News
28
Mar
crypto news

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3/28 News Review: Binance, Coinbase, Arbitrum, EUROe, Skull of Satoshi

The CFTC has sued Binance and its founder Changpeng Zhao. Coinbase received a Wells Notice from the SEC. Arbitrum’s long-awaited airdrop happened last week. The Finnish stablecoin EUROe was launched on the Polygon platform. Skull of Satoshi became a viral hit on social media.

The CFTC sued Binance

The year 2023 has been dramatic when it comes to the actions of the US administration toward the crypto sector. There has been a direct state of war between the crypto industry and the US authorities carrying out supervision.

The SEC, which supervises the securities market, and the CFTC, which regulates the commodity market, have attacked a new company almost every week. In addition, the Signature and Silvergate banks which served many crypto companies, have been brought down. Yesterday (Mon 3/27), market leader Binance became the latest target of the US authorities.

It was already reported in 2021 that CFTC is looking into Binance. Now that investigation has materialized into a direct charge at the Binance exchange and its founder Changpeng “CZ” Zhao.

According to the CFTC, Binance has allowed US citizens to trade on its platform and has not performed a proper KYC process. The CFTC also accuses Zhao of controlling 300 accounts on the Binance platform that have traded against the Binance customers.

Today, Zhao released his response to the CFTC’s allegations. You can read it on Binance’s website. According to CZ, Binance will respond to the accusations in more detail in due course. CZ underlines the following points in his statement:

  • Binance has the most advanced KYC / AML process in the industry
  • Binance continuously cooperates with the authorities, and the company has a compliance team of 750+ people
  • Binance does not manipulate the market under any circumstances

The news has not caused major drama in the market. The BNB token has suffered the most, as expected. Its price dropped ten percent right after the news. The crypto market is generally about two percent in the red compared to 24 hours ago.

The most likely scenario will be that Binance is going to pay some fines. BitMEX, which dominated the crypto derivatives market before Binance, paid a $100 million fine to the CFTC in 2021 in a somewhat similar case.

Coinbase is being attacked by the SEC

Coinbase is the leading cryptocurrency exchange in the United States. It is publicly known as the most regulated exchange in the industry. And not least because Coinbase has already been listed on the Nasdaq exchange for two years, which means more obligations regarding the publication of financial data.

The SEC, which oversees the securities market in the United States, approved Coinbase’s IPO two years ago and gave the green light to the stock market listing and thus to the company’s operations. In addition, Coinbase has engaged in dialogue with regulators with continuous input.

Despite this, the SEC has attacked Coinbase. The SEC has sent Coinbase a so-called Wells Notice, which is a warning that a lawsuit is imminent. Quite frustrated comments have been heard from Coinbase – for good reason. The founder and CEO, Brian Armstrong, posted a tweet thread about it a week ago.

So far, there is no exact information about what the SEC is aiming for. This is how Coinbase commented on the content of the Wells Notice on its blog:

The SEC staff told us they have identified potential violations of securities law, but little more. We asked the SEC specifically to identify which assets on our platforms they believe may be securities, and they declined to do so.

According to Coinbase, the company has met with SEC representatives more than 30 times in recent years and has repeatedly asked the SEC for detailed regulations so that industry representatives can comply with the rules. In vain. The SEC refuses to even say which cryptocurrencies it considers to be securities.

Coinbase has been preparing for a potential SEC attack for years. It has a war chest of billions of dollars, and the company plans to defend itself in court. This could turn into a years-long fight in the court.

At the beginning of February, the SEC made a similar attack against Coinbase’s competitor Kraken. Kraken didn’t want to fight the issue in court, so it paid $30 million in fines and ended up shutting down its staking service.

Law-abiding crypto companies will soon be driven out of the country by US authorities. The same also applies to the workforce and crypto startups. The actions seen this year have seriously harmed the crypto industry in the US.

Arbitrum’s long-awaited airdrop

A new cryptocurrency called Arbitrum was introduced to the crypto market last week. It is Ethereum’s scaling solution, which has been running so far without a token. The situation changed a week ago when Arbitrum launched an airdrop of the ARB token.

As the name suggests, Airdrop means “tokens dropped from the air” into investors’ wallets. ARB tokens were distributed to investors who have actively used the Arbitrum platform. The more transactions you have made, the bigger your share of the airdrop was.

It is important to note that the Arbitrum token is a governance token, not a utility token. Transaction fees on the platform are paid with Ether (ETH) and not with ARB tokens.

After the airdrop, Arbitrum’s main interface and the block explorer crashed due to the extensive demand.

There was a good reason why investors were rushing to claim their coins. Airdrop tokens often plummet immediately when investors rush to cash out free money. The price of the ARB token dropped from around 9-10 dollars to 1.1 dollars very quickly.

Arbitrum’s price has since stabilized in the range between $1.1 and $1.2. This gives Arbitrum a market cap of $1.5 billion and the 38th position in the cryptocurrency ranking list. Competing solution Optimism (OP) is more than 50% smaller with a market cap of around $650 million.

Arbitrum is the fourth largest smart contract platform when measured in TVL, which describes the total liquidity stored. Only Ethereum, Tron, and BNB Chain are ahead of it. Arbitrum has a TVL of $2.16 billion. Optimism has a TVL of $905 million.

Just like Optimism, Arbitrum also utilizes Optimistic Rollups technology. These Layer 2 solutions can be compared to Bitcoin’s lightning network. The purpose of Optimism, Arbitrum, and the LN is to take most transactions out of the main chain to Layer 2 where they can be processed faster and cheaper.

EUROe was launched on the Polygon platform

EUROe is a euro-based stablecoin implemented by Finnish Membrane Finance. We first reported on the EUROe project in December 2022 and again in February 2023, when EUROe was launched on the Ethereum network.

A week ago, the project took another step: EUROe coins are now also on the Polygon platform. Polygon is Ethereum’s sidechain and one of Ethereum’s best-known scaling solutions.

Polygon’s popularity has increased drastically during the previous year. Measured by liquidity, it is the 5th largest smart contract platform on the market. The native token MATIC is already the 9th largest cryptocurrency.

According to our information, EUROe is expanding after Polygon to the Arbitrum platform mentioned in the previous news.

EUROe is an interesting case also from the point of view of regulation. It is not a cryptocurrency (virtual currency) like other stablecoins, but electronic money. Thanks to this, EUROe already meets the requirements of the EU’s future stablecoin regulation – unlike competing alternatives.

EUROe can only be bought on decentralized exchanges such as Uniswap. Hopefully, EUROe will soon be available on centralized European exchanges too.

The Skull of Satoshi became a popular Bitcoin symbol

There was a special episode on social media last weekend involving Greenpeace, art, and Bitcoin. The case is called Skull of Satoshi.

Greenpeace is the world’s largest environmental organization, whose activists are surely familiar to all readers. Greenpeace is also an organization critical of Bitcoin’s energy consumption. This is not surprising, as Bitcoin’s energy consumption has been attacked by various institutions and individuals for many years.

Greenpeace launched a campaign called “Change The Code” a year ago. Its purpose is to drive change in Bitcoin and move it from the energy-consuming Proof of Work consensus to the Proof of Stake consensus. One of the financiers of the campaign was Ripple’s founder Chris Larsen.

Greenpeace’s latest campaign is called Skull of Satoshi. The organization hired the artist Benjamin Von Wong to make a work resembling “Satoshi’s skull” out of scrap electronics. Its purpose is to describe the environmental pollution caused by Bitcoin and to terrify people.

Below is a picture of this artwork. Read more about its manufacture at blog.vonwong.com/skull/.

skull of satoshi

Greenpeace’s campaign had a surprising effect. Far from attacking the artist, Bitcoin fanatics took the work as their own. Almost everyone thinks it’s the coolest piece of art ever made out of Bitcoin.

It’s easy to agree with this view. Skull of Satoshi is a wonderful work in the spirit of cyberpunk. In addition, the nuclear power plant pipes rising from the skull symbolize sustainable energy.

Artist Von Wong received a hugely positive response after revealing the artwork. He has since talked to many Bitcoin supporters and has begun to better understand Bitcoin’s energy consumption.

Von Wong tweeted :

I made the Skull believing that Bitcoin Mining was a simple black-and-white issue. I’ve spent my entire career trying to reduce real-world physical waste, and PoW felt intuitively wasteful. Of course, I was wrong. Few things in the world are black and white. Dumb me.

Skull of Satoshi became a viral hit, but for a completely different reason than the artist or Greenpeace originally intended.

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