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The latest price moves in bitcoin (BTC) and crypto markets in context for June 29, 2023. First Mover is CoinDesk’s daily newsletter that contextualizes the latest actions in the crypto markets.

Lawmakers wanted to see a 7% rate for crypto held longer than a year

Implementation of blockchain technology will accelerate as the opportunity cost of uncaptured efficiencies increases, the report said.

BaFin, Germany’s financial regulator, has reportedly denied Binance’s application for a custody license. Binance also announced that Paysafe, its banking partner for euro deposits and withdrawals, will end support from September.

BaFin’s denial was reported by the news publication FinanceFWD yesterday. However, the report said it remained unclear whether it was a formal decision or an intention to deny, citing people familiar with the matter.

“While we are unable to share details of conversations with regulators, we continue to work to comply with BaFin‘s requirements. As expected, this is a detailed and ongoing process. We are confident that we have the right team and measures in place to continue our discussions with regulators in Germany,” a Binance spokesperson told The Block in an emailed statement. 

Meanwhile, Binance’s current euro banking partner, Paysafe, will cease supporting the crypto exchange after September 25, according to a notification for users, CoinDesk first reported.

Paysafe’s decision follows a strategic review, Bloomberg reported, and will impact euro-denominated bank transfers to and from Binance through the Single Euro Payments Area (SEPA) network. Paysafe already ended GBP support for the exchange in May.

“Binance will be changing the provider for EUR deposits and withdrawals via Bank Transfer (SEPA). Our current partner, Paysafe, will no longer be providing these services to Binance users from September 25, 2023,” the Binance spokesperson said.

Binance assured customers that no other fiat currencies were affected or any other products or services on Binance.com. “In the meantime, all methods of depositing and withdrawing other fiat currencies as well as buying and selling crypto on Binance.com remain unaffected, including bank transfer using one of the other fiat currencies supported by Binance, and buying and selling crypto directly via credit or debit card,” the spokesperson said.

From September 25, “users will need to update the banking details used to deposit to their Binance accounts and may be required to accept new terms and conditions to continue using SEPA services after this date,” Binance’s spokesperson added.

Binance’s regulatory woes

Earlier this month, Binance announced it was exiting the Netherlands after failing to acquire regulatory approval. It also applied to deregister its local entity in Cyprus and is reportedly under investigation in France for alleged money laundering. 

Binance also deregistered its non-operational UK-based entity and Belgium’s financial regulator ordered Binance to stop services in the country. Most recently, Binance also withdrew its license application in Austria, FinanceFWD reported on Monday.

“Binance remains committed to working collaboratively with regulators around the world and we are additionally focused on getting our business ready to be fully compliant with the new EU rules on crypto-assets (MiCA),” Binance’s spokesperson said.

The regulatory issues in Europe are likely stemming from the pressure the exchange is facing in the U.S. Binance and its CEO Changpeng Zhao are facing a lawsuit from the SEC in the United States, alleging that the exchange violated U.S. securities laws, with resepect to unregistered securities offerings and commingling of customer funds. Binance’s native BNB cryptocurrency has fallen over 20% since the lawsuit was announced, according to CoinGecko data. Coinbase also faces a lawsuit from the SEC.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The firm today launched a tool to allow for limitless information and liquidity transfers between Solana and EVM-based blockchains.

Ankex, a non-custodial exchange with a centralized order book, is being spun out of crypto custody firm Qredo, which Moro joined in January.

The native token of decentralized finance protocol Compound (COMP) has surged by more than 50% in four days following a spike of volume and outflows on Binance.

Bitcoin is trading flat as investors digest fresh restriction rhetoric from the Fed’s Jerome Powell.

The world’s largest digital asset by market capitalization is caught in a bind between enthusiasm over recent institutional ETF filings and the Fed chair’s commitment to more rate hike cycles, expressed at the ECB Forum in Portugal.

“Policy hasn’t been restrictive enough for long enough,” Powell told the annual gathering of central bankers hosted by the ECB in the Portuguese resort of Sintra. “I wouldn’t take moving in consecutive meetings off the table at all,” he added.

On Thursday, the world’s largest digital asset by market capitalization was trading at $30,408 by 7 a.m. ET, up 0.4% in the past 24 hours, according to Coingecko. However, ether dipped 0.5% in the same period, trading at $1,848.

Despite leaders of the world’s top central banks reaffirming a commitment to further policy tightening, the Nasdaq managed a small gain on Wednesday. Investors appear to have priced in Powell’s comments in Portugal, and according to Quincy Krosby, chief global strategist for LPL Financial, “the economy can probably digest a 25 basis point rate hike.”

President of the Bitnomial Exchange Michael Dunn has observed recent bullish trading patterns on exchange data, saying that traders appear to be “taking advantage of the relatively low implied volatility in Bitcoin to place bets on a potential upside breakout.”

Speaking to The Block he added, “As a result, market makers are actively hedging their delta risk in the futures market, leading to a notable surge in open interest.”

Pending spot bitcoin ETFs

Youwei Yang, chief economist at BTCM, emphasized the crucial role of ETFs in enabling large entities such as pension and mutual funds to gain exposure to cryptocurrencies. “Facilitating money access and reducing friction through regulatory clarity are key factors in driving institutional adoption,” Yang told The Block.

Jeff Feng, co-founder of Sei Labs, said the recent ETF filing by Blackrock not only legitimizes bitcoin, but also applies pressure on its competitors. “Blackrock’s endeavor could also potentially apply pressure on major competitors, such as Vanguard, to respond in kind and could lead to blue ocean opportunities for future investment vehicles for retirement savings, given their substantial influence in this area,” he told The Block.

He added that only a small allocation from retirement accounts into bitcoin via these digital asset investment products could have a profound impact on its market dynamics.

Feng also noted the importance of MicroStrategy’s recent acquisition of over 12,000 BTC, raising its total holdings to more than 152,000 BTC. “MicroStrategy’s consistent investment strategy, even in the face of market volatility, highlights the emerging view by some corporations for utilizing Bitcoin as an asset for diversifying a company’s treasury,” he added.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Sam Altman’s Worldcoin has launched sign-ups for its World ID in Germany and has brought its “Sign in with Worldcoin” tool to Okta’s Auth0, one of the world’s largest authentication and authorization platforms.

The Auth0 integration is Worldcoin’s first extensive implementation of Sign in with Worldcoin, the project said Thursday. Sign in with Worldcoin is similar to common social single sign-ons — a system that allows users to access multiple applications or websites using just one set of login credentials.

The Auth0 integration means the thousands of apps that use Auth0 can now easily support Sign in with Worldcoin, Tiago Sada, head of product at Tools for Humanity, a technology company building tools for the Worldcoin project, told The Block. “Sign in with Worldcoin is designed to provide a secure, privacy-preserving way to access services and applications while preventing fraud and penetration of bots,” Sada said.

Worldcoin’s proof of personhood

Users get to retain more privacy because when they Sign in with Worldcoin, a zero-knowledge proof (ZKP) is generated on their device, attesting their “proof of personhood” without revealing any unnecessary personal information, Worldcoin said. Proof of personhood, in turn, helps prevent fraud and bots, it added.

Sada gave an example of an app building an integration that will require Sign in with Worldcoin to purchase concert or event tickets. With proof of personhood, artists can help ensure that tickets go to fans, not bots or larger ticket purchasing systems that want to purchase the tickets and resell them at a higher price. “The implementations and applications for Sign in with Worldcoin are limitless and it is exciting to see what developers have built to date,” Sada said.

The Auth0 integration is connected to World ID, a protocol that helps users provide a digital passport to prove they are unique and real people while remaining anonymous. The World App can be used to create a digital passport or World ID, which can be optionally verified with a phone number or biometrics using “Orb,” a biometric imaging device developed to prove personhood.

Orb is designed, engineered and manufactured in Germany and the launch of World ID sign-ups in the country means residents can prove their humanness through Worldcoin.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto exchange Coinbase filed a motion to dismiss the recent lawsuit lodged against it by the U.S. Securities and Exchange Commission (SEC).

The lawsuit alleged that Coinbase facilitated unregistered trading in 12 digital tokens that were deemed securities. The claim has been hotly contested by the exchange in its latest response.

The company argued that the SEC was applying securities laws to certain digital tokens in ways that significantly deviate from existing legal frameworks. Paul Grewal, Coinbase’s chief legal officer, stated that the SEC’s claims “go far beyond existing law” and should, therefore, be dismissed.

In a legal document filed on Thursday with the U.S. District Court for the Southern District of New York , Coinbase raised concerns about the SEC’s interpretation of securities laws, suggesting the agency was reaching beyond its legal authority.

Filing a motion to dismiss underscores Coinbase’s determination to challenge the SEC’s lawsuit. A motion to dismiss argues that even if all the allegations in the lawsuit are true, the plaintiff does not have a valid legal claim.

“Even if the SEC were correct that the assets and services it identifies are within the scope of its existing regulatory authority, this [legal] action must be dismissed on independent grounds that it violates Coinbase’s due process rights and constitutes an extraordinary abuse of process,” Coinbase’s legal team stated in the filing.

Coinbase claims assets in question are not securities

As a U.S. government agency, the SEC requires that any platform facilitating the trading of assets, which it defines as securities, must register with it.

SEC’s definition of a security includes investment contracts, which have been interpreted by the Supreme Court in the Howey Test to include transactions where individuals invest money in a common enterprise and expect profits primarily from the efforts of others. In its suit, the SEC named 12 crypto tokens as securities, including SOL, ADA, MATIC, SAND, FLOW, ICP, NEAR and DASH.

In the Thursday filing, Coinbase claimed that the digital assets in question are not securities. “None of the assets the SEC has now identified are in fact securities, and for that and other reasons, secondary transactions in those assets are also not securities,” it stated.

The legal document further noted what the company described as inconsistencies in the SEC’s decisions, emphasizing that the SEC had not raised objections to six of these tokens in their previous dealings with Coinbase in 2021.

The exchange’s lawyers further argued that in 2021, the SEC declared Coinbase’s registration statement with the commission effective, thereby permitting the company to sell its shares to investors when it went public.

The approval followed an extensive review process that spanned several months and involved in-depth discussions with Coinbase. The registration approval allowed Coinbase to trade more than 240 tokens on its spot exchange, including six of the 12 tokens now under dispute.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.