Here are some of the major developments from the world of crypto over the past few days.
The price of Bitcoin fell below the level of $58,000 and crashed to as low as $57,874 on Coinbase on July 4; the biggest cryptocurrency hasn't verified sub-market performance in over two months. Bitcoin has since recovered to trade at $58,964; still, it is off 3.4% on the week when pulled by TradingView data.
The drop in the Bitcoin price over the past 24 hours liquidated over $54.9 million in long positions on betting investors who were taken aback by the price increase. Traders in Ethereum who had opened positions to get some exposure ahead of the highly anticipated spot ETFs, to be launched by mid-July, also had $57.9 million of their long positions liquidated.
The sell-off is widely believed to have been sparked by the approaching repayments of about $8.5 billion in BTC to claimants of the Japanese cryptocurrency exchange Mt. Gox, set to start at the beginning of July. Interestingly enough, some experts believe the repayments may not spill as much red ink as many fear.
But this price drop notwithstanding, there have been far too many 'buy the dip' mentions over social media over the last two days, which assume that the investors feel that this fall could be a good opportunity to get hold of Bitcoin at lower prices.
Binance Ruling in Suit with SEC Over Cryptocurrency Regulation
Coinbase points to a recent ruling by Judge Amy Berman Jackson in the SEC vs. Binance case to help the exchange argue against the SEC. The exchange said that the judge held that the secondary sale of Binance's token, BNB, had not met the test criteria of securities sales according to the Howey test.
In the letter, lawyers for Coinbase accused the SEC of arbitrary rulemaking without any consistent framework and incoherence in explaining its regulatory process. On June 27, Coinbase sued the SEC and the Federal Deposit Trust Corporation in what it claimed was their plot to lock the crypto industry out of the banking sector.
Read More: Binance US 'Prepared' For SEC Legal Showdown
The lawsuit alleges that the agencies violated FOIA by their failures to respond to requests relating to documents about the agencies' rulemaking deliberations surrounding Ethereum's shift to a staking-based ecosystem.
But it's not the first time the classification of Ethereum by the U.S. Securities and Exchange Commission (SEC) has been called into question. In a statement back in 2018, SEC official William Hinman said Ethereum ETH was not a security because it was sufficiently decentralized.
The ruling by Judge Jackson in SEC v. Binance further lent weight to the original ruling in SEC v. Ripple Labs that stated that the secondary sales of XRP were not securities sales. However, it showed how the SEC has been spotty in its approach toward regulating cryptocurrencies—something even its own insiders, like Commissioner Mark Uyeda, have come out to criticize.
Basel Committee Develops Cryptocurrency Investment Policies for Banks
The Basel Committee on Banking Supervision has just recently met to deliberate on how to dictate such investment reporting by banks in relation to cryptocurrencies. This is part of the Basel III reforms, which are changes in the rules to make European banks safer.
At the same meeting, the committee disclosed, or reported, a plan for bank holdings of cryptos up to May 2023 after comments came in.
The original proposal includes some changes and a guideline with updates on rules for banks that would be holding stablecoins. The reason for revealing this information is to explain things and to call upon people to watch the banks closely. According to BIS, the rules will be published in July.
The committee initiated a study of banks' investments in crypto in 2019. In 2021, it recommended classifying crypto in a high-risk category, meaning that banks should have a coverage ratio equal to their full exposure to crypto assets. The body also touched on legacy rules for banks issuing their own stablecoins. Alongside new MiCA rules, stablecoin issuers must also ensure they adhere to the so-called Basel rules. Changes to Basel III become operational on January 1, 2026—a year after the original proposal.