It Wasn't Exactly the Best Week for Crypto

Written by:
Aaron Goldstein
Published on:

You know things are bad when your favorite cryptocurrency exchange is emailing the latest news....and it's mostly all bad.


SEC Sues Kraken for Running Unregistered Securities Exchange

On Monday, the Securities and Exchange Committee (SEC) sued crypto exchange Kraken, alleging that it operated as an unregistered securities exchange and created a “significant risk” by commingling customer crypto deposits with its own corporate assets.

The lawsuit in San Francisco federal court is the latest step in SEC Chair Gary Gensler's push to bring cryptocurrency under his agency's purview, by contending that digital assets are investment contracts subject to federal securities laws.

Kraken was also accused of having deficient internal controls and inadequate record keeping.

In its statement, Kraken said the SEC complaint conceded that any alleged "commingling" amounted to "no more than Kraken spending fees it has already earned."

Binance CEO Out

Well, if the SEC suit against Binance is any indication, Kraken executives are likely freaking out just a bit.

On Tuesday, the world's largest bitcoin exchange agreed to a $4.3 billion fine to resolve federal criminal charges in the US. A number of the same accusations lodged against Kraken, such as co-mingling of accounts, were also raised against wow-former CEO Changpeng Zhao “CZ” and Binance, a company our friends at CoinGeek once referred to as "terrorist financiers".

The charges against "CZ" and his firm included sanctions violations, running an unlicensed money transmitter business, and failing to maintain an adequate anti-money laundering (AML) program.

Binance must now exit the U.S. market and Zhao had to step down from his role as CEO.

Tether Freezes $225 Million in Coordination With DOJ

Also on Monday, it was announced that Tether, the issuer of the largest stablecoin, USDT, had frozen $225 million of USDT following a DOJ investigation into an international human trafficking ring based out of Southeast Asia.

CoinDesk Crypto News Site Sold to Crypto Exchange

Perhaps not as big a conflict of interest as ESPN getting into the sports betting industry with ESPN Bet all the while offering "winning" sports picks and reporting on competitor DraftKings voiding bets, it's still another news site being swallowed up by one of the companies it's supposed to report on. 

Coindesk, a leading crypto news site that first reported on the FTX balance sheet shortfall, was purchased by crypto exchange Bullish for an undisclosed all-cash amount. Coindesk was previously owned by crypto company Digital Currency Group (DCG).

Bitcoin Price Surge Not Really Impacted

All things considered, Bitcoin's price was relatively stable on Wednesday.  It only saw less than a 1 percent decline over the past week, currently sitting at $37,300.

- Aaron Goldstein,

Business/Financial News

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