What’s the deal with June in the crypto industry? This week I was going to write something totally different. Crypto has just experienced its first monthly loss in 2023. My thoughts revolved around the valuations of crypto, relative prices to indicators, and technical support levels.

My focus changed as I put pen to paper. (Or fingers to keyboards for accuracy.

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Imagine two neighbors who you thought were going to get along well arguing in front of your window. Then imagine the situation getting worse. This is how I would describe the recent developments between Binance and the U.S. Securities and Exchange Commission.

The dispute is between crypto entities, politicians and decentralized assets.

The regulators’ respite following crypto’s non-inclusion in the debt ceiling deal seems to have lasted for less than a full week.

On Monday, 6 June, news broke that Binance CEO Changpeng “CZ Zhao and the SEC were suing Binance for alleged securities violation.

The most damaging allegation, from my perspective, is that the customer funds were “combined” with other money.

According to the SEC filing, “Defendants had full freedom to transfer crypto and fiat investors’ assets at their discretion. They did so in some cases by combining and diversion.”

Binance has a vehement response to allegations. It states that “any claims that user assets have been in danger on the Binance.US platforms are simply false” and that “all assets of users on Binance, and Binance affiliated platforms including Binance.US. “Assertions that user assets on the Binance.US platform have ever been at risk are simply wrong,” and “all user assets on Binance and affiliate platforms including a href=”http://binance.us/” rel=”noopener” target=”_blank”>Binance.US/a>.”

The SEC doesn’t seem to care about the words “safe and secured” in this case. They seem to be more concerned with the word “separate.” If, for even a millisecond through the movement assets, any funds from a customer account touched an account owned by Zhao, the SEC would likely take Binance to task.

Binance may be in serious trouble if this were to happen. It seems fitting to use an old boxing analogy, given that crypto and regulators are in a very real fight.

On June 1, Senator Elizabeth Warren said that cryptocurrency is “helping to fund” the fentanyl trade . This signaled the reintroduction a Digital Asset Money Laundering Legislation, which “closes the loopholes.”

It will be fascinating to see how many jurisdictions around the world agree on what constitutes a loophole. The Q&A session between Warren and Assistant Treasury Secretary for Terrorist Finance Elizabeth Rosenberg suggests that both parties will seek international coordination in their fight against crypto.

The SEC press release on Binance seemed to be more personal in tone than procedural, with the use of “so called” to describe the BNB stablecoin and BNB token.

I am not blind to the irony in the timing, since June is the worst month for crypto investors.

The daily average return for June was ranked sixth out of all the months from 2014-2020. However, its returns between 2021-2023 are ranked last.

On June 13, 2022 the crypto lender Celsius frozen all withdrawals and transfers, citing “extreme conditions in the market.”

This tweet by Three Arrows Capital founder Zhu Su was sent almost exactly 48 hours after the previous one.

In June 2022, the result of this turmoil was a 37% drop in bitcoin (BTC), from nearly $32,000 to just $19,966, at one point falling as low as only $17,690. We now know, almost exactly one year later, that the SEC has taken action against Binance. The market’s reaction was noteworthy, as prices declined 5.4% with a volume higher than normal.

It would seem that the impact of each blow that bitcoin and cryptocurrency have taken in June has been softer. The price of BTC fell 16% on June 13, 2022. This is the worst day since 2021 for BTC. The 9.7% drop just a few weeks later, on June 16, is the 13th largest loss in the same time period.

The 5.4% drop following the SEC Binance case does not rank among the 50 worst performing days.

As each punch is thrown it would seem that the assets (i.e. bitcoin, ether, etc.) The entities that are being targeted have taken a big hit.

I’ve said it before and I will say it again: the majority of crypto-related issues revolve around the actors, not the assets themselves.

Digital assets are still a means to move money on the internet/blockchain without a third party.

As the battle between regulators, crypto and assets intensifies, the assets themselves will begin to withstand the impact better.

Nick Baker Here’s some interesting news:

  • JUXTAPOSITION Friday, the Republican chairmen of two House Committees published a proposal to overhaul crypto regulation. The “discussion draft,” which was meant to kick-start negotiations, was not a guarantee of widespread support. The industry had been calling for a comprehensive review of crypto regulations for many years. The U.S. Securities and Exchange Commission then went nuclear against Binance and Cobase days later. They sued both companies, claiming that the existing regulations were adequate and that these businesses are simply not allowed in the U.S. It seems that the direction of the political wind could affect the viability of crypto in the U.S.
  • ANTICRYPTO : Gary Gensler, SEC chair , wasn’t anti-crypto. His stance has certainly changed. said he did not need any more digital currency on CNBC. We already have digital money. Gensler stated that the U.S. Dollar is already digital currency. We have never seen in the past centuries that the economy and public needed more than one method of moving value.
  • BINANCE’S FUTURE When the SEC acts, so does the U.S. Department of Justice. There is speculation that the DOJ may be the next to go after Binance CEO Changpeng Zhao. Binance responded by stating that Richard Teng was a rising star on the exchange. One wonders if this is bait for a possible settlement: CZ steps aside and Teng takes the helm.
  • A BETS: Five year ago, when regulators barely paid attention, two prominent figures in crypto, Bitcoin maximalist Jimmy Song, and Ethereum cofounder Joe Lubin tentatively placed an bet. Lubin won if five Ethereum decentralized apps (dapps), which were agreed upon, reached the usage thresholds. CoinDesk journalists tried to determine who won, despite the fact that they never seemed to have finalized their agreement. In the article, the conclusion reads: “If Lubin won, it was a close call; there wasn’t much of a contest.” He might have lost, depending on who you ask.” This feels like a shock given the amount of attention and money thrown at dapps in recent years.

Nick Baker is the editor.