Wu’s Weekly Picks: Fed Announces Pause on Interest Rate Hikes, China’s Central Bank Cuts Medium-term Lending Rate, Judge Rejects Freezing of Binance Assets, and Top 10 News (June 9-16)

Wu's Weekly Picks: Key News (June 9-16) - Fed pauses interest rate hikes - China's central bank cuts medium-term lending rate - Judge rejects freezing of Binance assets - Top 10 news

Author | 吴说区块链

Top 10 News of the Week

1. US Macro Economic Information

a. The Fed announced a pause in rate hikes

• Binance and Coinbase face SEC charges: Detailed analysis of market reaction and impact
• Why did the crypto community react negatively to BlackRock’s “wind-facing” application for a Bitcoin ETF?
• Arthur Hayes’ Blog: US Regulatory Pressure Intensifies, Hong Kong Welcomes Cryptocurrency – What Does This Mean?

On June 15th, the Fed announced a pause in rate hikes for June, the first pause after 10 consecutive rate hikes since March 2022. The Fed’s FOMC statement stated that keeping rates unchanged allows for the evaluation of more external data. If the economy and inflation no longer cool further, they will be inclined to raise rates next month. According to WSJ, two more rate hikes are expected this year.

b. US May non-seasonally adjusted CPI YoY 4%, hitting a new low since March 2021

US May non-seasonally adjusted CPI YoY was 4%, expected 4.1%, and the previous value was 4.9%. US May non-seasonally adjusted core CPI YoY was 5.3%, expected 5.3%, and the previous value was 5.5%. The May CPI data decreased significantly from the previous month, which was the 11th consecutive decline and hit a new low since March 2021.

2. China’s central bank lowered the bid interest rate by 10 basis points to 2.65%

On June 15th, according to Wall Street News, China’s central bank lowered the bid interest rate by 10 basis points to 2.65%, which is the tenth month in a row that the MLF rate has been lowered. The last time was in August last year when the MLF was lowered by 10 basis points. Prior to this, the central bank had lowered the bid interest rate for open market reverse repurchase (OMO) by 10 basis points to 1.9% on June 13th, and the overnight period of the standing lending facility rate was lowered by 10 basis points to 2.75%, and the 7-day period was lowered by 10 basis points to 2.9%.

3. Binance Weekly Update

a. Binance hearing: Judge denies asset freeze, will reach agreement with SEC to discuss securities definition

Early morning of June 14th Beijing time, the federal judge responsible for supervising the case against Binance and BinanceUS by the US Securities and Exchange Commission refused to issue a temporary restraining order freezing the assets of the US trading platform. Judge Amy Berman Jackson of the District of Columbia District Court said that there was “absolutely no need” for a restraining order to be issued. At the same time, the judge ordered BinanceUS to provide its business expenditure list to the court and ordered both parties to continue their negotiations.

On June 17th, Judge Amy Berman Jackson of the District of Columbia Circuit Court agreed to the settlement between Binance and the SEC and submitted an order of agreement. Earlier, the judge had rejected the SEC’s request to freeze Binance US and other entities’ assets and asked the two sides to negotiate. The proposed agreement ensures that only BinanceUS employees can access customer funds.

b. Binance.US has gone through a round of layoffs, with about 50 people being laid off.

On June 16th, according to Reuters, Binance.US has gone through a round of layoffs, with about 50 people being laid off, including employees from the legal, compliance, and risk departments, since regulatory agencies accused it of violating securities laws and attempted to freeze its assets last week. A Binance.US spokesperson did not respond to emails and calls seeking comment.

c. Binance is considering appointing Vice President Li Zhongxun to be the chief representative of GoBlockingx.

On June 13th, according to Korean media Decenter, Binance is considering appointing Vice President Li Zhongxun to be the chief representative of GoBlockingx to complete the acquisition. Earlier this year, GoBlockingx appointed Binance’s Asia-Pacific President Feng Hong as its new chairman and strengthened Binance’s control. The SEC’s recent lawsuit against Binance has raised concerns about the success of the acquisition.

d. Binance applies to withdraw its application for registration as a cryptocurrency asset service provider submitted in Cyprus. link

On June 14th, Binance’s Cyprus subsidiary, Binance Cyprus Limited, is reviewing its application for deregistration. Last year, Binance obtained registration as a cryptocurrency asset service provider (CASP), allowing it to provide spot, custody, pledge, and card services in Cyprus.

e. Binance announces exit from the Dutch market.

On June 16th, Binance announced its exit from the Dutch market and will no longer accept new users residing in the Netherlands. Existing Dutch resident users will only be able to withdraw assets from Binance starting on July 17th and will no longer be able to trade or deposit. Binance will continue to strive to fully comply with the EU’s new rules on crypto assets (MiCAR). The Dutch Central Bank (DNB) had imposed an administrative penalty of 3,325,000 euros on Binance in April 2022 for providing crypto services in the Netherlands without registering with the DNB as required by law.

Binance is under investigation by French authorities for “illegal” provision of digital asset services and “serious money laundering”. On June 16th, the Paris prosecutor’s office confirmed that Binance is under investigation by local authorities for “illegally” providing digital asset services and “serious money laundering”. French prosecutors allege that Binance “on the one hand is involved in the illegal exercise of the functions of a digital asset service provider, and on the other hand is engaged in aggravated money laundering activities through operations such as investment, concealment, and conversion, which are carried out by criminals who profit from them.” and said that it is now necessary to conduct a thorough examination of the files and computer elements collected during the search process. Previously, Paris and Dubai were once designated as dual headquarters by Binance.

Binance responded that in France, on-site visits by regulatory agencies and inspectors are part of the regulatory obligations that all financial institutions must comply with. Last week, Binance accepted on-site visits from relevant authorities, fully cooperated and fulfilled its due obligations. Binance continues to work closely with regulatory agencies and law enforcement departments to continue to meet compliance requirements. In addition to stating that user information is properly protected and only provided to government officials after receiving appropriate proof documents, Binance will not make specific comments on law enforcement or regulatory investigations.

4. The world’s largest asset management company, BlackRock, is submitting an application for a spot Bitcoin ETF to the SEC

On June 15th, according to CoinDesk, the world’s largest asset management company, BlackRock, is about to submit an application for a Bitcoin ETF. According to insiders, BlackRock will use Coinbase Custody to price ETF and cryptocurrency exchange spot market data. BlackRock has been working with Coinbase since the middle of last year to allow institutional investors to use cryptocurrencies directly.

According to SEC filings submitted by BlackRock’s iShares, the application is for a spot Bitcoin (BTC) ETF called iShares Bitcoin Trust. The application states that Coinbase will be responsible for holding the underlying Bitcoin of the trust as a custodian, and Nasdaq will oversee the pricing data required to provide spot market prices. The SEC has previously refused to approve Bitcoin ETFs on the grounds of market manipulation concerns.

Anthony Pompliano, co-founder of Morgan Creek Digital, commented that the iShares Bitcoin Trust applied for by BlackRock is a redeemable trust, not an ETF. ETFs and trusts are similar but differ technically, especially in terms of regulatory approval. However, the ultimate result for investors is similar. He also said that if it is approved for issuance, it may force GBTC to introduce daily redemption and reduce fees to compete with it, and many Wall Street companies may quickly follow suit to launch competing products.

5. USDT experienced slight decoupling due to FUD, and Tether’s stablecoin reserves were previously supported by Chinese securities

a. FUD reappears, USDT experiences slight decoupling

On June 15th, the price of USDC/USDT trading pairs on Binance continued to rise, reaching $1.0042, the highest level since June 13th, 2022, and USDT actually fell 0.3%. USDT accounts for 73.79% of the 3pool in Curve, DAI is 13.05%, and USDC is 13.16%, which is in a skewed state. The USDT borrowing rate on Aave V2 has skyrocketed, with deposit rates increasing by more than 20% and loan rates increasing by more than 30%. Some large holders have borrowed USDT on Aave and sold it on DEXs such as Curve.

The Tether CTO stated that the current market is tense, making it easy for attackers to exploit this common sentiment, and Tether is ready to redeem any amount.

b. Bloomberg: Tether Holdings Ltd.’s stablecoin reserves were previously supported by Chinese securities

Documents released by the New York prosecutor’s office show that Tether Holdings Ltd. previously listed securities issued by the Industrial and Commercial Bank of China, China Construction Bank, and Agricultural Bank of China as part of its USDT stablecoin reserves, but denied this in July last year. In addition, Tether also holds securities issued by Deutsche Bank, Barclays Bank, and ArcelorMittal SA. A Bloomberg investigation released in October 2021 found evidence that Tether’s reserves actually include billions of dollars in short-term loans to Chinese companies and a large amount of loans to the crypto platform Celsius Network.

6. South Korean crypto lending company Delio announces suspension of withdrawals

South Korea’s largest crypto lending company Delio announced that it will suspend withdrawals from 6:30 p.m. on June 14th. Delio said this was done in response to the increased market volatility after Haru Invest suspended deposits and withdrawals. South Korean cryptocurrency exchange Upbit subsequently announced that it would limit Delio’s withdrawals.

Earlier, on June 13th, the cryptocurrency asset management platform Haru Invest stated in a post that a service partner recently encountered some problems and is further investigating the matter and seeking emergency plans to correct the situation. To protect the assets entrusted, any deposit and withdrawal requests will be suspended from 8:40 on June 13th (UTC+8) until further notice.

7. When the BNB price reaches the liquidation threshold, the BNBChain core team will take over the BNB position on the Venus Protocol.

Due to the recent drop in BNB price, the BNB position on the Venus Protocol has been constantly approaching the liquidation threshold (about $220). Venus Protocol announced that the community has granted the whitelist permission to the BNBChain core team for liquidating the BNB bridge attacker’s position through a governance proposal submitted by BNBChain in November 2022 to ensure the safety of misappropriated assets and prevent further impact and sell-off. The whitelist wallet was initially supported by 30 million USDT and approved by the Venus governance mechanism to prevent undersupply on Venus and provide additional support.

Additionally, according to monitoring by 0xScope on June 12, the liquidator address 0x5630 also received 30 million USDT transferred from Binance, which will be used to repay the debt to the BNB bridge attacker on Venus when the BNB price falls below $220. The address currently holds 30 million USDT and 30 million BUSD.

8. CFTC wins Ooki DAO case, setting precedent for DAOs to assume legal responsibility

On June 10th, a federal judge ruled in favor of the Commodity Futures Trading Commission (CFTC) in its enforcement action against Ooki DAO. This precedent establishes that DAOs should be held legally responsible for their actions. The court ruled that Ooki DAO is civilly liable for operating an illegal trading platform and acting as an unregistered futures commission merchant. Due to the default judgment, its trading platform has been ordered to cease operating in the United States and is prohibited from doing business with any entity registered with the CFTC.

9. Grayscale withdraws application for FIL trust product from SEC

On June 10th, Grayscale filed a request with the US Securities and Exchange Commission (SEC) to withdraw its application to launch a Filecoin (FIL) trust product. Grayscale stated in its withdrawal request that it still believes FIL is not a security. Previously, the SEC told Grayscale in a letter that FIL “meets the definition of a security under federal securities laws” and therefore must withdraw its application.

10. FTX debtor’s customer claim website goes live

On June 15th, according to @AFTXcreditor, the FTX debtor’s customer claim website has gone live and will be launched around July 3, 2023, after signing a court order related to the customer deadline motion. According to screenshots released by @AFTXcreditor, the website can be used through the following steps: 1. log in to the FTX account again; 2. verify email; 3. complete KYC verification; 4. browse FTX wallet; 5. submit a claim proof; 6. prepare for subsequent steps.

Key Financing Events

• ResearchHub, a cryptocurrency research platform founded by Coinbase CEO, completed a $5 million Series A financing

• Gensyn, a blockchain-based AI computing protocol, completed a $43 million Series A financing led by a16z

• DeFi protocol Maverick completed a $9 million financing round led by Founders Fund, with participation from Blockingntera Capital, Binance Labs, Coinbase Ventures, and Apollo Crypto

• Decentralized identity startup Intuition completed a $4 million seed round financing

For more industry financing events, please visit crypto-fundraising.info.

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