By James Davis
Most coins have enjoyed massive rallies since the start of the year, but that was dented by losses posted over the past week. Two of the largest cryptocurrencies by market capitalization, Bitcoin and Ethereum, dropped by single-digit percentages while some other top coins declined significantly.
Increased scrutiny by the US regulators is said to be the main driver of the price drops. Various agencies, including the Department of Justice and the Securities and Exchange Commission (SEC), have doubled their efforts to ensure sanity in the crypto industry since the downfall of the popular crypto exchange FTX.
SEC Crackdown on Kraken
Last week, Kraken, a crypto exchange, became the first SEC victim as the regulator ordered the exchange to suspend its staking service and pay over $29 million in penalties. On his Twitter handle, Kraken founder Jesse Powell posted a video of SEC Chair Gary Gensler in which he explained why they targeted Kraken.
Gensler was heard saying that before offering its staking services, the exchange should have provided full and fair disclosure to be considered compliant. Powell wrote a caption on the video stating that he would not have paid the penalty if he had seen the video before agreeing to do so.
Elsewhere, a deal was finally struck between Genesis and Gemini after several weeks of a heated exchange that involved the bosses of the two firms. On Tuesday, Cameron Winkelvoss, Gemini co-founder, disclosed on his Twitter account about the agreement announced in a bankruptcy court.
Three Arrows Capital Founder and His New Project
On Thursday, Zhu Su, the co-founder of Three Arrows Capital, a now-bankrupt crypto hedge fund, wrote a long Twitter thread revealing his new project dubbed Next Level cex. Zhu Su claims it will be a centralized exchange with absolute decentralized custody. However, he did not reveal the launch date.
On Friday, some crypto advocates mocked the SEC enforcement action on Kraken. Miles Jennings, Andreessen Horowitz’s General Counsel, wrote on his Twitter account that the SEC’s action would likely not affect exchanges that provide the staking service in a way that does not contradict the securities laws.