Bitcoin retreated on Thursday morning in Asia in a broad-based sell off that hit all the top 10 non-stablecoin cryptocurrencies and reversed the gains seen Wednesday amid the unfolding implications of the U.S. securities regulator this week suing two of the world’s biggest cryptocurrency exchanges, Binance and Coinbase. Cardano’s ADA token was the biggest loser, followed by Solana and Binance’s BNB.
Broad slide
Bitcoin slid 3.24% over the last 24 hours to US$26,300 at 7:00 a.m. in Hong Kong, reversing the gains seen on Wednesday. The world’s largest crypto by market capitalization has lost 3.21% over the past seven days, according to data from CoinMarketCap.
Ether dropped 2.81% in the same period to US$1,831, and logged a 2.01% weekly loss.
Cardano’s ADA was the biggest loser among the top 10, with an 8.88% decline, bringing its losses for the week to 14.06%.
Solana saw the second largest daily loss, down 8.82%. The BNB token issued by the Binance crypto exchange slid 8.46% for a drop of 15.69% for the seven days.
After the U.S. Securities and Exchange Commission (SEC) filed lawsuits against Binance and Coinbase earlier this week, Binance founder Changpeng Zhao was issued a summons by a U.S. court.
Zhao tweeted Wednesday that this was “just part of the SEC compliant process” and that he will not have to appear in court in person.
A main element of the SEC complaint is a listing of cryptocurrencies it regards as unregulated securities. Binance.US, the trading platform Zhao set up to serve U.S. clients, said Thursday morning in Asia that it will remove about 100 trading pairs on Friday midnight Hong Kong time. The pairs set to be scrapped from the platform include ATOM/BTC, MANA/BTC, FLOW/USDT and APE/USDT.
Binance.US has also suspended its over-the-counter trading portal, according to the statement.
Coinbase chief executive officer Brian Armstrong said Wednesday at the Bloomberg Invest conference in New York that Coinbase will continue running its crypto staking service and that the SEC’s lawsuit filed on Tuesday against the company was “not unexpected.”
“We are not going to wind down our staking services. As these court cases play out, it’s really business as usual,” Armstrong added. “We had many discussions within the last year when their [SEC’s] tone started to change. They started to come to us with more questions about the business, so we were very forthcoming.”
In another related development, the SEC was ordered on Tuesday by the U.S. Court of Appeals for the Third Circuit to respond to Coinbase’s pending petition for rule-making clarity within seven days. In April, Coinbase sued the SEC and requested the regulator publicly respond to the exchange’s July 2022 petition asking for clearer crypto regulation guidelines.
“We continue to believe that rules of the road, from legislation or rulemaking or both, must come before enforcement actions,” Paul Grewal, chief legal officer of Coinbase, tweeted on Wednesday. “That is why we petitioned the SEC for rulemaking nearly a year ago in the first place.”
Good news?
Alessio Quaglini, chief executive officer of Hong Kong-based digital asset custodian Hex Trust, said while the latest actions by the SEC may create short-term uncertainty and volatility, in the longer term, the market needs clarity on regulations.
“It’s an opportunity for the crypto industry to grow leaner, stronger and more compliant. Prior to this week’s events, the SEC’s enforcement actions have been chaotic, but their stance this week is crystal clear.”
Regulatory pressure that’s been mounting in the US has been redirecting firms to other jurisdictions where the landscape is clearer, he said.
“Positive progress has been made across Dubai, Hong Kong and Europe – but there’s room for improvement,” he said, adding that many of the industry’s problems of recent years could have been avoided with a clear and protective framework to properly segregate clients’ assets and operate transparently and legally.
(Updates with Good News? section.)
