The U.S. Securities and Exchange Commission issued a Wells notice to crypto exchange Coinbase, a step that may lead to the SEC suing Coinbase or taking other enforcement actions against it.Coinbase said the SEC alleged the U.S.-based company may be operating in violation of securities laws in the running of its exchange and staking services. Coinbase now has an opportunity to respond to the SEC and possibly reach a settlement with the agency.
Coinbase CEO Brian Armstrong (CoinDesk archives)
The SEC sued Justin Sun, founder of the Tron blockchain, on Wednesday on allegations that his projects sold and airdropped unregistered securities and committed fraud and market manipulation. The SEC said in a press release it was suing Sun, the Tron Foundation, the BitTorrent Foundation and BitTorrent over the sale of the tronix (TRX) and bitTorrent (BTT) tokens, which the regulator described as unregistered crypto-asset securities. The Tron network’s native TRX token dropped 13% to to 5.8 cents after the announcement, according to CoinDesk data.
Bitcoin gradually moved to just under $28,000 on Thursday as traders digested the quarter-point interest-rate hike Wednesday by the Federal Reserve, which was in line with expectations. The decision reinforced the Fed’s concerns that inflation remains problematic and that it remains “strongly committed to returning inflation to our 2% objective.” Bitcoin slid to under $27,000 immediately after the Fed’s announcement as traders took profits on a 20% gain over a seven-day rolling period. However, traders of bitcoin-tracked futures took on over $150 million in losses amid the volatility, with billions in open interest – or the number of unsettled contracts – effectively getting washed out.
Market Insight: BTC Profits May Trump Fed
The Federal Reserve as expected raised interest rates by 25 basis points.
Yet, two crypto indicators – stablecoin supply and the profitability of bitcoin held by investors with short-term horizons – will likely have a greater impact for investors than the decision will.
A full 97.5% of bitcoin circulating supply held by short-term investors is now in profit, as the current price exceeds the average cost basis.
“Short term” means bitcoin that was acquired less than 155 days ago and often includes participants who are newer to the market or more apt to trade in and out of positions quickly.
The chart shows bitcoin’s rally has stalled around $28,600, a resistance level marked by the swing low reached in April 2021.
“The more BTCUSD resists a sharp pullback from $28.6K, the higher the chances of it breaking on the upside and price targeting $34K,” chartered market technician Aksel Kibar tweeted.
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