Crypto News: SEC Fraud Charges, New House Rules, NFT Trades Freefall


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Cryptocurrency prices appear to be on the mend as indexes push above their 50-day lines. Bitcoin is up nearly 13% this week and trading above $23,000 for the first time since mid-June. Ethereum recovered its $1,600 level, which it also lost in the middle of last month. But NFTs aren’t seeing the same boost, and marketplace volume is on track for its worst month in a year. In other crypto news, the House Financial Services Committee plans to advance new stablecoin rules next week. And Coinbase (COIN) hits back at the SEC over its insider trading investigation.
It looks like people are getting bored with Bored Apes. Data collected from The Block shows NFT monthly marketplace volume is on pace for the lowest level since last July. NFT trading volume is at $368.98 million so far this month, just slightly higher than the $366.75 million last year. Marketplace volume plummeted 93% from its January peak of $16.57 billion to $1.04 billion in June. About 74% of that drop occurred between May and June.
Even NFT scammers seem to have lost interest. The LooksRare marketplace is notorious for wash trading, where individuals trade between themselves to artificially drive up the price and volume of their assets. LooksRare volume fell from its all time high $11.1 billion in January to $214.34 million in June. So far LooksRare volume is $89.48 million for the month.
Excluding LooksRare, total NFT marketplace volume is $279.5 million so far for July. OpenSea is by far the largest marketplace and accounted for $228.96 million of the sales volume. It’s down 67% from $696.73 million last month and well below May’s trading volume of $2.6 billion.
And Bored Ape Yacht Club isn’t getting the same hype it used to. The is the third-highest grossing NFT collection with a total $2.3 billion in trading volume. But it fell to $38.2 million in July from its peak of $346.7 million in January.
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The House Financial Services Committee aims to advance its stablecoin bill as soon as July 27, according to reports from Bloomberg. The current draft of the bill would require issuers to maintain 100% reserves and bar lending stablecoins to customers. It would cover both bank and nonbank issuers. And the Federal Reserve would license and insure nonbank stablecoin issuers. The bill would also set new rules on what assets can be used as pegs to maintain value and prevent commercial companies from issuing coins. Lastly, the proposed ruling would change the name of the assets to “payment stablecoins.”
In Securities and Exchange Commission-related crypto news, a former Coinbase product manager was charged with wire fraud on Thursday in an alleged $1.5 million crypto insider trading scheme. Prosecutors say Ishan Wahi, who worked on the asset-listing team, tipped his brother and a friend off about which cryptocurrencies Coinbase would add. The group traded 25 different tokens before at least 14 public listing announcements dating back to last summer, and hid the profits in various anonymous wallets, authorities say.
The SEC filed a civil complaint against them, which argues nine of the traded cryptocurrencies are securities. Seven of those nine are listed on Coinbase. Chief Legal Officer Paul Grewal hit back at the SEC in a blog post Thursday.
“Coinbase does not list securities on its platform. Period.” he wrote. Grewal says it has a rigorous review process to ensure securities are not listed, which the SEC assessed.
The company also filed a petition for rule-making with the SEC Thursday to provide a clear regulatory framework for digital asset securities.
Last month, authorities charged a former OpenSea employee with using insider information to profit off NFTs.
Follow Harrison Miller for more news and stock updates on Twitter @IBD_Harrison.
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