Bitcoin recovered to above US$27,000 on Wednesday morning in Asia, with nearly all other top 10 non-stablecoin cryptocurrencies rebounding even as U.S. regulators this week launched a series of lawsuits against Binance and Coinbase, two of the world’s biggest crypto exchanges, alleging most tokens are unregistered securities. Polygon’s Matic token was the exception, dipping 1.7% in the past 24 hours.
Bitcoin, Ether bounce
Bitcoin rose 5.36% over the last 24 hours to US$27,118 at 6:50 a.m. in Hong Kong, bouncing back to the same price range before the U.S. Securities and Exchange Commission (SEC) filed the lawsuits this week. The world’s largest crypto by market capitalization was still down 2.32% over the past seven days, according to data from CoinMarketCap.
Ether climbed 4.01% in the past 24 hours to US$1,881, but logged a 1.32% weekly loss.
The meme coin Dogecoin led the winners this morning with a gain of 6.43%, edging out Bitcoin for the top spot. Polygon’s Matic missed out on the rebound, sliding 1.7% in the last 24 hours, and lost 9.39% over the past week.
Nick Ruck, chief operating officer of non-fungible token (NFT) intellectual property licensing firm ContentFi, told Forkast that while the flurry of lawsuits by SEC chair Gary Gensler hit hard, the crypto market has largely held steady.
“The initial panic quickly wore off as many traders not only expected the lawsuits, but apparently dismissed them entirely,” Ruck said. “A lawsuit may work against the SEC’s expectations when these cases are determined by court judges rather than Gary Gensler’s opinion.”
On Tuesday, just a day after the SEC sued Binance for alleged securities violations, the same regulator filed suit against Coinbase, the largest crypto exchange in the U.S., for allegedly breaching securities rules.
The SEC alleges Coinbase made billions of dollars unlawfully facilitating the buying and selling of crypto asset securities since at least 2019, according to its statement released Tuesday.
SEC Chair Gary Gensler tweeted Tuesday that Coinbase’s alleged failures “deprive investors of critical protections, including rulebooks that prevent fraud and manipulation, proper disclosure, safeguards against conflicts of interest, and routine inspection by the SEC.”
In response, Brian Armstrong, chief executive officer of Coinbase, tweeted that the company was “proud to represent the industry in court to finally get some clarity around crypto rules.”
Armstrong noted that the SEC reviewed Coinbase’s business and approved it to sell shares to the public in 2021. He added that the SEC and the Commodity Futures Trading Commission have made conflicting statements on crypto assets don’t agree on what is a security and what is a commodity.
Coinbase had argued back in April that the SEC’s attacks against Coinbase appeared to be undermining its own role as the approver of companies registering to sell shares to the public.
Coinbase shares dropped 12.09% at the close of U.S. trading on Tuesday, but rose 2.48% in after-hours trading.
In an additional action against Binance, the SEC on Tuesday asked a federal judge to freeze the assets of Binance.US, the crypto trading platform set up by Binance chief Changpeng Zhao to serve U.S. clients.
In response, Binance.US tweeted on Tuesday that user assets “remain safe and secure” and “the platform continues to be fully operational with deposits and withdrawals functioning as normal.”
Denys Peleshok, head of Asia at London-based multi-asset brokerage CPT Markets, said: “The SEC has had a very aggressive approach toward crypto companies for some time now and could be increasingly creating an unwelcoming environment for such firms and for the crypto industry as a whole in the country.”
Republican Senator Cynthia Lummis followed up on this theme in criticism of the SEC actions in a tweet on Tuesday.
“Real consumer protection requires creating a robust legal framework that exchanges can comply with, not pushing the industry offshore into the shadows.”