Binance faced more regulatory challenges worldwide, particularly in the UK and Belgium, which increased the scrutiny on the exchange. Despite the ongoing regulatory issues in the crypto industry, there was a significant increase in institutional adoption of cryptocurrencies during the week as Mastercard and J.P. Morgan expanded their involvement in the field.
This wave of institutional adoption and renewed market confidence catalyzed the crypto marketโs recovery. Bitcoin (BTC), the flagship cryptocurrency, was resilient as it surged above the $31,000 mark, rallying to the highest level this year.
Binanceโs regulatory issues in the UK, Belgium, and Brazil
Being the worldโs largest exchange does come with its troubles. Binanceโs regulatory woes spilled into this week, with the company facing hurdles across several countries, including the U.K. and Belgium.ย
In response to increasing regulatory scrutiny worldwide, Binanceย withdrewย its registration in the U.K. Binance U.K. requested the cancellation of its registration with the Financial Conduct Authority (FCA). The FCA approved this request and revoked Binance U.K.โs licenses, stating that the firm is no longer authorized.
Belgiumโs Financial Services and Markets Authority (FSMA)ย took actionย against Binance this week, instructing them to suspend their crypto services within the country.ย
The FSMAโs investigation revealed that Binance was offering exchange and custody wallet services involving virtual currencies and legal currencies from non-European economic area (EEA) countries, violating Belgian regulations.ย
Moreover,ย reportsย from June 21 revealed that Brazilian authorities had summoned Binanceโs Brazil branch director, Guilherme Haddad Nazar, for questioning at the Pyramid Scheme CPI.ย
Binance is facing allegations of offering unauthorized derivative products in Brazil. Deputy Alfredo Gaspar expressed concerns about Binanceโs alleged involvement in pyramid schemes and its impact on Brazilian consumers. Nazar will answer questions on these allegations. Binance has expressed readiness to cooperate.
Forging aheadโฆ
Amid the regulatory concerns, Binance has continued to make efforts towards scaling through. In its defense against the Securities and Exchange Commission (SEC) lawsuit, Binance hasย engagedย the services of former Department of Justice (DOJ) prosecutor M. Kendall Day.ย
Day, who previously served as an acting deputy assistant attorney general within the DOJโs Criminal Division, brings a wealth of experience. Binance has been bolstering its legal team, including the recent addition of George Canellos, a former SEC enforcement official.
Binance, along with Binance.US and CEO Changpeng โCZโ Zhao, hasย lodgedย a motion accusing the US SEC of issuing โmisleadingโ statements in an ongoing securities lawsuit. The legal team contends that the SECโs press release on June 17 contained deceptive assertions, urging the SEC to abide by appropriate conduct.ย
The motion aims to prevent potential harm to Binance.US customers by averting confusion in the market. It would limit the SECโs ability to make impactful public statements regarding the lawsuit if approved.ย
This week, Binance.USย solvedย issues about USD withdrawals through successful collaboration with banking partners. Consequently, users can expect the expeditious processing of their USD withdrawals, typically within a standard timeframe of fewer than five working days.ย
However, Binance.US has issued a precautionary advisory, alerting customers to the banking associatesโ potential discontinuation of USD withdrawal services in the future.ย
Meanwhile, Binanceย disclosedย plans to expand its reach by launching a local cryptocurrency exchange in Kazakhstan, offering users a wide range of services, including fiat and digital currency transactions. The platform aims to have over 100 approved digital assets available by the end of 2023.
An uptick in institutional adoption
Binanceโs issues reflect the broader crypto industryโs regulatory challenges amid sustained uncertainty. Despite these hurdles, leading firms in various sectors continue to deepen their reach in the crypto scene. This week especially saw numerous developments in this regard.
French real estate giant, Apsys,ย expandedย its range of payment options by partnering with fintech company Lyzi. Through this collaboration, customers now have the opportunity to utilize cryptocurrency as a means of payment at Apsysโ shopping malls across France.ย
This move aims to cater to the evolving payment preferences of customers and embrace the increasing acceptance of digital currencies in the retail sector.
Animoca Brands, a digital property rights sector player,ย partneredย with Celo, an eco-conscious blockchain ecosystem. Their collaboration aims to propel the adoption of web3 technology, particularly in gaming, while emphasizing sustainability as a critical focus.
MUFG, a prominent Japanese banking giant, is currentlyย negotiatingย with multiple enterprises to explore the possibility of issuing stablecoins through its blockchain platform, Progmat. These digital assets, tied to foreign currencies like the U.S. dollar, could be deployed globally.ย
The German software firm SAP hasย joined handsย with Circle to explore cross-border payment systems using Circleโs USDC. By conducting tests on an Ethereum test network, SAP aims to address the complexities associated with international money transfers. The initiative aims to tackle high transaction costs, slow transfer speeds, and lack of transaction transparency.
Fidelity and WisdomTree eye BTC ETFs
Following BlackRockโs attempt, Fidelity, the third-largest global asset manager, isย reportedlyย exploring a bitcoin spot ETF or potential purchase of Grayscale as part of its foray into the crypto market.ย
With its expanding digital asset presence, Fidelity aims to switch from Grayscaleโs trust-based model by enabling bitcoin redemption, per rumors. However, challenges may arise, as Grayscaleโs previous legal battles with the SEC demonstrate.
US-based asset manager WisdomTree expeditiouslyย appliedย for a bitcoin exchange-traded fund (ETF), mirroring BlackRockโs recent action. WisdomTree aims to achieve a cost-effective approach while maximizing returns through its Bitcoin Trust. It utilizes independent valuation and physical storage of bitcoin assets.
J.P. Morgan and Mastercard deepen their reach in crypto
Investment bank J.P. Morgan hasย expandedย the capabilities of its blockchain payment system, JPM Coin. The bank now supports euro-based transactions for its institutional clients and the USD. This move demonstrates J.P. Morganโs commitment to integrating blockchain technology into its conventional banking operations.
Mastercardย submittedย a new crypto-focused trademark application. The application reveals their intention to develop specialized software for optimized Bitcoin and blockchain transactions and simplify crypto-based transactions.ย
In addition,ย reportsย from June 22 suggested that Mastercard is bolstering its โEngageโ initiative to prioritize integrating crypto assets. The program expansion facilitates strong connections between card issuers and potential partners with the necessary technical expertise, expediting the introduction of crypto credit cards.ย
Deutsche Bank and FIFA dive into cryptoย
Deutsche Bankย appliedย for regulatory approval for digital asset custody services. The bank aims to diversify revenue streams and enhance its corporate banking unit. David Lynne, head of Deutsche Bankโs commercial banking division, confirmed the application. According to a Bloomberg report, the institutionโs expansion into the digital asset and custody business.
Football governing body FIFAย filedย metaverse-focused trademark applications. As part of its โWE AREโ initiative, the applications underscore FIFAโs growing interest in utilizing virtual reality (VR) in various gaming, fashion, and entertainment sectors.
Bitcoin towers over $31,000 amid market recovery
Amid the increasing interest from global companies, the crypto market staged a recovery this week. As of June 19, on-chainย dataย suggested that selling pressures on bitcoin (BTC) and ethereum (ETH) investors had drastically decreased. Further data revealed a looming accumulation trend.
The previous week was especially unfavorable to the market, leading to shocking lows and angst among investors. Leading price-tracking platform, CoinGeckoย confirmedย this week that the market downturn, which spilled into the new week, was triggered by the SECโs charges against Binance and Coinbase.
However, as institutional interest surged, a renewal of investor confidence propelled a comeback. Bitcoin embarked on a rally, carrying along the rest of the market. On June 21, BTCย soaredย to a high of $28,800, setting sights on the $29,000 level. This came up when the number of long-term holders reached an all-time high.
On June 21, BTC eventuallyย conqueredย the $29,000 mark and broke above the $30,000 mark at the back of increasing whale accumulation. Sustenance of the rally saw BTC reclaim the $31,000 level on June 23. The asset hit a yearly high of $31,431 before facing opposition.
