Need to know what happened in crypto today? Here is the latest news on daily trends and events impacting Bitcoin price, blockchain, DeFi, NFTs, Web3 and crypto regulation.
Crypto lender Genesis has announced that it will wind down its crypto trading services. Coinbase CEO Brian Armstrong says regulators should stop taking action against decentralized finance (DeFi) protocols and that DeFi should take the cases to court in order to set a precedent. Meanwhile, Three Arrows Capital founders Kyle Davies and Su Zhu have been handed a nine-year prohibition by the Monetary Authority of Singapore.
DCG-affiliated Genesis to wind down crypto trading
Digital Currency Group (DCG) subsidiary Genesis announced on Sept. 14 that it would wind down its crypto trading services.
According to a company spokesperson, Genesis will “voluntarily and for business reasons” halt its spot and derivative crypto trading services through its British Virgin Islands unit.
The move came shortly after Genesis Global Trading — another DCG-affiliated firm — confirmed it would eliminate crypto spot trading services beginning Sept. 18. It, too, said it was closing “voluntarily and for business reasons.”
Genesis Global Trading, an affiliate of Barry Silbert’s Digital Currency Group, will wind down its crypto spot trading service as of Sept. 18 for “business reasons” https://t.co/tMIvk1ubcG
— Bloomberg (@business) September 5, 2023
DCG entities have made headlines for all the wrong reasons since the onset of the crypto winter in 2022. Genesis blamed its collapse on Three Arrows Capital, the failed hedge fund headed by Kyle Davies and Su Zhu, and the downfall of FTX.
DCG is also the parent company of Grayscale Investments, which recently scored an important victory in its pursuit of a spot Bitcoin (BTC) exchange-traded fund.
Coinbase CEO champions DeFi, calls for court action to set legal precedent
Coinbase CEO Brian Armstrong has expressed his support for DeFi protocols. In a recent social media post, Armstrong urged DeFi protocols to consider legal proceedings in court to set a precedent, as the legal system has consistently demonstrated its dedication to upholding the rule of law. The current approach is mainly pushing a crucial industry toward overseas jurisdictions, he said.
According to his post on X (formerly Twitter), the Commodity Futures Trading Commission (CFTC) should avoid taking enforcement actions against DeFi protocols, as they do not function as conventional financial service businesses, and it’s questionable whether the Commodity Exchange Act is even applicable to them.
The CFTC should not be creating enforcement actions against decentralized (DeFi) protocols. These are not financial service businesses, and it’s highly unlikely the Commodity Exchange Act even applies to them.
My hope is these DeFi protocols take these cases to court to…
— Brian Armstrong ️ (@brian_armstrong) September 13, 2023
In the previous week, the CFTC took action against three DeFi companies for engaging in alleged unauthorized trading of cryptocurrency derivatives. According to the regulator, these platforms enabled the illicit trading of crypto derivatives without the necessary registration.
In addition to Armstrong, certain regulators have also shown their support for DeFi protocols. CFTC Commissioner Summer Mersinger underscored the importance of the CFTC concentrating on establishing transparent regulations for DeFi rather than swiftly resorting to enforcement measures. She voiced her apprehension that the commission appears to be leaning toward enforcement actions, whereas she believes that engaging with the public and setting clear guidelines should be the primary focus.
The CFTC recently achieved a legal triumph in a case against Ooki DAO — a decentralized autonomous organization — for operating an illicit trading platform and contravening other regulatory guidelines. In June 2023, a federal judge in the United States similarly ruled in favor of the CFTC, resulting in the closure of Ooki DAO and the imposition of a fine exceeding $600,000.
In recent months, cryptocurrency companies have encountered increased scrutiny from U.S. regulatory authorities. Notably, regulatory bodies such as the U.S. Securities and Exchange Commission have initiated investigations into major players, such as Coinbase and Binance.
Singapore’s central bank slugs Three Arrows founders with nine-year ban
Singapore’s central bank has issued nine-year prohibition orders to Kyle Davies and Su Zhu over violations of the country’s securities laws at the crypto hedge fund they co-founded, Three Arrows Capital (3AC).
In a Sept. 14 statement, the Monetary Authority of Singapore (MAS) said Zhu and Davies were banned from regulated activities during the prohibition period that started Sept. 13.
They also won’t be permitted to manage, act as a director or be a substantial shareholder of any capital market services business in Singapore.
In its decision to bar the pair, MAS said it found further securities law violations when it undertook further investigations into the bankrupt 3AC and its co-founders.
3AC was wiped out in last year’s crypto market crash triggered by the Terra ecosystem collapse, which exposed 3AC’s leveraged crypto positions to billions in loan defaults.
Last June — amid widely reported insolvency and a day before 3AC filed for bankruptcy — MAS reprimanded the hedge fund over providing it with false information, not telling the watchdog about Zhu’s and Davies’ directorship changes and exceeding the legal assets under management threshold.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
