👮SEC Swoops: DeFi Week of June 4
Happy weekend Defiers!
It was a dramatic week for web3, with the U.S. Securities and Exchange Commission filing a lawsuit against Binance, the world’s largest centralized exchange, on Monday. The news drove a sell-off across the crypto markets, with BTC and ETH down 5% in 24 hours and BNB down 9%.
The SEC then took aim at Coinbase by suing the top U.S.-based exchange for allegedly violating the 1934 Securities Act. Coinbase responded that it will gladly fight the complaint, noting that the SEC allowed the firm to go public in 2021 after reviewing its business operations. Traders withdrew billions worth of crypto from both platforms in response to the news, with withdrawals slowing as the week progressed.
The case could have far-reaching implications for crypto and DeFi, with the SEC appearing to argue that its non-custodial wallet service functions as an unlicensed broker-dealer.
In another legal battle, prominent VCs ParaFi, Framework and 1kx have accused Curve Finance founder Michael Egorov of fraud. While litigation has been ongoing in Switzerland, Egorov believes the plaintiffs are trying to leverage the hostile regulatory climate in the U.S. by bringing a case in San Francisco.
The week also hosted big news for the decentralized stablecoin sector.
Aave launched a governance proposal outlining initial parameters for the launch of its highly anticipated GHO stablecoin to a bullish reception. If passed, GHO will be mintable against ETH deposits to Aave v3 and launch with an initial borrowing cap of $100M.
Curve now supports stETH for its crvUSD stablecoin, allowing users to use the leading liquid staking derivative as collateral. The new vault increased crvUSD’s debt limit by 15x to $150M.
Optimism, the second-largest Layer 2 network, also shipped its long-awaited Bedrock upgrade. The Optimism tech stack is now a modular and open-source framework, allowing developers to build bespoke L2s leveraging the technology.
And in this week’s podcast, Offchain Labs founder, Steven Goldfeder, explores solutions to the scalability challenges facing Ethereum right now, plus what’s next for Arbitrum.
📈 Markets in last 24 hrs:
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