Coinbase Sues SEC and FDIC

What is happening in the crypto market? Is Bitcoin Growing or Crypto Dying? Find answers to all these questions and more in our weekly roundup of cryptocurrency news.

US Presidential Debate: What About Cryptocurrencies?

Last week, Bitcoin and the rest of the crypto market experienced quite a lot of price swings, partly influenced by the first presidential debate of 2024 between Donald Trump and Joe Biden. During the debate, the price of bitcoin jumped 1.1% from $61,439 to $62,152. The increase coincided with prediction markets showing an increase in Trump's odds of winning, climbing from 0.53 to 0.63, while Biden's odds fell from 0.48 to 0.37. The debate itself did not cover cryptocurrency issues directly, but the market was still reacting to the broader political dynamics surrounding it.

Trump's favorable stance on cryptocurrencies, including his promises to end Biden's perceived “war on cryptocurrencies” and his advocacy of US cryptocurrency mining and opposition to central bank digital currency, contrasts with Biden's more cautious regulatory approach. This divergence likely influenced market sentiment and contributed to Bitcoin's brief rally during the debate. Despite the lack of direct cryptocurrency discussion, the impact of the political climate on the regulatory outlook remains a key factor for investors.

Historically, the price of Bitcoin has often been sensitive to major political and regulatory events. For example, in late 2022, when the US government seized approximately 50,000 BTC linked to the website Silk Road, the market experienced significant volatility. Similarly, major regulatory announcements such as China's crackdown on cryptocurrency mining and trading have led to sharp price corrections.

Outside of the debate, the crypto market is also facing pressure from other sources. Notably, the US government's move of 3,940 BTC to the Coinbase Prime address raised concerns about a potential selloff, which historically tends to push prices lower. The move came after the government had previously sold a significant amount of seized bitcoins, putting further pressure on the market.

What does this mean for the crypto market?

Bitcoin and other cryptocurrencies are likely to remain volatile as the US presidential race progresses and the candidates' positions on digital assets become clearer. The outcome of the election and subsequent regulatory environment may play a major role in shaping the future of the cryptocurrency market. Pro-crypto governance could foster a more conducive environment for innovation and growth in the industry. Conversely, continuing Biden's cautious approach could lead to tighter regulations, potentially stifling market expansion. Investors should closely monitor political developments as they could significantly affect market dynamics and future investment strategies.

The tables have turned: Coinbase is suing the SEC and the FDIC

Last week, Coinbase, one of the largest cryptocurrency exchanges in the US, escalated its legal battle with federal financial regulators by filing lawsuits against the US Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). The lawsuits, filed in the U.S. District Court for the District of Columbia, seek to compel the agencies to comply with Freedom of Information Act (FOIA) requests that have been denied. Coinbase claims that these regulators are part of a concerted effort to cut off the crypto industry from the banking sector, an initiative they are calling “Operation Choke Point 2.0.”

The core of Coinbase's complaint revolves around the denial of FOIA requests that sought information about the SEC's stance on Ethereum and other digital assets, as well as the FDIC's “pause letters” sent to banks advising them to halt cryptocurrency-related activities. Coinbase says these denials hinder their ability to understand the regulatory environment and protect their business interests. The lawsuits are also seen as a response to what Coinbase describes as “regulation by enforcement,” a strategy used by the SEC to regulate the crypto industry without clear guidelines.

Coinbase's move follows a series of regulatory actions against the crypto industry. The SEC has been particularly aggressive, investigating Ethereum 2.0 and targeting platforms like EtherDelta and companies like Enigma MPC for securities violations. Coinbase says the actions are part of a broader strategy to stifle the growth of digital assets by limiting their access to basic banking services. This legal action is not Coinbase's first; has previously sued the SEC to compel the rulemaking process and is currently litigating the SEC's claims that it operates an unregistered stock exchange.

What does this mean for the crypto market?

The legal battles highlight the ongoing tension between the crypto industry and federal regulators. Coinbase's lawsuits seek to bring transparency to the regulatory process and challenge what it sees as overstepping the agency's authority. The outcome of these cases could have significant implications for the crypto industry, potentially setting a precedent for how digital assets are regulated and how federal agencies interact with the industry.

In the short term, Coinbase's legal action could create uncertainty in the cryptocurrency market as investors react to the potential for increased regulatory scrutiny and the outcome of these lawsuits. The resolution of these legal battles could significantly affect the regulatory environment for cryptocurrencies in the US

The historical pattern suggests that while regulatory measures may cause short-term disruptions, they can also lead to long-term stability once clear rules are established. For example, after initial volatility due to ICO suppression, the market eventually adjusted, leading to more robust and compliant projects. Investors can look to these precedents to gauge potential outcomes and strategies, highlighting the need for a balanced approach to regulatory developments in the crypto market.

Did cryptocurrencies fall this week?

Although the crypto market experienced a significant drop earlier this week, prices have mostly bounced back and managed to return to their values ​​this time last week. In the top 10, Bitcoin (-5%) and Ethereum (-1.8%) both suffered minor losses while Salana (+9.8%) and TON (+4.5%) were able to record gains.

Last week's biggest winners were LOCUS (+141%), BETA (+132%)and MICHI (+116%). Among the 100 best ACP (+25%) came out ahead. As for the losers, CREAM (-22.8%) and ARK (-21.5%) recorded the biggest drop in the top 500.

Disclaimer: Please note that the content of this article is not financial or investment advice. The information provided in this article is solely the opinion of the author and should not be considered a trading or investment recommendation. We make no guarantees as to the completeness, reliability or accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader or regular user of cryptocurrencies should research the various points of view and familiarize themselves with all local regulations before investing.