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Mempool Clogged, Regulators Creeping, Binance Halting Withdrawals

A lovely weekend in cryptoland

Author

Nathaniel Whittemore
May 08, 2023

The Breakdown First Five - Friday May 5, 2023

5. Memecoin mania clogs the chain

An attack or an innovation? The recently launched Bitcoin memecoin standard, BRC-20 has jammed the chain and filled up the mempool, leading to sky-high fees and trouble processing transactions. Some Lightning companies are scrambling to deal with the new, high-fee paradigm while others celebrate the validation of the use case.

4. Binance Halts Withdrawals

Not once, but twice Binance halted Bitcoin withdrawals on Sunday, citing heavy network congestion and a need to modify their fee structure. They also announced that they’re working on lightning integration. On-chain analysts pointed out a massive $4.6B in withdrawals, the largest in the exchange’s history, leading to hot wallets emptying out. Real problems at Binance, or just more 4?

3. NYAG wants more power

New York Attorney General Letitia James launched a new Crypto bill which covers everything from audits to influencers. The sweeping bill would also force firms to separate out the functions of custodian and exchange. General opinion is that it is wildly over-broad, but at least it’s an actual proposal rather than a video about goldfish.

2. JPM predicts Short Selling Ban

How do you stop bank shares from plummeting? Ban the short sellers, of course! That’s what JP Morgan analysts anticipate will come next in the US regional banking crisis. Bank runs are no longer the problem, with PacWest coming under fire after seeing an increase in deposits. The issue is simply a lack of confidence that bank equity is a viable investment. The last time this was tried in 2008 it didn’t end so well…

1. Binance Sanctions violations?

Binance faces a DOJ probe into sanctions violations according to Bloomberg. The exchange has been insisting that they’ve cleaned up their compliance since 2021, but these allegations related to more recent Russia sanctions. With the legal problems still piling up for Binance, is the US becoming more trouble than it's worth?

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Thanks for reading -NLW