Five Things to Know in Crypto This Week: Binance Motion to Dismiss, CBDC Act, and Gary Gensler

Key Insights:

• SEC Chair Gary Gensler discussed cryptos and securities and the likely impact of a US government shutdown on market oversight.
• Binance Holdings Limited and CEO Changpeng Zhao filed a motion to dismiss in the SEC v Binance case.
• CBDC Anti-Surveillance State Act progressed to the House.

Binance Files Motion to Dismiss

On Thursday, Binance Holdings Limited and CEO Changpeng Zhao filed a motion to dismiss to the District Court for the District of Columbia. The Securities and Exchange Commission (SEC) filed 13 charges on June 5, including the operating of unregistered exchanges, broker-dealers, and clearing agencies.

The Thursday court filing requested the court to dismiss the SEC’s claims against Binance Holdings and Mr Changpeng Zhao (CZ). Significantly, the filing focused on the Howey test, investment contracts, and common enterprises. The defense team argued that the SEC failed to “plausibly allege that any of the crypto assets at issue is a security.”

Binance coin (BNB) was down 2.45% to $211.2 for the current week. In contrast, the total crypto market cap was flat at $1,033 billion.

Mt. Gox Delays Repayments until October 2024

On Thursday, Mt. Gox Trustees announced a delay to the deadline of the base repayment, early lump-sum repayment, and intermediate repayment to October 31, 2024.

The announcement was significant, with the markets sensitive to the impact of a surge in crypto for sale on the global exchanges.

Rumors and the news of the one-year delay supported a BTC return to $27,500 before succumbing to Fed monetary policy jitters. The total BTC balance across the Mt. Gox trustee wallets is 135,890.98 BTC.

BTC was up 0.22% to $26,593 for the current week.

Anti-CBDC Movement Gathers Momentum

Republican lawmakers targeted US government and Fed plans to launch a Central Bank Digital Currency (CBDC). On Wednesday, The House Financial Services Committee passed the CBDC Anti-Surveillance State Act to the Full House. Significantly, the Act requires Congressional authorization for the issuance of CBDCs.

Major Whip Tom Emmer stood behind the CBDC Anti-Surveillance State Act, warning about the government use of CBDCs as surveillance tools. Republican Ronny Jackson, on the same side of the aisle as Emmer, supported the Act, calling CBDCs a Trojan Horse.

SEC Chair Gary Gensler and Crypto Securities

SEC Chair Gary Gensler was back in the news this week. Despite the court ruling on XRP not being a security in Programmatic Sales, the SEC Chair continues to label cryptos securities. The SEC Chair spoke about the need for cryptos to abide by US Securities Laws, saying,

“The Securities Laws apply to crypto security tokens, and there’s nothing incompatible with those tokens.”

The SEC Chair also discussed the impact of a US government shutdown on the SEC and market oversight.

JPEX Raises Question Marks Over Hong Kong Crypto Hub Aspirations

Crypto platform JPEX grabbed the crypto headlines at the start of the week. Responding to Hong Kong investigating the platform for suspected fraud, JPEX suspended trading services on Monday. Social media influencers faced the wrath of law enforcement, with the HK police arresting Joseph Lam on suspicion of conspiracy to defraud.

JPEX reportedly paid influencers for making misleading statements to promote the platform. While JPEX had not registered with Hong Kong regulators, the latest crypto fraud case could raise eyebrows and question the Hong Kong bid to become a crypto hub.