News
17
Jul
crypto market news

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7/17 News Roundup: Ripple, Binance, Multichain, Polygon

Ripple won a huge victory in court against the SEC. Binance celebrated its 6th birthday amid negative news. Investors suffered losses of more than 100 million dollars from the collapse of the Multichain protocol. Polygon announced the 2.0 architecture and plans for changing the MATIC token to the POL token.

Ripple got a huge win in court

The most significant news in July concerns the Ripple vs. SEC lawsuit. In a process that lasted over two and a half years, an important decision was reached on Thursday last week: XRP is not a security! It was a huge win for Ripple, the XRP token, and the crypto sector in the United States.

Ripple and the SEC haven’t even made it to the courtroom and in front of the jury yet. Since both parties agreed on the facts of the case, a solution was sought directly by a judge’s decision. It wasn’t a 100 percent win for Ripple, but very close.

This is how Ripple’s Chief Legal Officer, Stuart Alderoty, commented on the case on Twitter:

Due to the news, the XRP token was immediately listed back to exchanges that had de-listed XRP earlier. Coinbase, Kraken, and Crypto.com were the first to react. The price of XRP also skyrocketed from about $0.47 to $0.82, or 75 percent. At the same time, it overtook BNB in ​​market value and became the fourth-largest cryptocurrency.

A lot of confusion has been seen among retail investors as to what will happen next. It has been speculated that Ripple may have received a statement that clears them of wrongdoing, leading some to believe the case has been closed. This is not the case. The situation with Ripple and XRP has improved enormously, but the process isn’t over. Several different legal experts have confirmed this.

However, the situation is far from easy for the SEC. The SEC must take the process to a courtroom with a jury and get a final verdict. An appeal is only possible after this. If the SEC moves forward with the process, it may result in another two years of waiting.

At the same time, the SEC has received a hard knock on its shield, as the judge’s opinion was well-reasoned and very clear. Any opponents of the SEC can use this statement in their own lawsuits. In all likelihood, the SEC vs. Coinbase battle also turned significantly in Coinbase’s favor.

This was a significant win for the entire crypto sector, and now there is reason to celebrate. The news was received on social media in a very boisterous mood last Thursday. A contrary verdict would have been a huge setback for the cryptocurrency sector in the United States.

Binance celebrated six years amid negative news

The world’s leading crypto exchange Binance has been in the middle of a negative news storm in recent months. The snowball started to roll at the beginning of June when the SEC sued Binance and its founder Changpeng Zhao and listed no less than 13 different charges.

“Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law,” commented SEC boss Gary Gensler last month. So far, no new information has been received about these charges.

Throughout the summer, Binance has also suffered blows from the direction of infrastructure and regulators. The news affecting Europeans was received three weeks ago when Paysafe, the partner used in European SEPA deposits, said it would end its partnership with Binance. If Binance doesn’t find a new banking partner, SEPA transfers will end in September.

Binance has also faced other challenges in Europe. The company has had to withdraw from the markets of Cyprus, Austria, Holland, Great Britain, Belgium, and Germany during the summer. However, it is good to note that Binance has several licenses for EU countries. The MiCa regulation, which will come into use next year, makes operating in the entire EU area possible when the operator has a license for one country.

And that’s not all. According to various sources, Binance has fired thousands of employees during the summer. Binance CEO Changpeng Zhao has called the news an exaggeration. However, the company has laid off a large number of employees. Even Binance is no longer immune to a market slowdown.

Amidst all the drama, Binance also celebrated its 6th birthday. In a recent blog post, the founder of Binance, CZ, explains how the company started in the summer of 2017 with an initial investment of only 15 million dollars. Binance.com initially operated in only two languages, listed six cryptocurrencies, and had to hire a support team from another company.

Despite its modest start, Binance was already in December 2017 the largest exchange in the crypto market regarding trading volume. The company became the market’s leading exchange in 2018 and currently serves 140 million customers. It is undoubtedly one of the biggest success stories in the technology sector.

Today we have also received positive news regarding technology; Binance has integrated the Bitcoin Lightning Network! Both withdrawals and deposits are now possible through the Lightning wallet.

Multichain protocol collapsed due to a security breach

The year 2023 has been full of news related to regulation but less about security breaches (hacks). DeFi hacks have cost investors billions of dollars in recent years. The large-scale attacks have decreased significantly, but there has been news of more than $100 million in losses in recent weeks.

This time the victim is a cross-chain protocol called Multichain. Its problems started already in May when the project’s CEO Zhaojun was arrested by the Chinese authorities. Zhaojun has not been reached since then, ultimately leading to the entire protocol’s crash.

Multichain’s private keys were stored in a cloud service managed by Zhaojun. A week ago, an unknown entity gained access to the cloud service’s account and drained more than $100 million worth of funds from Multichain’s token bridges. This was the final blow to the protocol.

A couple of days ago, Multichain told us about the project’s shutdown on Twitter.

Token bridges have been the subject of major hacks in the past. This time it was not a vulnerability in the smart contract, but access to the private keys was obtained through a cloud service. One can, with good reason, ask how can such a centrally managed protocol be called a DeFi application.

Multichain’s hacks had radiation effects on other platforms as well. By far, the biggest blow was experienced by Fantom, whose liquidity collapsed from around 370 million dollars to only 70 million. It’s hard to believe that Fantom’s TVL in March 2022 was over seven billion dollars!

Polygon 2.0 and POL token

Polygon is Ethereum’s leading scaling solution, i.e., the so-called Layer 2. It competes with the Arbitrum and Optimism blockchains in this sector. However, Polygon is much more than just a blockchain linked to Ethereum. Polygon has created its own ecosystem, which includes blockchains using different technologies.

Polygon PoS is the best-known and most used of these, but Polygon also offers a zkEVM solution. In addition to that, application-specific blockchains called Supernets can be created in the architecture. See the image below.polygon 2.0

Polygon presented the Polygon 2.0 concept earlier this summer, which will create the “Value Layer for the Internet”. Polygon 2.0 will also make it easier to wrap Ethereum assets into Polygon.

In the same context, the native token of Polygon, MATIC, will have a new ticker titled POL. MATIC is a relic of history, as Polygon started as Matic Network.

The POL token will play an even wider role in the Polygon ecosystem. In the future, validators can participate in the validation of several different blockchains and receive rewards for, e.g., zero-knowledge proof generation.

The change to the POL token takes place through Polygon’s governing body, where the holders of the MATIC token vote on it. Most likely, the update will be approved. MATIC holders will have years to upgrade their coins if the exchange occurs.

Polygon’s price was also on a nice rise last week, fueled by the XRP news. Polygon was one of many altcoins that rocketed 20-30 percent on Thursday after XRP.

The reason for the rise was the SEC’s charges against Binance and Coinbase in early June, where Polygon (like many other altcoins) was designated as security. This led to a drastic drop in the price of the MATIC token. The recent court decision made investors buy, i.e., Polygon’s price offset the losses suffered at the beginning of June.

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