Crypto Cracks Down: Regulators Hammer Exchanges Globally

Cryptocurrency exchanges face regulatory challenges worldwide with the US Department of Justice indicting KuCoin for unlicensed operations and violating the Bank Secrecy Act. Coinbase faces a lawsuit from the US Securities and Exchange Commission, arguing that the exchange's transactions constitute securities transactions. Binance's Russian successor, CommEx, has halted operations due to regulatory uncertainties. BlackRock's Bitcoin ETF is projected to surpass Grayscale's Bitcoin Trust in holdings within three weeks due to strong inflows. Galaxy Digital reports a net income of $296 million in 2023, reversing its 2022 loss, while Goldman Sachs clients re-enter the crypto market amid the approval of spot Bitcoin ETFs. SWIFT's second sandbox testing for its CBDC interlinking solution shows success, with plans for further development of the beta version.

Regulatory Crackdowns Intensify for Crypto Exchanges Worldwide

Global crypto exchanges are facing an escalating wave of regulatory scrutiny, with authorities in the United States, the Philippines, and Russia taking decisive actions against prominent players in the industry.

KuCoin Indicted for Unlicensed Money Transmission, BSA Violations

On March 26, the United States Department of Justice (DOJ) indicted KuCoin and its founders for allegedly operating an unlicensed money-transmitting business in violation of the Bank Secrecy Act (BSA). The charges allege that the exchange handled over $5 billion in suspicious and criminal funds.

Coinbase Lawsuit Moves Forward, SEC Jurisdiction Challenged

On March 27, District Judge Katherine Failla denied Coinbase's motion to dismiss a lawsuit filed by the U.S. Securities and Exchange Commission (SEC), arguing that the transactions in question have previously been classified as securities transactions. Coinbase had sought an order to drop the case, challenging the SEC's authority over crypto exchanges.

Binance Blocked in the Philippines Amid Licensing Concerns

On March 25, the financial regulator in the Philippines blocked local users' access to Binance, citing concerns over the firm's unlicensed operations in the country. The agency alleged that the exchange offered leveraged trading services and crypto savings accounts to local users without the necessary licenses.

Binance Successor in Russia Shuts Down Operations

In Russia, CommEx, the successor to Binance, announced the closure of its operations and halted deposits. The company acquired Binance's Russian business in September 2023 for an undisclosed amount.

Industry Developments: BlackRock's ETF Surge, Goldman's Renewed Interest, SWIFT's CBDC Progress

In addition to the regulatory challenges, the week's Crypto Biz explores significant industry developments, including:

• BlackRock's Bitcoin ETF Poised to Surpass Grayscale Trust: BlackRock's spot Bitcoin ETF is on track to overtake the Grayscale Bitcoin Trust (GBTC) in Bitcoin holdings within three weeks, given the current rate of inflows and outflows.
• Galaxy Digital Reports Net Income Surge: Digital asset management firm Galaxy Digital reported a net income of $296 million for 2023, a reversal from its $1 billion net loss in 2022.
• Goldman Sachs Clients Return to Crypto: Goldman Sachs' clients have resumed investing in crypto following the approval of spot Bitcoin ETFs. Hedge funds are actively utilizing the firm's options and futures offerings to gain exposure and make long-term price predictions.
• SWIFT's CBDC Sandbox Tests Successful: The SWIFT messaging network has reported positive results from the second phase of sandbox testing for its CBDC interlinking solution. The project tested various use cases, including digital trading with atomic settlement and tokenization platform connectivity.
• Mastercard Forecasts Remittance Growth: Mastercard has released a white paper on remittances in Latin America, projecting that digital remittances will reach $20 billion by 2026.

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