by crypto firms Genesis, Gemini, and Kraken.

“Every company in Silicon Valley felt like we were just forced on growth, growth, growth, and people were almost using headcount as a symbol of how much progress they were making,” said Armstrong.

“The focus now is on operational efficiency – it’s a healthy thing for the ecosystem and the industry to focus more on those things.”

Coinbase had 2,000 new hires in the product, engineering, and design sectors planned for the beginning of 2022.

Since then, according to Brian Armstrong, he has been working to change Coinbase’s culture to resemble a startup with smaller, more agile teams.

The company

The stock price of Coinbase has decreased since its IPO more than two years ago.

The stock surged to $429.54 upon launch but now trades for less than $40.

On their personal accounts, Coinbase will send emails to employees who are being let go, and access to the systems will be blocked.

According to Brian Armstrong, even though the access limitation seemed excessive, it was their only option for protecting client information.

Armstrong is confident that the cryptocurrency business won’t vanish anytime soon despite a chain reaction of bankruptcies and a decline in transaction volume.

As a result of losing its greatest rival, Coinbase eventually gained the upper hand following the FTX crash.

According to Armstrong, the eventual change in regulatory clarity validates the business’s intention to grow and go public in the United States.

He compared the current state of affairs to the early days of the internet.

“If you look at the internet era, the best companies got even stronger by having rigorous cost management,” said Armstrong.

“That’s what’s going to happen here.”

Reference:

Coinbase to slash 20% of workforce in second major round of job cuts

Coinbase stock price jumps after settlement

Josh Barter on January 4, 2023

Coinbase: The cryptocurrency exchange site Coinbase had a sharp increase on Wednesday.

Following a $100 million settlement with the New York Department of Financial Services, the exchange’s stock price rose.

Following the agreement, COIN, which is listed on the Nasdaq Composite, was up more than 12% and was trading at $37.34 per share.

The settlement

Issues with the company’s compliance programs were settled between the company and the New York Department of Financial Services.

The cryptocurrency exchange must therefore pay a $50 million fine as a result.

Coinbase must also invest an additional $50 million to improve its capacity to adhere to financial regulations, such as transaction monitoring and KYC requirements.

The New York Banking Law and state rules surrounding the following were broken by the company, according to the Department of Financial Services, which said it failed to comply with a program.

Cybersecurity
Money transmitting
Transaction monitoring
Virtual currencies

Company vulnerability

The NYDFS claimed that Coinbase’s compliance program had issues that left it open to the following risks:

Activities related to narcotics trafficking or child sexual abuse material
Fraud
Money laundering

The Superintendent of Financial Services, Adrienne A. Harris, stated:

“It is critical that all financial institutions safeguard their systems from bad actors.”

“Coinbase failed to build and maintain a functional compliance program that could keep pace with its growth.”

The NYDFS asserted that the business has already begun to enhance its practices.

KYC

Coinbase’s treatment of the KYC rule and customer due diligence requirements was deemed by New York regulators to be a “check-the-box” activity.

The exercise was also deemed to be insufficient.

The department also learned the company has a sizable backlog for keeping an eye on suspicious transactions.

By the end of 2021, there were more than 100,000 unreviewed alerts.

As a result, some of the transactions that Coinbase highlighted weren’t examined for several months.

The NYDFS installed an independent monitor at the beginning of 2022 as a result of the company’s failure.

In order to resolve concerns with the company’s procedures, the monitor assessed the company’s compliance program.

The monitor will continue to work with Coinbase for an additional year as part of the settlement.

Price jump

Investors who now have a good understanding of the company’s regulatory issues are likely to have contributed to the surge in Coinbase stock’s (COIN) price.

The NYDFS inquiry was first mentioned by the cryptocurrency exchange platform in a late 2021 SEC report as a potential risk to its business operations.

But the regulator’s most recent statement effectively put an end to the matter.

SEC investigation

Despite the good news, an SEC inquiry against Coinbase is still imminent.

A probe into whether the SEC should permit Americans to trade digital assets that ought to have been registered as securities was launched against the corporation in July 2022.

A past insider trading case involving a former Coinbase employee who was suspected of breaking the company’s insider trading policies provides the basis for the current investigation.

The former worker allegedly told his brother and a friend about impending token listings, according to the accusation.

The agency discovered that the accused traded the following tokens:

AMP (AMP)
Rally (RLLY)
DerivaDEX (DDX)
XYO (XYO)
Rari Governance Token (RGT)
LCX (LCX)
Powerledger (POWR)
DFX Finance (DFC)
Kromatika (KROM)

Coinbase

In April 2021, the exchange platform for cryptocurrencies first went public.

It joined the US stock exchange as the country’s first significant cryptocurrency startup.

At the time, the cryptocurrency market was booming, with trades for Bitcoin reaching $63,000.

People consequently developed an interest in investing in cryptocurrencies.

COIN made its debut for an incredible $381, which was 52% more expensive than its $250 reference price.

But a sudden crypto and stock market collapse occurred in 2022.

Crypto ventures, businesses, and almost every coin’s price on the market were decimated by the severe bear market.

Since that time, COIN’s value has decreased considerably, plummeting 90% from the time it was first launched.

References:

Coinbase stock price jumps 12% following $100M NYDSF settlement

Coinbase reaches $100 million settlement with New York regulator over compliance programs

SEC launches probe into Coinbase over alleged securities listing: report

SEC claims Coinbase currently lists nine crypto assets that are securities

Sherrod Brown wants cryptocurrency banned in the US

Clara Emily on December 19, 2022

Sherrod Brown: Sherrod Brown, a US senator, recently suggested that US government organizations take cryptocurrency prohibition into consideration.

He especially named the Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

The news

Despite suggesting the ban, Brown acknowledged that it would be “very difficult” to put into effect during an appearance on “Meet the Press” on NBC.

According to the US senator, the cryptocurrency industry may move overseas.

He also referred to a number of American regulators, saying:

“We want them to do what they need to do at the same time – maybe banning it.”

“Although banning it is very difficult because it will go offshore and who knows how that will work.”

Sherrod Brown used several examples to support his claims, including “the threat to national security from Korean cyber criminals to drug trafficking and human trafficking and financing of terrorism and all things that can come out of crypto,” along with other instances.

The collapse of FTX is yet another good illustration.

The FTX collapse

At the beginning of November, the cryptocurrency exchange FTX failed and declared bankruptcy.

The corporation said it would file for Chapter 11 bankruptcy and then start analyzing and liquidating assets.

A trade company and related corporation named Alameda Research also declared bankruptcy.

The filing, however, excludes a few businesses, including:

Ledger X LLC
FTX Digital Markets Ltd.
FTX Australia Pty Ltd.
FTX Express Pay Ltd.

In the release, company founder and CEO Sam Bankman-Fried announced his departure.

John J. Ray III took over and said:

“The FTX Group has valuable assets that can only be effectively administered in an organized, joint process.”

What happened

In the world of cryptocurrencies, Sam Bankman-Fried once enjoyed rockstar status but swiftly lost it.

Last year, Binance began selling its holdings of FTT (FTX’s native exchange token) as part of an equity exit from the business.

As the token’s value dropped, investors started withdrawing funds from the FTX, which led the platform to block withdrawals and declare a panic.

Brown’s sentiments

Earlier this month, Sherrod Brown asked that several government organizations collaborate to address the problem of capturing cryptocurrency.

“Single regulatory agencies currently generally do not have a comprehensive view of crypto asset entities’ activities,” he declared in a statement.

In the US government, Brown, a Democrat who has served as the representative for Ohio since 2007, is not the only high official who has advocated for more crypto regulations.

Senator Elizabeth Warren proposed a new bitcoin regulation bill last month.

The proposed legislation is referred to as the Digital Asset Anti-Money Laundering Act.

It attempts to require crypto asset producers to deliver audited financial accounts.

Additionally, the bill wants to put in place capital norms akin to those used by banks and other conventional financial institutions.

Finally, the proposal would grant the SEC greater control over the asset class.

Offshore crypto movement

Contrary to what the US Senator indicated, the cryptocurrency industry is already moving operations abroad due to the US government’s uncertain regulatory future.

In a tweet from November, Coinbase CEO Brian Armstrong addressed the problem.

“FTX.com was an offshore exchange not regulated by the SEC.”

“The problem is that the SEC failed to create regulatory clarity here in the US,” he continued.

“So many American investors (and 95% of trading activity) went offshore.”

Armstrong continued by calling the sanctions scenario against US firms ridiculous.

After FTX’s bankruptcy, Brian Armstrong emphasized his desire for US lawmakers to seize the initiative and lead the world’s race toward crypto legislation.

He claimed that Coinbase has been a significant proponent of the regulation of cryptocurrencies and contrasted the tactics of his site with that of a Bahamian-based “offshore exchange.”

References:

Banking committee chair: US regulators should ‘maybe’ ban crypto

FTX files Chapter 11 bankruptcy, SBF steps down as CEO

FTX crisis an ‘opportunity’ for US to clarify crypto regulations: Coinbase CEO