2023-11-21 16:18

Prices tumbled Tuesday morning as the DOJ announced an imminent major crypto enforcement action, but then rebounded Cryptocurrency markets were sharply lower on Tuesday as fading excitement about imminent approval of a spot bitcoin ETF was replaced with the reality of the continued regulatory crackdown in the U.S. The DOJ announced "significant cryptocurrency enforcement actions," to be unveiled later this afternoon, sending bitcoin (BTC) lower by more than 2% to $36,400 and ether(ETH) down more than 3%. The broader CoinDesk Market Index (CMI) also fell more than 3%. Things have bounced since on a report that the DOJ's action will be a settlement with Binance. The news jibes with yesterday's leak that Binance was nearing a $4 billion deal with U.S. authorities. While that's a large number and questions remain about possible criminal charges for Binance founder and CEO Changpeng Zhao, markets were relieved that the report didn't seem to indicate that the world's largest crypto exchange was in danger of being shut down. At press time, bitcoin is lower by more than 1% to $37,000 and the CoinDesk Market Index (CMI) has trimmed its loss to below 3%. Binance exchange token BNB is higher by 6%. Nevertheless, crypto markets for the time being will continue to have to deal with a hostile regulatory environment in the U.S. The Securities and Exchange Commission (SEC) late last week delayed any decisions on three more spot bitcoin ETF applications, likely making any resolution on these vehicles a 2024 event. Last night, the agency launched a lawsuit against crypto exchange Kraken for operating an unregistered platform. https://www.coindesk.com/markets/2023/11/21/bitcoin-buffeted-than-bounces-on-binanceus-settlement-report/

2023-11-21 16:16

Richard Teng takes over as CEO of the world's largest crypto exchange. Binance, the world's largest crypto exchange, was criminally charged with breaking sanctions and money-transmitting laws and agreed to pay $4.3 billion to settle the allegations in "one of the largest penalties" the U.S. has ever obtained from a corporate defendant. Founder Changpeng "CZ" Zhao pleaded guilty in Seattle to charges he personally faced and agreed to pay a $50 million fine, as well as step down from the CEO job. Richard Teng, a former Abu Dhabi regulator and later Binance's regional markets head, will take over as CEO. Binance was accused of failing to maintain a proper anti-money laundering program, operating an unlicensed money-transmitting business and violating sanctions law, according to a court filing unsealed on Tuesday. Zhao pleaded guilty to violating the Bank Secrecy Act and causing a financial institution to violate the BSA, according to another filing. His fine will be credited against the amount he owes the Commodity Futures Trading Commission, the U.S. Department of Justice said. "Binance employees knew and discussed that the company was serving thousands of users in sanctioned countries, and they knew that facilitating transactions between U.S. users and users in sanctioned countries would be in violation of U.S. law. But they did it anyway," Attorney General Merrick Garland said during a press conference on Tuesday afternoon. The $4.3 billion Binance is paying is among the largest penalties ever obtained from a corporate defendant, Garland said. The exchange's overall fine remains $4.3 billion, with some amount being credited to each agency. Separately, the U.S. Treasury Department and CFTC announced their own settlements with Binance. Treasury Secretary Janet Yellen noted that Binance's settlement with her department's money laundering and sanctions watchdogs was the largest in Treasury history. Under the terms of its plea, Binance will have to appoint an independent compliance monitor for three years and report its compliance efforts to the U.S. government, alongside the fines. Zhao is prohibited from "any present or future involvement in operating or managing" Binance, though that ban ends three years after the monitor is appointed. A resolution of the Binance case represents another major U.S. government victory against a big crypto player, coming just weeks after FTX founder Sam Bankman-Fried was found guilty of fraud and conspiracy charges tied to his crypto exchange. Zhao "prioritized Binance's growth, market share and profits over compliance with" U.S. banking regulations, according to unsealed filings. "Better to ask for forgiveness than permission," he told his employees, the document said. That mindset pervaded Binance's operations in what Zhao termed the U.S. "Grey zone." He saw to it that Binance did not collect "know-your-customer" information on its users because he believed it would inhibit its growth and appeal. Such oversights put Binance at risk of breaking multiple U.S. laws, including sanctions rules. According to the court filings, Zhao's staff warned him that the exchange was servicing users from sanctioned countries. Binance's response In a blog post, Binance acknowledged the "resolutions" it reached with the various agencies named, saying the exchange has worked to restructure over the past few years and citing its "new leadership ... with deep compliance experience." "We are confident that Binance will emerge as a stronger company as we lay the foundation for the next 50 years," the blog post said. Teng, the new head of the exchange, said Binance still has around 150 million users and thousands of employees. "My focus will be on: 1) reassuring users that they can remain confident in the financial strength, security and safety of the company 2) collaborating with regulators to uphold high standards globally that foster innovation while providing important consumer protections 3) working with partners to drive growth and adoption of Web3," he said in a tweet. Zhao said he may engage in passive investing or being a minority shareholder in different projects, as well as look at decentralized finance (DeFi) more. 'Significant' action The DOJ announced early Tuesday it would hold a press conference to announce what it described as "significant cryptocurrency enforcement actions," with Garland, Yellen, Deputy Attorney General Lisa Monaco and CFTC Chairman Rostin Behnam. During the press conference, Monaco said Tuesday's action "sent an unmistakable message to crypto and DeFi companies." Each of the officials mentioned Binance's alleged violations, which include poor anti-money laundering procedures. "Over five years while building a business with U.S. customers, Binance enabled nearly $1 billion in illegal payments involving sanctioned countries and individuals," Monaco said. Bloomberg, which first reported that Tuesday's press conference would be about Binance, reported on Monday that Binance could settle the DOJ's charges with a $4 billion fine and a deferred prosecution agreement. Reuters later confirmed the announcement would detail the DOJ's deal with Binance. The Wall Street Journal first reported Zhao would step down. Binance's BNB token recently dropped 4.6%. https://www.coindesk.com/policy/2023/11/21/binance-to-settle-charges-with-us-doj-source/

2023-11-21 15:15

Tether said Monday it froze $225 million of its USDT stablecoin in light of DOJ investigations. The U.S. Department of Justice (DOJ) said it seized $9 million worth of the tether (USDT) stablecoin linked to an organization that exploited victims through a "pig butchering" scam. The seizure comes after agents and analysts from the U.S. Secret Service traced victim deposits that were laundered through several cryptocurrencies, a technique the DOJ described as "chain hopping" in its release Tuesday. Tether froze $225 million worth of its stablecoin on Monday following a collaborative investigation between the DOJ, crypto exchange OKX and Tether itself. Pig butchering is a scam that involves luring victims in with traditional romance scams. The victims are often requested to send cryptocurrencies overseas. "This seizure should also serve as a reminder to cybercriminals that, although the current landscape of the cryptocurrency ecosystem may seem like an ideal way to launder ill-gotten gains, law enforcement will continue to develop the expertise needed to follow the money and seize it back for victims,” the DOJ said. https://www.coindesk.com/policy/2023/11/21/tether-worth-9m-tied-to-pig-butchering-scams-is-seized-by-us-doj/

2023-11-21 10:32

The minutes of the Nov. 1 Fed meeting may be outdated, given the post-meeting softness in economic data and resulting expectations for renewed interest-rate cuts in 2024. The minutes of the Nov. 1 Fed meeting might look outdated and potential hawkish commentary may not affect markets, including bitcoin. Post-meeting weakness in U.S. economic data has convinced traders that the Fed's rate-hike cycle has ended. The minutes of the Federal Reserve's November meeting, a closely watched record offering clues about the direction of monetary policy and its potential impact on the economy and markets, will be made public at 19:00 UTC (14:00 ET). At the Nov. 1 meeting, the Fed kept the benchmark interest rate steady in the range of 5.25% to 5.5%, having last lifted it in July. During the post-meeting press conference, Chairman Jerome Powell said the persistent strength in the labor market and consumer spending may warrant more liquidity tightening, a bearish prospect for risk assets such as cryptocurrencies. While the minutes due later today are likely to take a similar line, they may not elicit a reaction from financial markets. That's because weak U.S. economic data released since the meeting have bolstered expectations the central bank is done raising rates. In other words, the November meeting minutes may simply be outdated. Release of the minutes "is likely to be less market-moving than usual, given the post-meeting softness in data," analysts at ING said in a Nov. 17 note to clients. "We have already heard from several Fed officials who have welcomed the direction of the numbers but commented that they want to see more of the same to be sure that inflation is on the path to 2%." The Labor Department's employment report released Nov. 3 showed that job creation slowed to 150,000 jobs in October from 297,000 in September. The jobless rate rose to 3.9% while wage growth, measured by average hourly earnings, softened, signaling continued disinflation ahead. Data released last week showed the U.S. consumer price index grew a slower-than-expected 3.2% year-on-year in October, down from 3.7% in September. Since then, according to Fed funds futures, traders have brought forward expectations of interest-rate cuts to May. Bitcoin is known to closely follow changes in fiat liquidity conditions. Some observers, including Citi, agree the November meeting minutes are dated but say comments on the recent easing of financial conditions or availability of funding in the economy warrant attention. Tighter financial conditions affect households' and firms' saving and investment plans and weigh on economic growth and risk assets. Easy conditions have the opposite effect. The recent easing in financial conditions runs counter to the Fed's effort to contain inflation with tighter policy and may see the Fed add hawkish commentary to the minutes. "Minutes from the November FOMC meeting may be most revealing regarding Fed officials' attitude toward financial conditions," Citi analysts wrote on Nov. 19. "In October, Chair Powell and his colleagues argued that higher 10-year Treasury yields would substitute for further policy rate hikes. But as financial conditions have loosened, the response has been asymmetric, with little push-back against lower rates and higher equity prices." "Minutes are compiled after the meeting, meaning officials might include some hawkish hints that conditions will need to remain tighter-for-longer to bring inflation lower," the analysts added, while noting the market reaction may be limited. Credit Agricole U.S. economist Nicholas Van Ness voiced a somewhat similar opinion. "Given that financial conditions have eased somewhat following the meeting, this could mean some pushback from Fed speakers going forward against market pricing showing nearly 100bp of easing in 2024," he wrote in a Nov. 17 note. Bitcoin traded little changed around $37,300 at press time, according to CoinDesk data. https://www.coindesk.com/markets/2023/11/21/fed-minutes-release-may-be-a-non-event-for-bitcoin/

2023-11-21 10:11

Ether (ETH) lost 0.5%, while dogecoin (DOGE) and solana (SOL) slumped as much as 5% as traders likely took profits. Bitcoin (BTC) prices were little changed in the past 24 hours while major tokens gave back gains from their early November rallies. BTC traded just over $37,500 in European morning hours Tuesday, adding 0.6%. Ether (ETH) lost 0.5%, while dogecoin (DOGE) and solana (SOL) slumped as much as 5% as traders likely took profits. BNB Chain’s (BNB) tokens were up as much as 8% amid reports that crypto exchange Binance, which initially issued the tokens, could soon be paying $4 billion to settle multiple U.S. criminal charges. Some traders expect bitcoin to trade sideways in the coming weeks as its recent rally is running into headwinds caused by uncertainty about the Federal Reserve’s next steps and due to delays in a key regulatory decision about ETFs. “The upside has been suppressed at the $38,000 psychological level,” analysts at the Japanese exchange bitbank led by Yukari Kusu shared in a Tuesday note. “One of the reasons why bitcoin failed to breach that level is the SEC’s decision to postpone its decision to approve or disapprove Hasdex’s bitcoin ETF on Thursday.” Meanwhile, analysts at crypto exchange Bitfinex said in a Tuesday note that they expected the Fed to hold rates steady in the December meeting. “Headline inflation has declined remarkably from 6.4 percent at the beginning of the year. This should give the Fed enough room to hold rates steady in its December meeting, in line with current expectations in the Fed Futures market,” the analysts shared. “This would also align with its goal of sustaining economic expansion.” “However, this pause in rate hikes doesn't signal a change in the Fed's broader tightening policy. The central bank remains cautious and ready to adjust rates if inflation persists or unexpectedly increases,” they added. Interest rate decisions have the tendency to move markets. Higher rates usually mean risk assetss such as stocks and cryptocurrencies take a hit as investors could take profits and invest in bonds. https://www.coindesk.com/markets/2023/11/21/bitcoin-faces-headwinds-as-etf-optimism-stalls-doge-sol-give-back-gains/

2023-11-21 09:31

Tether deposited the funds with a subsidiary of investment bank Britannia Financial, according to the report, which cited filings made in the High Court. Stablecoin issuer Tether deposits of more than $1 billion with a financial services firm are at the center of a legal battle in London's High Court, the Financial Times reported on Tuesday. Tether deposited the funds with a subsidiary of investment bank Britannia Financial, according to the report, which cited filings made in the High Court. Britannia Financial is engaged in a legal dispute with British Virgin Islands-registered Arbitral International, which alleges that Britannia failed to pay the full price for a Bahamas brokerage it bought from Arbitral in June 2021. Arbitral says it is entitled to extra money from assets generated by the business in the year following the sale, according to an agreement between the two firms. According to the report, Britannia claims that Tether deposited the funds with its subsidiary, Britannia Global Markets, and the transaction is therefore unrelated to the brokerage it bought from Arbitral. Tether's USDT is the world's largest stablecoin, providing crypto users with a hedge against the volatility that often besets cryptocurrencies. Tether's $86.4 billion worth of assets are mostly deposited in U.S. Treasuries. The assets also include $5.2 billion worth of secured loans. Tether did not immediately respond to CoinDesk's request for comment. Read More: U.S. Bill Proposes Outlawing Government Use of China-Made Blockchains and Tether's USDT https://www.coindesk.com/business/2023/11/21/tether-deposits-of-1b-with-uk-financial-firm-are-at-center-of-high-court-battle-ft/