Decentralized finance (DeFi) has been making waves in the financial sector, but the recent legal actions by the United States Securities and Exchange Commission (SEC) against centralized crypto exchanges Binance.US and Coinbase have led to a surge in DeFi trading volumes. While the SEC’s enforcement action against centralized exchanges has been grabbing headlines, the securities regulator is actively pursuing cases against the decentralized exchange (DEX) ecosystem as well.
Crypto venture capital firm, Paradigm, has slammed the SEC’s approach, reiterating that DEXs are not securities exchanges. The firm sent a letter to SEC Secretary, Vanessa Countryman, regarding the regulator’s proposed redefinition of the term “exchange” in the 1934 Securities Exchange Act, which, if accepted, would bring decentralized exchanges under its purview.
In another legal battle, a U.S. district court has dismissed a lawsuit against DeFi protocol, PoolTogether. According to the ruling, the federal court system is not the correct place to air concerns against the DeFi startup.
The DeFi market had a bullish start to June, but the momentum didn’t 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 U.S Securities and Exchange Commission’s (SEC) lawsuits against two leading centralized crypto exchanges Binance.US and Coinbase, have led to a surge in DeFi trading volumes over the past week. According to aggregated data from CoinGecko, 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. 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.
U.S. Federal Court Dismisses Lawsuit Against DeFi Platform PoolTogether
A U.S. district court has dismissed a lawsuit against the decentralized finance (DeFi) platform, PoolTogether. According to the ruling, the federal court system is not the proper 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.”
Paradigm Slams SEC’s ‘Incoherent’ Attempt to Police Decentralized Exchanges
Crypto venture capital firm, Paradigm, has slammed the SEC’s attempt to redefine the term “exchange” and bring decentralized exchanges under its purview. In a letter to SEC Secretary, Vanessa Countryman, the firm expressed its disagreement with the regulator’s proposed redefinition of the term exchange in the 1934 Securities Exchange Act. The firm reiterated that DEXs are not securities exchanges and criticized the SEC’s approach as incoherent.
Atomic Wallet Hack Losses Top $35 Million
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.
DeFi Market Overview
DeFi’s total market value saw a bearish decline this past week. Most DeFi tokens traded in the red, bleeding double digits. The total value locked in DeFi protocols fell below the $50 billion mark. Despite the decline, DeFi remains a dynamic and rapidly advancing space in the financial sector, with significant potential for growth and innovation.
In conclusion, DeFi’s growth and potential have attracted increasing attention from investors, regulators, and market participants. While the recent SEC lawsuits against centralized crypto exchanges Binance.US and Coinbase have led to a surge in trading volumes in the DeFi ecosystem, the legal battles against the DEX ecosystem are ongoing. Nevertheless, despite the recent decline in DeFi’s total market value, the industry remains dynamic, with significant potential for growth and innovation.