It has been yet another tumultuous week in the regulatory landscape for digital assets, with the US Securities and Exchange Commission (SEC) filing back-to-back legal charges against the two largest exchanges, Binance and Coinbase. Both filed complaints pertain to the listing and trading tokens that the SEC deems to be unregistered securities, as well as claims that the offered earn and staking services are also in violation of securities laws. For Binance, the charges extend further, alleging that the entity engaged in wash trading, and has commingled customer funds between on-shore and off-shore entities.
As news of the Binance charges broke on 5-June, digital asset markets traded lower, with ETH down -5.4%, and BTC down -6.8%. Both assets recovered these losses as news of the Coinbase charges landed on 6-June. However, by the end of the week ETH had sold off further, down -8.2%, whilst BTC held up slightly better at -6.4%.
Given the gravity of the charges against the two largest exchanges, and an increasingly hostile US regulatory environment, we will focus on the investor response, with a specific lens on exchange activity. By inspecting the breakdown of exchange activity, we are seeking evidence that suggests any negative shifts in investor sentiment.
🪟 View all charts covered in this report in