Welcome to Finance Redefined, a weekly newsletter with essential information on decentralized finance (DeFi)prepared to offer you the most significant events of the past week.
Lawsuits by the United States Securities and Exchange Commission (SEC) against two major centralized cryptocurrency exchanges, Binance.US and Coinbase, have caused DeFi trading volume to spike over the past week.
While SEC actions against centralized exchanges have grabbed headlines, the securities regulator is actively pursuing cases against the decentralized exchange (DEX) ecosystem as well. Cryptocurrency venture capital firm Paradigm has criticized the SEC’s approach, reiterating that DEXs are not security exchanges.
In another legal battle, A US district court has thrown out a lawsuit against the DeFi PoolTogether protocol. The community behind the protocol had funded its legal defense through a $1.4 million non-fungible token (NFT) sale in 2022.
The DeFi market got off to a bullish start in June, but the momentum did not last long due to the SEC enforcement action in the second week. Most of the top 100 DeFi tokens traded in the red, with the total value locked dipping back below $50 billion.
SEC Crackdowns Against Binance and Coinbase Shoot DeFi Trading Volumes 444%
Average trading volume across the top three DEXs soared 444% in the past 48 hours as cryptocurrency investors reeled from recent SEC legal action against centralized cryptocurrency exchanges Coinbase and Binance.
According to CoinGecko aggregated data, Total daily trade volumes on Uniswap v3 (Ethereum), Uniswap v3 (Arbitrum) and PancakeSwap v3 (BNB Smart Chain) – accounting for 53% of total DEX trade volume in the last 24 hours – increased by more than $792 millions between June 5 and June 7.
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US Federal Court Dismisses Lawsuit Against DeFi Platform PoolTogether
A US judge has recently dismissed a lawsuit against the platform decentralized finance (DeFi) PoolTogether. According to the sentence, the federal court system is not the proper place to air concerns against the DeFi startup.
US District Court Judge Frederic Block said that despite having real concerns about the startup, a lawsuit in federal court is not “an appropriate way to address them.” The judge also said that the plaintiff, Joseph Kent, does not have standing to sue because he “suffered no actual harm at the hands of the defendants.”
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Paradigm Criticizes SEC’s “Inconsistent” Attempt to Policing Decentralized Exchanges
Crypto venture capital firm Paradigm has criticized the SEC’s attempt to redefine the term “exchange,” which, if accepted, would bring decentralized exchanges under its purview.
On June 8, the firm sent a lengthy 14-page letter to SEC Secretary Vanessa Countryman regarding the regulator’s proposed redefinition of the term “exchange” in the Securities Exchange Act of 1934.
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Atomic Wallet Hack Losses Top $35 Million, On-Chain Detective Reports
At least $35 million worth of cryptocurrency has been stolen from Atomic Wallet users since June 2, according to an analysis by on-chain detective ZachXBT. The five largest losses add up to USD 17 million. According to Atomic Wallet on Twitter, the cause of the attack is being investigated. Reports of lost tokens, wiped transaction histories, and even entire cryptocurrency portfolios stolen have surfaced.
An independent investigation by Twitter pseudonym ZachXBT, known for tracking stolen cryptocurrency funds and helping hacked projects, found that the biggest victim lost $7.95 million worth of Tether (USDT). “I think it could be over $50 million. I keep finding more and more victims, sadly,” ZachXBT commented.
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DeFi Market Overview
The total DeFi market value experienced a bearish decline last week. The data from Cointelegraph Markets Pro and TradingView show that the top 100 DeFi tokens by market cap had a bearish week, with most tokens trading in the red, posting double-digit losses. The total value of DeFi protocols fell below $50 billion.
Thanks for reading our roundup of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights, and education about this dynamically advancing space.
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