The Binance US Barrage Continues

Plus the NYDFS reduces the whitelist of acceptable cryptos

Author

Nathaniel Whittemore
September 19, 2023

The Breakdown First Five - Tuesday September 19, 2023

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. Suing the Parents

SBF’s parents have been sued by the FTX estate to claw back “misappropriated funds.” The court has been asked to force Joseph Bankman and Barbara Fried to hand back the keys for a $16.4M Bahamas mansion and a cash gift of $10M, among other claims. FTX are also asking for punitive damages in light of "conscious, willful, wanton, and malicious conduct." They said the pair did not act to help FTX but rather to “plunder it in order to enrich themselves.”

4. Binance Clamps Down on Market Manipulation

The Binance blog published a case study of the infamous Mt Gox ‘Willy Bot’ to highlight their market manipulation prevention program. Shortly after the article was shared to Twitter, Bitcoin open interest skyrocketed alongside a 3% price pump. Most of the move quickly retraced but Bitcoin remained green late into the evening. Lucky the hawkeyed Binance Market Surveillance Team are on the case.

3. Citibank Tokenizing

Citibank will launch a pilot program to tokenize customer deposits and launch a custody service for fractionalized bonds. The tokenized deposits will use a private blockchain operated by the bank but will be capable of instantaneous global transfers. The pilot aims to meet the needs of institutional clients who require 24/7 cross border payments.

2. NYDFS Slashes Greenlist

The NYDFS have published proposed guidelines for crypto firms operating under the Bitlicense. The proposals center on “enhanced criteria for coin-listing and delisting procedures” and a system for designating tokens on the regulator greenlist. The list, which allows exchanges to offer tokens without additional regulatory hurdles. The list once named 18 non-stablecoin tokens including DOGE & LTC, but now only allows Bitcoin & Ethereum. NYDFS wants public feedback.

1. Funds Are With Ceffu?

In a tense hearing, the SEC accused Binance.US of being evasive in relation to their custody system. They noted the story keeps changing about whether Ceffu, formerly Binance Custody, is their custody provider. The judge said “I think we need more than we’ve got right now” and that they couldn’t be “super confident” Binance.US had control over customer assets. They made no order and asked parties to negotiate further disclosure.

Thanks for reading -NLW