DeFi volumes surge 444% after Binance, Coinbase lawsuits: Finance Redefined

Welcome to Finance Redefined – your go-to source for the latest news and insights on the ever-evolving world of decentralized finance (DeFi). Every week, we bring you the most important developments from the DeFi space.

The past week has seen a surge in DeFi trading volume due to the United States Securities and Exchange Commission’s (SEC) legal action against two of the leading centralized crypto exchanges, namely Binance.US and Coinbase.

Whilst the SEC’s enforcement action against centralized exchanges has been the focus of attention, the securities regulator is also actively taking action against the decentralized exchange (DEX) environment. Paradigm, a crypto venture capital firm, has criticized the SEC’s approach, emphasizing that DEXs are not securities exchanges.

In a separate legal dispute, a U.S. district court has rejected a case against the DeFi protocol PoolTogether. To finance their legal defense, the PoolTogether community held a $1.4 million NFT sale in 2022.

At the beginning of June, the DeFi market had an optimistic start, however, that enthusiasm was short-lived as the SEC took enforcement action later on in the week. Most of the top 100 DeFi tokens saw losses, causing the total value locked to drop back below $50 billion.

SEC crackdown on Binance and Coinbase surge DeFi trading volumes 444%

The trading volume of the top three decentralized exchanges rose 444% in the last two days as crypto investors reacted to the SEC’s recent legal proceedings against the centralized exchanges Coinbase and Binance.

Aggregated data from CoinGecko reveals that the total daily trading volumes of Uniswap v3 (Ethereum), Uniswap v3 (Arbitrum), and PancakeSwap v3 (BNB Smart Chain) increased by over $792 million between June 5 and June 7, accounting for 53% of the entire DEX trading volume in the last 24 hours.

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U.S. federal court dismisses lawsuit against DeFi platform PoolTogether

A United States judge recently ruled to terminate a legal action brought against the decentralized finance (DeFi) platform PoolTogether. According to the judgement, the federal court system is not the suitable venue to express grievances against the DeFi startup.

U.S. District Court Judge Frederic Block expressed his genuine worries regarding the startup, but noted that a lawsuit in a federal court is not the right way to tackle the issues. Furthermore, the judge stated that Joseph Kent, the plaintiff, has no right to bring a case against the defendants because he has not experienced any tangible damage from them.

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Paradigm slams SEC’s ‘incoherent’ attempt to police decentralized exchanges

Paradigm, a crypto venture capital firm, has strongly criticized the SEC’s attempt to redefine the term “exchange”, which would put decentralized exchanges under the control of the SEC if accepted.

On June 8, the company dispatched a long 14-page communication to SEC secretary Vanessa Countryman concerning the regulator’s proposed redefinition of the phrase “exchange” in the 1934 Securities Exchange Act.

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Atomic Wallet hack losses top $35 million, on-chain sleuth reports

At least $35 million in cryptocurrency has been taken from Atomic Wallet customers since June 2, as observed by blockchain detective ZachXBT. The five greatest thefts amount to $17 million. Atomic Wallet has declared on Twitter that they are looking into what caused the attack. There have been accounts of missing tokens, deleted transaction records, and even entire crypto portfolios being taken.

An anonymous Twitter user, ZachXBT, who is renowned for tracking down stolen cryptocurrency and aiding hacked projects, conducted an individual investigation which revealed that the largest victim lost $7.95 million in Tether (USDT). When commenting on the situation, ZachXBT said, “I think the total amount could exceed $50 million. I’m still discovering more and more victims, unfortunately.”

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DeFi market overview

This past week, the total market value of DeFi experienced a bearish decrease. According to Cointelegraph Markets Pro and TradingView, the top 100 tokens of DeFi by market capitalization had a bearish week, with the majority of tokens trading in the negative, losing double digits. The total value locked in DeFi protocols dropped beneath the $50 billion threshold.

We appreciate you taking the time to read our summary of this week’s most significant DeFi developments. Make sure to join us again next Friday for more news, insights, and education about this rapidly evolving area.

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