Binance Refutes Market Manipulation Allegations

The Breakdown First Five - Friday, May 10, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Nickel Says He Has The Votes

After Wednesday’s shock vote on SAB 121, the matter will go to the Senate. Democrat bill sponsor Wiley Nickel says there is a bipartisan majority in support of repealing the SEC accounting guidance. While removing the guidance would allow banks to custody crypto, the much larger impact is the undermining of the Administration’s crypto policy. With a Presidential veto already threatened, a successful Senate vote would force Biden to use it. 

4. CFTC’s Johnson to Treasury

CFTC Commissioner Kristin Johnson is expected to be nominated as Assistant Secretary for Financial Institutions within the Treasury. While the Democrat Commissioner is no crypto advocate, she has been outspoken on the need to engage with the industry in crafting regulations. Johnson had a front row seat for the FTX collapse via monitoring affiliated clearinghouse LedgerX. Could be a mixed bag at the recently hostile Treasury department. 

3. DCG Posts $229M Quarter

Digital Currency Group has reported 51% revenue growth year-on-year. Topline revenue of $229M was driven by $156M from Grayscale, healthy cash flow despite the draining of GBTC. The sale of Coindesk in November would have delivered a substantial one time boost, but the terms of the deal were still not disclosed to shareholders. Overhangs of the Genesis bankruptcy and related lawsuits remain, but the company remains a crypto behemoth. 

2. Prometheum Will Definitely Launch

Totally real exchange and not an SEC front operation Prometheum says they will absolutely still launch despite delays. The startup promised Ethereum custody in the first quarter but has missed that deadline, citing delays in technical work. Turns out that building a wallet system is even harder than coming in to register. They still won’t say if they have any clients, nor when the trading platform will launch. 

1. Binance Denies Market Manipulation

Binance has defended market maker DWF against whistleblower claims of market manipulation. The claim was that $300M of volume last year was just wash trading. Binance rejected the claim, stating that “we have a robust market surveillance framework that identifies and takes action against market abuse”. They said they have offboarded 355,000 users representing $2.5T of transaction volume over the past three years for violating terms of use.