DeFi volumes increase by 444% following Binance and Coinbase lawsuits.
Welcome to Finance Redefined, a weekly newsletter that provides you with essential insights into decentralized finance (DeFi) – the most significant developments from the past week.
The United States Securities and Exchange Commission (SEC) has filed lawsuits against two major centralized crypto exchanges, Binance.US and Coinbase, resulting in a surge in DeFi trading volume in the last week.
Although the SEC’s enforcement action against centralized exchanges has been in the headlines, the securities regulator is actively pursuing cases against the decentralized exchange (DEX) ecosystem as well. Paradigm, a crypto venture capital firm, has criticized the SEC’s approach, stating that DEXs are not securities exchanges.
In another legal battle, a U.S. district court has dismissed a lawsuit against DeFi protocol PoolTogether. The community behind the protocol had funded its legal defense through a $1.4 million non-fungible token (NFT) sale in 2022.
- Egorov, CEO of Curve Finance, sued by 3 DeFi-focused venture capital firms.
- ADA developer denies SEC’s claim that the token is a security.
- Stablecoin market cap drops, whales unaffected Santiment.
The DeFi market had a bullish start to June, but the momentum did not last long due to the SEC enforcement action in the second week. Most of the top 100 DeFi tokens traded in the red, with the total value locked falling below $50 billion again.
SEC crackdown on Binance and Coinbase surge DeFi trading volumes 444%
The median trading volume across the top three DEXs jumped 444% in the past 48 hours as crypto investors reeled from the SEC’s recent legal actions against centralized cryptocurrency exchanges Coinbase and Binance.
According to aggregated data from CoinGecko, total daily trading volumes on Uniswap v3 (Ethereum), Uniswap v3 (Arbitrum) and PancakeSwap v3 (BNB Smart Chain) – which account for 53% of the total DEX trading volume in the last 24 hours – increased by more than $792 million between June 5 and June 7.
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U.S. federal court dismisses lawsuit against DeFi platform PoolTogether
A United States judge recently dismissed a lawsuit against the decentralized finance (DeFi) platform PoolTogether. According to the ruling, the federal court system is not the correct place to air concerns against the DeFi startup.
U.S. district court Judge Frederic Block said that despite having genuine concerns about the startup, a lawsuit in a federal court is not “an appropriate way to address them. The judge also said that the plaintiff, Joseph Kent, does not have standing to pursue a lawsuit because he “suffered no concrete harm at the hands of the defendants.”
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Paradigm slams SEC’s ‘incoherent’ attempt to police decentralized exchanges
Crypto venture capital firm Paradigm has criticized the SEC’s attempt to redefine the term “exchange,” which, if accepted, would bring decentralized exchanges under its purview.
On June 8, the firm sent a lengthy 14-page letter to the SEC secretary, Vanessa Countryman, regarding the regulator’s proposed redefinition of the term “exchange” in the 1934 Securities Exchange Act.
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Atomic Wallet hack losses top $35 million, on-chain sleuth reports
At least $35 million worth of crypto has been stolen from Atomic Wallet users since June 2, according to an analysis from on-chain sleuth ZachXBT. The five largest losses account for $17 million. According to Atomic Wallet on Twitter, the cause of the attack is being investigated. Reports have surfaced of lost tokens, transaction histories being erased, and even entire crypto portfolios being stolen.
An independent investigation by pseudonymous Twitter ZachXBT, known for tracing crypto stolen funds and assisting hacked projects, found the largest victim lost $7.95 million in Tether (USDT). “Think it could surpass $50m. Keep finding more and more victims, sadly,” commented ZachXBT.
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DeFi market overview
DeFi’s total market value saw a bearish decline this past week. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bearish week, with most tokens trading in the red, bleeding double digits. The total value locked in DeFi protocols fell below the $50 billion mark.
Thank you for reading our summary of the most important DeFi developments this week. Come back next Friday for more stories, insights, and education on this rapidly evolving field.
