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Overview of the topics

• Crypto Highlights: The US affiliate of crypto firm Binance has recently conducted a round of layoffs following allegations by regulators.
• Social Data: Binance, the world's largest crypto exchange, has been accused of mishandling funds and violating US securities laws.
• Onchain Data: Changpeng Zhao claimed that Binance's outflow just after the lawsuit, on June 9, was approximately $392 million.
• Financial Data: Bitcoin experienced a notable price increase, rising from $25,000 to nearly $27,000 over a two-day period.
• Deep Dive: $1.2 million worth of Bitcoin that had remained untouched for over 13 years was moved.

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Crypto Highlights

Binance is loosing 20% of its employees

The US affiliate of crypto firm Binance has recently conducted a round of layoffs following allegations by regulators that it violated securities laws and a subsequent asset freeze request.

In particular, the management team of Binance.US found themselves faced with a difficult decision. They received explicit instructions from the board to streamline operations, reduce costs, and shrink the size of teams within the company.

With this respect, approximately 50 employees had been affected by the recent round of layoffs. Among those were workers of the legal, risk, and compliance departments of Binance.US. Since its workforce is around 500 employees, the layoffs accounted for roughly a 10% reduction.

Nevertheless, senior executives of the company had addressed rumors of a global workforce reduction of around 20%: approximately 1,600 employees out of their 8,000-strong workforce. Binance's CCO Patrick Hillmann classed these staff cuts as talent density audit, but is it really so?

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Social Data

Binance versus SEC: what happened?

In a lawsuit filed by the US Securities and Exchange Commission, Binance, the world's largest cryptocurrency exchange, and its founder Changpeng Zhao have been accused of mishandling funds and violating US securities laws.

The lawsuit, filed in a federal court in Washington DC, outlines 13 charges against Binance, including the commingling and the diversion of customer assets to an entity owned by Zhao called Sigma Chain. Binance, founded by Zhao as a Cayman Islands limited liability company, faces charges similar to those revealed after the collapse of the second largest crypto exchange, FTX, in the previous year.

According to the lawsuit, Binance's owners were aware of the alleged legal violations. In fact, it includes a statement where Binance's Chief Compliance Officer admitted to another compliance officer that they were operating as an unlicensed securities exchange in the US. With this respect, the Chair of SEC, Chair Gary Gensler, said that Zhao and Binance engaged in deceptive practices, conflicts of interest, lack of disclosure, and deliberate evasion of the law.

Gensler warned the public to be cautious about investing their assets with or on these unlawful platforms. Binance responded to the lawsuit in a social media post, stating that it had been cooperating with the SEC's investigation but criticized it for choosing to act unilaterally. The company expressed its intention to vigorously defend its platform, claiming that the SEC's refusal to engage productively and to provide clarity and guidance to the digital asset industry is another example of its misguided approach.

This lawsuit comes after the collapse of FTX, which faced similar allegations of co-mingling customers' funds and making high-risk investments without their knowledge. The founder of the firm, Sam Bankman-Fried, was charged with money laundering, fraud, and securities fraud by US prosecutors and the SEC in December. His criminal trial is expected to take place in the fall.

According to Cory Klippsten, CEO of Swan Bitcoin, the complaint of the SEC against Binance echoes the claims that many in the crypto communities have made against Zhao for years. He suggests that these practices have been open secrets in the industry, hence the charges themselves may not come as a surprise to those involved.

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Onchain Data

In 7 days Binance lost $2.36 billion

Despite data indicating increased outflows of crypto assets from Binance over the past week, Binance CEO Changpeng Zhao (CZ) suggests that the situation may not be as alarming as it appears.

Nansen's data shows a net outflow of $2.36 billion from Binance in the past 7 days, while Binance.US experienced an outflow of nearly $123.7 million. In truth, DefiLlama reports a figure of $3.35 billion in outflows from Binance, and Glassnode's data reveals that Binance's BTC balance reduced by 5.7% or approximately $1 billion in the past week.

However, CZ argued in a tweet on June 10 that some third-party analytics platforms may skew the outflow data by categorizing changes in assets under management as "outflow," including instances when cryptocurrency prices decline. He claimed that Binance's outflow just after the lawsuit, on June 9, was approximately $392 million.

CZ's statement implies that while there have been outflows from Binance, the scale may not be substantial. He aims to provide context by comparing the current outflow to a past event when a significantly larger amount was withdrawn from the exchange.

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Financial Data

But Bitcoin is continuing increasing…

Bitcoin experienced a notable price increase, rising from $25,000 to nearly $27,000 over a two-day period. Ethereum performed well too, as it reached $1,750, while many other altcoins also saw positive gains.

The cryptocurrency market was affected by the Securities and Exchange Commission's (SEC) lawsuits against Binance and Coinbase. Despite BTC not being mentioned in the filings, its value dropped to $25,400. Even if it made attempts to recover, reaching $27,400, the market remained bearish for the past week.

The decision by the Federal Reserve to pause raising interest rates, along with the US Consumer Price Index (CPI) numbers, initially had no significant impact on Bitcoin. However, shortly after the Fed's decision, Bitcoin's value plummeted from over $26,000 to a three-month low of under $24,800.

Positive news emerged from BlackRock, the world's largest asset manager, which filed for a Bitcoin Spot ETF in the United States. This news spurred a bullish response, with Bitcoin jumping significantly in value. Over the past 24 hours, Bitcoin reached $26,800 for the first time in over a week.

Bitcoin's market capitalization increased to $515 billion, and its dominance over other cryptocurrencies rose to 48% on CoinMarketCap (CMC). Altcoins, on the other hand, suffered more than Bitcoin, as they were described as unregistered securities in the SEC lawsuits.

After hitting a multi-month low of just over $1,600, ETH reacted positively and now stands at $1,750, representing a 4% increase in the past 24 hours alone. Binance Coin also experienced a significant decline, reaching a six-month low at $222.

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Deep Dive

Even Bitcoin whales are coming back

Recently, $1.2 million worth of Bitcoin that had remained untouched for over 13 years was moved. A whale transferred a total of 50 BTC to another wallet on Thursday.

In the past few months, there have been several instances of long-dormant Bitcoin wallets seeing activity. In April, a holder who had not accessed their cryptos for a decade moved $7.8 million worth of Bitcoin to new wallets.

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News of the week

• Banks: Japan, large banks to launch plan to attract investment in green transformation. [Read more]
• Technology: The AI boom has Silicon Valley on another manic quest to change the world. [Read more]
• Markets: The stock market scramble has left investors skittish despite the rally. [Read more]
• Investments: TikTok to invest billions of dollars in Southeast Asia amid growing scrutiny over data security. [Read more]

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About

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