Coinbase Makes Fortune 500 But Stock Lulls Around All-Time Lows

Key Insights:

  • Coinbase enters the Fortune 500 list at number 437. 
  • Inclusion was based on 2021 revenue of $7.8 billion.
  • COIN has dumped a further 7% on the day as it heads back to its lowest levels.

Coinbase Global has become the first crypto company to break into the Fortune 500, as announced this week. Under normal circumstances, this would have been bullish news for the crypto industry, but as Fortune reported on May 25 in its usual FUD-fuelled (fear, uncertainty, and doubt) manner, it happened “just in time for crypto winter.”

The San Francisco-based firm has entered the illustrious list at 437 despite having a disappointing Q1 revenue report which saw it make a loss.

The inclusion on Fortune’s list of the biggest U.S. companies came on the back of stellar performance and profits during the crypto bull market of 2021. Last year, Coinbase made $7.8 billion in revenue, which is above the minimum of $6.4 billion that firms need to be considered for the Fortune 500.

Coinbase Highs and Lows

Coinbase, which went public in the United States in April 2021, closed its first trading day with a $61 billion valuation. This enabled the firm to become the seventh-highest market cap among U.S. companies after their first trading day.

2022 has not been so easy on Coinbase, as crypto markets have slumped 43% since the beginning of the year. This equates to a whopping $1 trillion leaving the space as another bear market cycle unfolds. To put this into perspective, crypto markets have lost the equivalent of their total market capitalization in January 2021.

Coinbase derives more than 85% of its revenue from trading fees, which are among the highest in the industry. Lower trading volumes amid this crypto slump have resulted in lower than expected revenues for the company, which has been reflected in the stock price performance.

Coinbase missed analyst expectations for the first quarter. Its underwhelming net revenue of $1.16 billion resulted in a net loss of $430 million for January to March this year, and Q2 could be even worse. Coinbase revenue declined 53% from Q4, 2021 when most crypto assets hit their highest prices.

Further falls in revenue could see Coinbase drop out of that prestigious list this year, added Fortune. A crypto winter like the one that started in early 2018 and lasted a year and a half could easily have that effect.

However, analysts have suggested that new products signal a strategic shift for the firm. Coinbase recently announced plans to expand Coinbase Pay, develop an institutional staking protocol, and native decentralized app support within its platform as it aims to become an embedded service provider for the decentralized economy.

COIN in The Doldrums

Coinbase stock [COIN] dropped 7.1% on Tuesday to end the day at $61.36 during after-hours trading. Since the beginning of the year, COIN has dumped 75% to current levels, which are only just above its May 11 all-time low of $52.55, according to FXEmpire.

46% of US Crypto Investors Were High Income Holders: Fed Survey

Key Insights:

  • 12% of Americans held cryptos in 2021, a Fed survey states.
  • 46% of US adults who held crypto purely for investments had six-figure income.
  • 13% of transactional users of crypto did not have a bank account.

Federal Reserve’s annual report on the 2021 “Economic Well-Being of US Households” released Monday said that crypto ownership levels among Americans are significantly higher among the high-income groups.

“46%, nearly half, of the US crypto investors had an annual income of $100,000 or more, while 29 percent had an income under $50,000.”

However, this was different in the case of profiles that used cryptos such as bitcoin (BTC), ether (ETH), and Litecoin (LTC) for transaction purposes. Less than 24 % of transactional users had an income over $100,000. In comparison, 6 in 10 adults had an income of less than $50,000.

The Fed survey had asked several questions about cryptocurrencies and found that 12% of Americans bought held cryptos in 2021.

The findings noted that overall, 11% held cryptos as an investment, 2% used cryptos to buy goods, and as low as 1% used them to send money to kiths and kins.

Additionally, 13% of users who use crypto for payment are unbanked in the US., and 27% lacked credit cards. On the other hand, people are keen on having crypto investments for retirement savings. It noted,

“99% of those investing in cryptocurrency, but not using it for transactions, had a bank account, and 89% of nonretired cryptocurrency investors had at least some retirement savings.”

What drives crypto adoption in the US?

The US has become a hotbed for crypto developments. The government and some states, such as New York and Miami, have their own digital ‘CityCoins’ dubbed NewYorkCoin (NYC) and MiamiCoin (MIA).

Other states have enacted laws that favor the use of cryptos. For instance, lawmakers in Arizona have proposed tax payments in cryptos, thus driving adoption among the state residents.

Additionally, crypto-related businesses and companies such as Coinbase (COIN) and Kraken (KRAK) have established their base in the US, enabling Americans to buy cryptos quickly.

Another major driver for crypto adoption among US citizens is the acceptance of cryptos as a medium of payment by many merchants.

Crypto adoption in the US is growing

There has been a shift in the perception of cryptocurrency as a mere investment tool over the last few years in the US. More people, particularly the youngsters, are now aware of crypto investment and trading. Few popular cryptos among Americans include bitcoin, ethereum, tether (USDT), Shiba Inu (SHIB), and dogecoin (DOGE).

When BTC prices climbed to an all-time high in November 2021 and hit $67K, the number of crypto investors in the US increased exponentially. 

However, the recent collapse of the Terra network, bringing down the price of the overall crypto market, has made the future murky. Per data from crypto intelligence firm Glassnode, nearly 40% of bitcoin holders have lost money on their investment.

Ben McMillan, the chief innovation officer for IDX Insights, an asset management firm that specializes in cryptocurrency, said that this isn’t going to be consistent. He told Washington Post,

“When you see kind of the power of that technology, it’s impossible not to be bullish. Now, that doesn’t mean it’s going to be an upward line. That doesn’t mean it’s not going to be a volatile path.”

He noted that many investors did not understand the risks that these asset classes pose. He said many of them instead thought about it “as a digital version of gold, or as an inflation hedge.”

GameStop Delves Deeper Into Crypto With Digital Wallet Launch

Key Insights:

  • The new wallet will be self-custodial and linked to the upcoming NFT marketplace. 
  • The layer-2 Loopring network powers GameStop Wallet.
  • Coinbase has also expanded its trading networks on its crypto wallet.

On May 23, the Texas-based video game, consumer electronics, and gaming merchandise retailer unveiled a new crypto wallet. It stated that the service would allow gamers and customers to store, send, receive and use crypto assets and NFTs across decentralized apps (dapps) without leaving their web browsers.

GameStop [GME] stated that its self-custodial Ethereum (ETH) wallet is a Chrome browser extension. This means it operates in the same way that MetaMask does, as an addition to the web browser.

It added that the wallet would also enable transactions with the GameStop NFT marketplace, which is expected to launch in Q3 this year (the firm’s second fiscal quarter).

Layer-2 Speeds and Pricing

Further details were thin on the ground, but the wallet’s official page revealed that it would be running on the Loopring (LRC) network. Loopring is a layer-2 exchange that uses zero-knowledge rollup technology to increase the speed and decrease the cost of Ethereum transactions.

Swapping tokens using layer-1 Ethereum can cost as much as $50 during peak demand on the network. Loopring transactions, on the other hand, are usually less than a dollar.

Additionally, the wallet is self-custodial, which means that users are responsible for their own crypto keys and security. This is different from wallets from centralized exchanges such as Coinbase [COIN] and Binance that control the keys, and, ultimately the assets stored on them.

The crypto wallet space has been heating up recently, with Robinhood [HOOD] announcing its crypto wallet launch last week. The zero-fee token swap platform is also self-custodial and will feature decentralized finance (DeFi) protocol integration.

Coinbase is also eager to keep up with the wallet competition. In an announcement on May 24, the company unveiled an expansion of wallet trading features to incorporate “thousands of tokens.” The firm has expanded its networks from Ethereum and Polygon (MATIC) to include BNB Chain (formerly Binance Smart Chain) and Avalanche (AVAX). It added that there would be more network expansion in the coming months:

“In the months to come, we’ll be making it possible to conduct swaps on an even greater variety of networks. Not only will trading expand, but we’re also planning to add support for network bridging, allowing you to seamlessly move tokens across multiple networks.”

LRC Price Outlook

The native token for Loopring, the platform behind GameStop’s wallet, surged 30% on the news. LRC has retreated a little since and is currently trading at $0.58 after hitting an intraday high of $0.65, according to CoinGecko.

LRC is one of the few tokens that has made a gain over the past week, notching up 25%, while those around it have tanked. However, the token is still down 84% from its November all-time high of $3.75.

Crypto Exchange FTX’s US Arm Set To Introduce Stock Trading

Key Insights:

  • FTX. US is set to launch the stock trading feature over the next few months.
  • Binance, after an attempt in 2021, failed to continue its operations, citing regulatory concerns.
  • FTT has been stuck in the bearish zone for more than a month now.

In a press release today, cryptocurrency exchange FTX announced its newest venture, one that has been uncharted territory for its competitors.

Bringing regulated stock trading onto its platform, FTX will be deploying the feature for the users of the crypto exchange’s US arm FTX.US.

Stocks X Crypto

Combining crypto and stock trading is not a new attempt, as last year, Binance pioneered this field in its own unique way.

Instead of directly bringing US equities onto the exchange, Binance introduced crypto assets that were tied to the value of shares of stocks such as Tesla, Apple, and Coinbase.

However, after the exchange began facing pressure from regulatory authorities from all around the world, Binance stopped offering this facility to investors.

But unlike Binance, FTX will not be offering crypto tokens tracking stock prices, instead, it will directly provide regulated US equities.

Being an affiliated broker-dealer registered with the SEC and a member of FINRA/SIPC, FTX will be offering these services through FTX Capital Markets.

Commenting on the launch, FTX US’ president Brett Harrison stated,

“Our goal is to offer a holistic investing service for our customers across all asset classes. With the launch of FTX Stocks, we have created a single integrated platform for retail investors to easily trade crypto, NFTs, and traditional stock offerings through a transparent and intuitive user interface.”

Expected to be available within the next few months, stock trading on the exchange will be completely commission fees-free.

Furthermore, FTX US will also allow its clients to fund their accounts with the stablecoin USD Coin (USDC),

This will be a huge opportunity for the exchange to arise as a prominent player in the crypto as well as potentially the equity trading space.

FTT on the Charts

While the exchange is making strides in its own ways, its native token, FTT, has not been particularly impressive over the last few days.

After declining by 25.27% during the week-long crash of May 5, FTT managed to make a 10.46% recovery, but the same was invalidated yesterday after the price fell by 7.63%.

As a result, FTT has not been able to come out of the bearish zone that it has been stuck in since the first week of April, and neither has it been able to mark a bullish crossover at the same time period despite repeated attempts.

FTT is still recovering from its 25% fall in prices during the crash

Thus as FTX expands its operations, it could potentially positively affect the price of FTT as well.

Robinhood to Launch Web3 Wallet to Rival MetaMask and Coinbase

Key Insights:

  • The trading firm wants to let its customers get exposure to decentralized finance.
  • The wallet will be launched in Beta this summer and in full by year-end.
  • Coinbase also announced DeFi functionality in its mobile app this week.

On May 17, Robinhood (HOOD) announced its new non-custodial, Web3 wallet that will allow customers to have more control over their digital assets. The company added that its new multichain wallet would launch as a standalone app. It will feature a similar design to Robinhood, which simplifies trading functions.

The wallet will be similar to rivals such as MetaMask in that users will be able to hold the keys for their own crypto assets. Similar wallets by crypto exchanges Coinbase and Binance put the company in control of the private keys, making them centralized.

It will also offer trading and token swaps with no network fees, nonfungible token (NFT) storage and connection to NFT marketplaces, decentralized finance (DeFi) yield farming, and a variety of supported cryptocurrencies.

The Big Web3 Push

Co-founder and CEO of Robinhood, Vlad Tenev, said that the firm views crypto as more than just an asset class, adding:

“By offering the same low cost and great design that people have come to expect from Robinhood, our web3 wallet will make it easier for everyone to hold their own keys and experience all the opportunities that the open financial system has to offer.”

He added that the product would satisfy the “most advanced DeFi believers” while creating a secure on-ramp for those just starting out in crypto to go deeper into the ecosystem.

Robinhood also plans to cover the network or gas fees which can make token swapping prohibitively expensive at times of peak network demand.

The wallet isn’t available just yet, but there is a waiting list for early access to the Beta program this summer, and the company stated that it would be available to all customers by the end of the year.

Robinhood is best known as an equities trading platform, making its name during the 2021 meme stock trading frenzy. The firm has also done well from cryptocurrency trading during the booming market last year. Company stock remained flat on the day reaching $10.13 during after-hours trading. Shares are down 43% since the beginning of the year, however.

Coinbase DeFi Wallet Unveiled

The Robinhood move comes in the same week that America’s leading crypto exchange, Coinbase (COIN), unveiled its own DeFi app. On May 17, Coinbase announced that it was introducing Web3 and DeFi functionality within its mobile app.

In true Coinbase style, the new service will only initially be available to a handful of users. It will enable Ethereum-based (ETH) Web3 applications within the mobile app. These include NFT marketplaces such as OpenSea, trading on decentralized exchanges like Uniswap (UNI), and borrowing, lending, or swapping through DeFi platforms such as Compound (COMP) and Curve (CRV).

Coinbase CEO: Reserve Bank of India’s Pressure Triggered Trading Halt

Key Insights:

  • Coinbase’s CEO blames RBI’s informal pressure for disabling UPI payments in India.
  • Brian Armstrong highlighted the uncertainty around the legality of cryptos in the country.
  • Coinbase is seeking to work with the RBI and relaunch its operations in India.

Brian Armstrong, CEO of American crypto exchange Coinbase (COIN), has blamed pressure from the Reserve Bank of India (RBI) over disabling its UPI services.

During the company’s earnings call on Tuesday, Armstrong noted that:

“A few days after launching, we ended up disabling UPI because of some informal pressure from the Reserve Bank of India.”

The Nasdaq-listed exchange initially launched its services in India on April 7 and added UPI (Unified Payment Interface), a payment system for money transfers, for buying cryptocurrencies such as bitcoin (BTC) and ethereum (ETH).

Soon after the launch, Coinbase suspended its UPI facility, which came as a disappointment to crypto users in the nation. As reported by FX Empire, the suspension of UPI payments came as a result of a strange statement from the National Payments Corporation of India (NPCI), noting that it was unaware of any crypto exchange using UPI.

Brian Armstrong mentions the actual reason

Apart from “informal pressure from the RBI,” Armstrong highlighted the regulatory uncertainty around cryptocurrencies in India.

Calling India a “unique market,” he said that the Supreme Court could not entirely ban cryptocurrencies. However, he noted that few government bodies such as the RBI “don’t seem to be as positive on it.” He said:

“And so they – in the press, it’s been called a ‘shadow ban,’ basically, they’re applying soft pressure behind the scenes to try to disable some of these payments, which might be going through UPI.”

Last month, several Indian banks approached the NPCI seeking clarification on the “shadow ban” on cryptocurrencies and using UPI payments for bitcoin transactions.

According to the CEO, the exchange had concerns that the central bank had violated the Supreme Court ruling. He noted:

“I guess we have a concern that they may be actually in violation of the Supreme Court ruling, which would be interesting to find out if it were to go there. But I think our preference is really just to work with them and focus on relaunching.”

Coinbase might come back into Indian market

The CEO concluded the talk by stating that the exchange expects to return to India with additional payment options soon. He added:

“I think there’s a number of paths that we have to relaunch with other payment methods there. So my hope is that we will live back in India in relatively short order, along with a number of other countries, where we’re pursuing international expansion similarly.”

In the long run, crypto will eventually be regulated and legal in most democracies in the world, Armstrong said, adding that it would take time for such countries to get comfortable with them.

Russian Crypto Users Face Another Blow, This Time From Coinbase

Key Insights:

  • Coinbase would block certain Russian accounts unless they confirm they are out of sanctions.
  • The exchange has given time until May 31 for those users to withdraw funds.
  • Binance blocked Russian users in April, after the EU’s fresh sanctions against Moscow.

Weeks after, Binance (BNB) announced that it is limiting services for Russian nationals, Coinbase (COIN) has sent letters to certain Russian accounts to withdraw funds before it is too late.

In the recent round of sanctions by the European Union on Russia, the EU has implemented a ban on deposits to crypto wallets, making it further difficult for Russians to use cryptocurrencies to evade multiple sanctions.

Coinbase to block Russian user accounts under EU’s sanctions

Coinbase crypto exchange has sent out letters to certain Russian accounts, warning customers about possible wallet blocks as a result of the fresh EU sanctions.

Per the local business news RBC, the trading platform has given time until May 31 for those users to withdraw their funds. Failing which, crypto assets may be frozen and funds transferred to this account in the future will also be blocked.

The exchange noted:

“Until May 31, 2022, you must withdraw all funds from your account or provide us with special documents that confirm that you do not fall under these sanctions.”

The announcement supports Coinbase chief lawyer Paul Grewal’s post, on May 7, noting that the exchange could no longer provide services to Russians that fall under Coinbase’s EU divisions or located in the region.

Grewal said that affected users will get another opportunity to prove that these sanctions don’t apply to them. He further said:

“If they are covered by the EU’s new restrictions, we will help them as permitted by law to withdraw their funds from Coinbase.”

Binance in the lead

The world’s leading crypto exchange by trading volume Binance, which called it “unethical” to block all Russian customer accounts, has recently imposed limitations on Russians, although not placed an outright ban.

The exchange said in April that users who have crypto assets exceeding the value of 10,000 euros will fall under these boundaries. Users will be barred from making new crypto deposits as well as trading, including custody wallets, futures, staked deposits.

Cryptocurrencies have been the only ray of hope for the citizens to evade economic sanctions, while Russia is still experiencing a merciless blow from various nations, especially the EU.

Coinbase Backs Bitcoin Loans for Wall Street Bank Goldman

Key Insights:

  • Coinbase will be working with Goldman Sachs on Bitcoin loans.
  • Wall Street banks are seeing more demand for crypto facilities and services.
  • Bitcoin prices have fallen to a 7-week low, and Coinbase stock is up marginally.

Last week, Goldman announced its first-ever Bitcoin (BTC) backed loan in which the king of crypto would be used as collateral to secure a cash loan for the borrower.

It has now been revealed that America’s largest exchange Coinbase will be working with the Wall Street bank on crypto-collateralized loans; however, the terms of the lending facility have not been disclosed.

On May 3, Brett Tejpaul, head of Coinbase Institutional, told Bloomberg:

“Coinbase’s work with Goldman is a first step in the recognition of crypto as collateral which deepens the bridge between the fiat and crypto economies,”

Bridging The Gap

Bitcoin-backed loans are not new to the crypto industry, but they are to Wall Street. The move signals that big banks are finally warming to crypto and broadening their services to incorporate institutional clients with digital asset investments. Earlier this week, JPMorgan CEO Jamie Dimon said that crypto was more efficient than banks for international transfers.

Goldman already has a team focused on crypto and traded its first-ever over-the-counter (OTC) Bitcoin options in March, becoming the first major U.S. bank to do so.

Loans in the crypto sector usually involve borrowers supplying Bitcoin at loan-to-value in the 40% to 60% range. This is according to the managing director of trading and lending at crypto prime brokerage Genesis, Matthew Ballensweig, who added:

“Tenors can vary as well as other prepayment terms, but it’s a simple structure to bring institutional lenders into the market,”

Coinbase (COIN) has already structured similar crypto loans with crypto-friendly banks such as Silvergate Bank and Signature Bank, and similar structures with large investment banks are being developed.

Coinbase held more than $566 million in crypto assets, including more than $183 million worth of Bitcoin at the end of 2021. It also reported cash equivalents in the $7 billion range, making it a prime candidate for providing collateral.

Crypto Mortgage Risks

In a related matter, Weiss Ratings agency has recently issued a warning over using Bitcoin and crypto assets to back loans for real estate. The research firm advised caution with such mortgages, citing declines in stock and crypto markets this year, a U.S. housing bubble, rising interest rates, and the Federal Reserve’s upcoming policy changes.

Bitcoin prices have retreated again today, falling a further 1.3% to dip below $38,000 for the first time since mid-March. Coinbase stock had gained 2.17% to reach $123.5 in after-hours trading.

Indian Crypto Exchanges Mandated to Store User Info for 5 Years

Key Insights:

  • The Ministry of Electronics and Information Technology has issued a new directive.
  • All crypto-related businesses have been told to keep user details stored for at least five years.
  • The decentralization aspect of crypto is losing touch with the worldwide governments’ interference.

As much as crypto has been cheered, its rapidly increasing adoption has also raised concern from authoritative bodies. As a result, crypto is losing one of its biggest USPs of being decentralized and private.

Indian government interferes

As per a new directive issued by the Ministry of Electronics and Information Technology, the Indian Computer Emergency Response Team (CERT-In) will be responsible for handling all the aspects related to cybersecurity, inducing the following particulars:

  • Collection, analysis, and dissemination of information on cyber incidents.
  • Forecast and alerts of cybersecurity incidents.
  • Emergency measures for handling cybersecurity incidents.
  • Coordination of cyber incident response activities.
  • Issue guidelines, advisories, vulnerability notes, and whitepapers relating to information security practices, procedures, prevention, response, and
    reporting of cyber incidents.
  • Such other functions relating to cybersecurity may be prescribed.

But beyond these responsibilities, the ministry has also focused specifically on the crypto-related business since crypto crime has grown immensely over the years.

Just this year, the crypto space witnessed the biggest hack ever when Axie Infinity’s Ronin Bridge was exploited for $625 million.

However, in doing so, the IT ministry has asked all virtual asset service providers, exchanges, and custodian wallet providers to maintain all information of the users, as well as the records of financial transactions for a period of five years.

Explaining the reason further, the new directive read,

“[…] so as to ensure cybersecurity in the area of payments and financial markets for citizens while protecting their data, fundamental rights and economic freedom in view of the growth of virtual assets.”

The country’s stance on crypto continues to lean in an unfavorable direction ever since the government came up with the 30% crypto tax. The tax has already been criticized by citizens since it is intended to push people away from using crypto.

But India isn’t the only country to interfere in crypto operations.

America and Japan were the first to do so

After Russia invaded Ukraine, countries across the globe began slapping sanctions on the Russian government and oligarchs. But in order to ensure that they are blocked off financially, with no means of escape, many countries started suspending their access to crypto.

The US began the trend, after the White House asked most of the top cryptocurrency exchanges to block Russian sanctioned accounts. While at first there was some back and forth, the exchanges such as Binance, Coinbase, and FTX caved and ended up blocking the accounts.

Japan took a step further, and the country’s Financial Services Agency warned its crypto exchanges that the government would impose penalties if crypto exchanges failed to comply with sanction rules.

Thus, while, on the one hand, crypto makes an advancement, it is forced to take a step back with such incidents.

Voyager Digital Hit with Unregistered Crypto Sales Lawsuit

Key Insights:

  • US crypto exchange Voyager Digital gets hit with a lawsuit for the sale of unregistered securities.
  • The lawsuit follows a string of moves by regulators to curb the use of crypto-yielding programs.
  • Last September, Coinbase shelved its ‘Lending’ program following an SEC threat of legal action.

It has been a difficult year for the crypto market. Last November, Bitcoin (BTC) hit an all-time high of $68,979 before tumbling to a January and current-year low of $32,991.

Increased regulatory and government scrutiny over cryptos, NFTs, and the metaverse contributed to the downward spiral.

Also crypto market negative has been the sharp increase in illicit activity, driven by North Korean and Russian cybercriminals.

With the Ripple v SEC case also ongoing, regulators have been quick to stamp out undesired activity elsewhere within the digital asset world.

Voyager Digital Joins a Growing List of Platforms Facing Charges

This week, news hit the wires of Voyager Digital getting hit with new allegations of selling unregistered securities via its Voyager Earn Program.

On Thursday, lawyers Adam Moskowitz and Stuart Grossman filed a complaint in a Miami federal court. The lawyers claim that Voyager Digital should have registered its Voyager Earn Program, which offers rewards on Bitcoin (BTC), Ethereum (ETH), and USD Coin (USDC), among other cryptos, with the SEC.

The Voyager Earn Program allows users to stack an earn on over 40+ assets. Stackers can earn tiered rewards based on how much they hold. Tiered annual percentage yields (APY) can go as high as 12%, while the platform offers APYs of as much as 9% for stacking USDC.

The lawyers originally filed a complaint against Voyager Digital in December on behalf of Florida resident Mark Cassidy alleging the firm charged hidden fees and made false promises. Within the new claim, the lawyers also highlighted steps taken by the SEC against the crypto firm.

Earlier this year, US states issued Voyager Digital with cease and desist orders over the offering of crypto-yielding products. These included the states of Indiana, Kentucky, New Jersey, and Oklahoma.

Exchanges Offering Crypto Yielding Products Face an Uphill Battle

In 2021, Coinbase announced SEC plans to sue them over the planned release of “Coinbase Lend”. Coinbase Lend would offer customers to earn interest on selected cryptos, with APYs starting at 4% on USD Coin.

As a result of the SEC’s intentions, Coinbase shelved the Lend program despite the SEC’s failure to provide any rationale behind sending a Wells notice.

Coinbase likely saved a sizeable sum by shelving its Lend program. This year, BlockFi paid a $100m fine for failing to register the offer and sales of its crypto lending products.

The settlement came following the SEC alleging that BlockFi’s high-yielding accounts are unregistered securities.

Coinbase NFT Platform Lags Rivals in Slow First Week  

Key Insights:

  • There has been just $300K in trading volume over the past week or so.
  • Rival NFT marketplace OpenSea has more than $100 million in daily volume.
  • Coinbase only granted access to a handful of customers on its beta platform.

It has been a little over a week since American crypto giant Coinbase launched its long-awaited NFT platform in beta. However, since that launch day on April 20, the platform has lagged significantly behind its rivals in terms of volumes and sales.

According to data from Dune Analytics, Coinbase’s NFT marketplace has had just 930 total transactions since it launched. The platform is powered by the 0x Project, which also provides the analytics data.

Lagging Behind Rivals

The data shows that April 28 was its highest day for transaction volume, which was a little over $100,000 for the period. Comparatively, rival platform and the world’s leading NFT marketplace OpenSea recorded $107 million in daily sales yesterday, according to Dune.

The total volume traded on the Coinbase NFT marketplace to date is $311,108, or 105 ETH. This is less than is traded on OpenSea every five minutes.

Other stats equally lacked luster for Coinbase, including the total number of unique buyers that tallied just 477. This is surprising since the site was inundated with registrations as millions of users signed up for access when it was announced. It has had less than a hundred new users signing up for the service per day since it started last week.

However, the low usage stats are likely to result from the fact that the company only gave access to a tiny number of the 3 million users on its waiting list.

There were also just 288 NFT sellers using the platform over the past week. Comparatively, OpenSea has had around 460,000 active traders so far this month.

The top trending collection on Coinbase NFT is Moonbirds, surpassing the wildly popular Bored Ape Yacht Club (BAYC) collection.

Coinbase stock (COIN) fell to an all-time low of $115 on Thursday, according to FXEmpire.

NFT Market Outlook

NFT market analysis platform Cryptoslam also reports that Moonbirds is currently the most popular collection in the NFT scene. There has been $88 million in seven-day secondary sales volume for the collection.

The Mutant Ape Yacht Club is in second place with $85 million in weekly sales, and its sister collection, BAYC, has seen $71 million in seven-day sales volume.

Coinbase Rolls Out Coinbase Intelligence to Tackle Global Regulatory Demands

Key Insights:

  • This week, Coinbase announces a new Coinbase Intelligence product to navigate the global regulatory landscape.
  • Coinbase aims to deliver trust and client protection with a robust platform aligned with regulatory requirements.
  • Last week, Coinbase launched CoinbaseNFT, its NFT marketplace, amidst increased digital asset scrutiny.

Coinbase, a leading crypto exchange, is no stranger to scrutiny. In March, Coinbase users filed a claim against the exchange, for allegedly selling securities illegally.

The lawsuit came amidst increased news coverage of the SEC case against Ripple (XRP), ongoing since December 2020.

Coinbase is not alone in facing scrutiny, with Binance and other leading crypto exchanges frequently facing the wrath of regulators.

With regulatory uncertainty an issue for crypto platforms, Coinbase looks to address the expectations of investors and regulators, and Coinbase users.

Coinbase Launches Coinbase Intelligence to Tackle Regulatory Risk

On Thursday, Coinbase announced the launch of Coinbase Intelligence. Coinbase developed Coinbase Intelligence to address the compliance needs of crypto businesses, financial institutions, law enforcement agencies, and new-to-crypto companies.

The product suite aims to “secure the crypto economy from bad actors.” As part of Coinbase Intelligence, Coinbase is introducing,

“A new product, Coinbase Know Your Transaction (KYT), and providing an update of our existing product, Coinbase Analytics.”

Coinbase goes on to say,

“As the largest regulated exchange in the US, it has been critical for us to work on the development of safeguards against bad actors.”

Coinbase KYT enables businesses to

  • Automate real-time transaction monitoring for millions of transactions by generating risk scores for addresses.
  • Receive alerts to enable proactive risk management if there are any changes to risk profiles.
  • Easily configure rule engines and unique risk insights into existing third-party case management tools.
  • Screen transactions for anti-terror financing and other AML-related flags at scale.

The key features of Coinbase Tracer, previously called Coinbase Analytics, include

  • Link activity to real-world entities and visualize the flow of funds using public attribution data.
  • Reduce fraud, demystify counterparty risk, and help flag AML risks with sophisticated risk scores and alerts.
  • Identify action points for intervention with seamless integrations with other case management tools and transaction monitoring systems.
  • Utilize product capabilities designed in partnership with our world-class investigations team.

The introduction of Coinbase Intelligence comes amidst increased regulatory scrutiny in the US and overseas.

In Expansion Mode, Exchanges Focus on Regulatory Compliance

Last year, Coinbase announced that the SEC wanted to sue them over their “Coinbase Lend” program. As a result of the SEC’s intentions, Coinbase shelved the Lend program.

With regulatory scrutiny on the rise amidst the increasing adoption of crypto and the evolution of Web3, Coinbase is focusing on regulatory compliance.

This year, Coinbase has beefed up its regulatory division. In January, Coinbase hired Thaya Knight as senior public policy manager. Knight worked with Commissioner Elad Roisman and was counsel for SEC Commissioner Hester Peirce.

Coinbase aligns with other crypto exchanges, including Binance, which have beefed up compliance teams to tackle increased regulatory scrutiny.

0x Labs Raise $70 Million From Coinbase, Opensea and Jared Leto

Key Insights:

  • 0x Labs closed a $70 million Series B financing round.
  • Coinbase’s NFT marketplace also makes use of 0x’s technology.
  • Earlier in 2017, 0x Labs raised another $24 million in a ZRX token sale.

NFTs are slowly taking center stage, and some are in the bid of not only promoting but also being a central part of that growth. Coinbase is one such company that, after touching base with NFTs this month, is now helping others in this field excel.

0x Takes Another Giant Leap

According to a report from Forbes, 0x Labs has closed a $70 million Series B financing round with the bid led by the Greylock Partners.

However, they weren’t alone as others, including Pantera, Jump Capital, Ethereum NFT marketplace OpenSea, and Hollywood actor Jared Leto.

The San Francisco-based decentralized exchange infrastructure provider is a key player in the industry. 0x Labs’ technology was also used by Coinbase for its very own NFT marketplace Coinbase NFT. Coinbase itself was a participant in this $70 million investment.

This funding round, however, isn’t the first for 0x Labs. Earlier in 2017, through the sale of the ZRX token, 0x Labs had managed to raise about $24 million and then another $15 million in a Series A equity round, which was led by Pantera Capital.

The company has been building its name in the NFT marketplace industry after releasing a set of NFT swap features in the first quarter of this year.

This way, it enabled users to exchange digital collectibles across multiple blockchains such as Ethereum, Polygon, Fantom, Avalanche, Optimism, BNB Chain, and Celo.

In doing so, 0x Labs also claimed this facility to be 50% less expensive than what the other leading NFT marketplaces such as OpenSea and LooksRare offer.

How Did ZRX Do, Though?

Although the coin did open under $0.2 at the time of its launch in 2017, within a few months, it managed to mark an all-time high of $2.7. However, the downfall and fluctuations that followed since have not made it easy for investors.

Over the course of the last four months, though, the token has had trouble breaching the $1 mark, which it managed to after rising by almost 50% post the launch of Coinbase NFT.

0x ‘s token ZRX is still stuck trading at $0.8

But the broader market bearish cues led to the price falling back to trade at $0.8 at the moment.

Indian Banks Approach NPCI Seeking Clarity on Crypto UPI Payments

Key Insights:

  • Leading Indian banks have asked NPCI for a formal directive on using UPI for crypto transactions.
  • Following a recent note from NPCI, major crypto exchanges disabled INR deposits through UPI.
  • NPCI has “no intentions” to issue a formal circular anytime soon.

The National Payments Corporation of India (NPCI), the country’s digital payments and settlement system, recently countered the use of the Unified Payments Interface (UPI) for cryptocurrency transactions.

However, the UPI operator hasn’t made a clear decision on the same to date.

Banks Seek Formal Directive from NPCI

Several Indian banks, some of which are shareholders of NPCI, have raised the issue during a recent meeting with the payment body, seeking clarification on using UPI payments for Bitcoin transactions.

Although the names of banks written to the NPCI remain unknown, few of its major shareholders include State Bank of India, Union Bank of India, and private banking giants such as HDFC Bank, HSBC Limited, and Citi.

Banks in the country have reluctantly withdrawn UPI for crypto trading, following NPCI’s informal “verbal instructions,” according to an Economic Times report. 

UPI’s use of crypto came under the lens after global giant Coinbase first allowed its users to utilize the facility to make rupee deposits for buying cryptocurrencies. The crypto platform later blocked the feature three days after its launch in India.

An NPCI official told ET that it is unlikely that the payment body would issue any such circular soon, and there are “no intentions” to do so. If issued, bankers are sure that they would fully comply with the NPCI’s decision. Per a banker,

“If there is a formal circular to ban UPI for cryptos or VDAs, whatever is the nomenclature, the crypto industry in all likelihood would legally contest it — as they had done when RBI imposed a ban in April 2018.”

The key reason behind seeking clarification is that several banks did not understand NPCI’s decision, as the regulator is silent on IMPS (instant payment service). The meeting also discussed this issue, the banker noted.

The banker posed a question to the NPCI officials during the meeting,

“So, one may wonder whether IMPS can be used to transfer money to a crypto platform? We have no clarity, though I have a more fundamental question: Is NPCI authorized to impose an informal ban on UPI when the payment framework is governed by the Reserve Bank of India (RBI).”

The country’s central bank has been one of the most vocal oppositions regarding crypto trading. Crypto exchanges in India have faced scrutiny all through the pandemic times. In April ’21, the RBI sent out an unofficial letter to banks in the nation, asking them to stop providing services to crypto exchanges.

Why the Dilemma?

Following NPCI’s note early this month that it was “not aware” of any crypto exchanges using the UPI system, crypto wallet Mobikwik and PayTM Payments Bank have also withdrawn services from such platforms. 

It is clear that payment regulators in India appear to avoid any regulatory wrangling over the matter.

Also, banks are wary about dealing with crypto providers and companies. This is because the RBI has been strangely silent on this matter so far. NPCI, although can clarify its stance on whether UPI is applicable for cryptos, cannot unilaterally decide on it.

Kraken Receives Full Financial License in UAE, Sets Up Middle East HQ

Key Insights:

  • Kraken enters Dubai’s fast-growing crypto community after receiving a full financial license.
  • Kraken has established its Middle East HQ in Abu Dhabi.
  • The exchange will soon allow investors to trade crypto directly in UAE dirhams.

Following Binance and FTX, the veteran US cryptocurrency exchange Kraken gets a green signal to operate in Abu Dhabi, but this time, a full financial license.

Emirates has been continuously evolving as a virtual asset community by embracing a slew of global crypto exchanges and services in recent times. Kraken, being the latest, has received a Financial Services Permission (FSP) license from the Abu Dhabi Global Market (ADGM).

Whereas the world’s largest crypto exchange, Binance, only holds an in-principle license – a preliminary approval – to operate in the UAE.

The UAE’s international financial center said in a Monday release,

“Kraken is the first global cryptocurrency exchange to receive a Financial Services Permission (FSP) license to operate a regulated virtual asset exchange platform in the ADGM to service the needs of the Middle East and North Africa region.”

Kraken Establishes Middle East Headquarters

Kraken has set up its regional headquarters in the capital of the United Arab Emirates. The new unit will be headed by an experienced senior executive to drive its UAE business and plans, the release noted. However, the supervisory board remains unknown.

This month, Kraken’s CEO Jesse Powell released a statement that the company has shut down its headquarters in San Francisco after blaming the city for not ensuring public safety.

The UAE’s FSP license will allow Kraken’s 8 million user base to invest, trade, and deposit crypto assets such as Bitcoin and Ethereum directly in dirhams (AED).

Per Curtis Ting, Managing Director of EMEA at Kraken,

“We are delighted to have received full approval, and to soon launch regulated AED markets that will sit adjacent to Kraken’s industry-leading ecosystem of crypto products, including staking, spot markets across 120+ crypto assets, regulated futures, and our forthcoming NFT marketplace.”

Last December, the global crypto exchange platform considered opening a non-fungible token (NFT) marketplace to attract collectors and speculators.

“Phase one was speculation, phase two is buying art and supporting artists, phase three is going to be functional uses of NFTs,” said Powell in an interview with Bloomberg News.

The push comes as larger rivals, including Binance and FTX exchange, have already launched their NFT marketplaces, while millions have signed up for Coinbase Global Inc.’s NFT waitlist.

Middle East – Most Preferred Destination for Crypto Exchanges

Curtis Ting calls the UAE one of the most “financially innovative jurisdictions in the world.” According to data compiled by Chainalysis, the country is the Middle East’s third-largest crypto market, trailing Turkey and Lebanon. It has a transaction volume of about $26 billion.

Ronit Ghose, global head of fintech and digital at Citi, told CNBC on Thursday,

“One of the reasons we see an influx of entrepreneurs, builders, operators and developers coming into Abu Dhabi and Dubai … is because there is a sense of greater regulatory clarity at ADGM, in Dubai, and at a federal level.”

He added that the region is beginning to establish itself as both crypto and a web3 hub.

That aside, the country, though being more “crypto-friendly” in the eyes of market players, has been “gray listed” by the world’s leading anti-money laundering watchdog, the Financial Action Task Force (FATF). This is because the Gulf country isn’t sufficiently stemming illegal financial activities, the regulator noted last month.

Coinbase Set To Acquire Turkish Crypto Exchange for $3.2B in May

Key Insights:

  • Reports indicate Coinbase will be acquiring BTC Turk for $3.2 billion.
  • Coinbase’s expansion is noting no hiccups with the recent launch of its NFT marketplace.
  • The acquisition comes at a time when the market is stuck in an uncertain zone.

The world’s second-biggest cryptocurrency exchange, Coinbase, is set to take ownership of the nine-year-old Turkish cryptocurrency exchange, BTC Turk, by May.

Coinbase has been eyeing the opportunity for a while now, and after negotiations, the deal has been finalized at $3.2 billion, down from $5 billion.

Merhaba Coinbase!

The exchange, which boasts of over 4.5 million users, was the first cryptocurrency exchange in Turkey when it launched in 2013 and currently works with seven major banks in the country, allowing for the transfer of money through them.

Last year, the exchange conducted transactions worth 1.7 Trillion Turkish Lira, which translates to approximately $116 billion. Acquiring BTC Turk would open doors for Coinbase to expand into the country, which has a significant presence of crypto there.

As reported by FXEmpire, the country last year was the sixth-largest country when it came to profitability, with investors gaining over $4.5 billion in profits in cryptocurrencies.

But acquisitions aren’t the only way Coinbase is targeting growth, as just recently, the company launched its own NFT marketplace’s beta version and is gearing up for an official launch in the near future. This shows the yearning Coinbase has to become the biggest cryptocurrency exchange on the planet.

The Crypto Market Today

While the deal will be completed in May, penning it now makes sense since the market seems to be recovering slightly. But on a broader scale, it is utterly uncertain as to which direction it could take.

The market has been struggling with around $2 trillion since the first week of January, with the level flipping the trend right as it is about to be breached.

One attempt at the beginning of this month failed again, and now, as the crypto market nears $2 trillion once again, the odds are looking in its favor.

The total crypto market valuation is nearing $2 Trillion once again | Source: TradingView

The last time $2 trillion was breached, the market was already pretty much overbought and ended up overheating.

Since the cooldown, though, the rally seems to be more sustainable since, at the moment, the market is building up to be bullish once again without being overbought.

Thus, the acquisition could prove to be profitable if it finishes around the time when the market is bullish as well.

NFT Marketplace OpenSea Files New Trademark Applications

Key Insights:

  • Leading NFT marketplace OpenSea looks to expand with trademark applications for NFT and crypto services.
  • OpenSea owner, Ozone Networks, Inc., filed the trademark applications to register OpenSea and its logo.
  • A pickup in NFT activity in April could spell better times ahead for OpenSea and other NFT marketplaces.

It was an impressive start to 2022 for OpenSea, which saw NFT trading volumes hit an all-time high in January.

According to Dune Analytics, ETH trading volume hit $4.97bn in January, surpassing August’s previous ATH of $3.42bn.

In February and March, however, trading volumes eased back considerably.

OpenSea Files NFT and Crypto-related Trademark Applications

DC Trademark Lawyer Michael Kondoudis took to Twitter on Wednesday to announce the filed trademarks.

According to the tweet,

Ozone Networks, Inc., the owner of OpenSea, submitted two new trademark applications to the register OpenSea and its logo on April 15, 2022.

The filings are to cover a variety of virtual, crypto, and financial goods and services. These include,

  • Cryptocurrency and digital asset wallets
  • NFTs and NFT minting
  • Cryptocurrencies, digital tokens, and digital collectibles
  • Digital, virtual, and cryptocurrency trading

Kondoudis opined,

“It looks like OpenSea may be sensing some competition and is preparing its trademarks and brand for more active participation in the virtual economy of the Metaverse.”

Kondoudis concluded,

“We expect the number of trademark filings for NFT, crypto, and virtual asset products and services from the financial services sector to increase in the next 12 months as brands come to appreciate the need for protection for virtual and crypto currency financial services.”

OpenSea Trademark Applications Coincide with CoinbaseNFT Launch

This week, news hit the wires of CoinbaseNFT going live. According to the report, Coinbase launched its web3 NFT marketplace, CoinbaseNFT, on Wednesday.

Starting with a beta version, only a handful of features will reportedly be available to users. Built on the Ethereum blockchain, CoinbaseNFT will compete with OpenSea by not charging transaction fees for a limited time.

For OpenSea, it has been a mixed 2022, with trading volumes taking a hit in February and March.

In February, ETH trading volume fell to $3.58bn, which continued to sit above August’s previous ATH.

ETH trading volumes took a bigger hit in March, however.

According to Dune Analytics, ETH trading volumes fell to $2.49bn in March, well below August’s $3.42bn and January’s $4.97bn.

For OpenSea, several factors may have contributed to the downward trend in trading volumes. These could include crypto prices, increased illicit activity, and the increased appetite for cryptocurrencies.

One other factor may also be an increase in the number of NFT marketplaces.

This year, LooksRare (LOOKS) launched in January, with January trading volumes reportedly surpassing OpenSea trading volume. Other marketplaces have launched ahead of the CoinbaseNFT launch, though CoinbaseNFT may become OpenSea’s biggest near-term rival.

What Next For 0x Protocol’s ZRX After Historic Rally?

Key Points

  • Coinbase announced a partnership with 0x Protocol to power its NFT marketplace on Wednesday.
  • The news sent 0x Protocol’s native ZRX token surging 50% higher on the day.
  • But against a difficult macro backdrop for altcoins, it may be too early to bet on a ZRX bull run.

What Happened?

On Wednesday, cryptocurrency exchange Coinbase released the beta version of its NFT marketplace for a select number of customers.

The exchange announced that it had partnered with 0x Protocol, a multi-chain liquidity aggregating protocol that supports both fungible (ERC20) and non-fungible (ERC-723) tokens, to power its new NFT marketplace and reduce gas fees by as much as 54%.

As a result of the announcement, ZRX, the native governance token that powers the 0x Protocol, saw a historic rally, gaining over 50% on the day to close above $1.0 per token for the first time in 2022.

That was the cryptocurrency’s best one-day performance since February 2021, when ZRX was rallying in tandem with a broader alt-coin melt-up.

Unsurprisingly, trading volumes for ZRX have surged, with CoinMarketCap data showing 24-hour the value of ZRX to have changed hands spiked 3500% to just over $1.4B.

ZRX/USD extended gains early during Thursday trade to hit fresh year highs at $1.178, but the cryptocurrency pair has since pulled back to probe the $1.0 level.

ZRX Chart
ZRX/USD rallies to fresh annual highs above $1.0 per token. Source: FX Empire

“We’re thrilled that Coinbase is using 0x to power their new social marketplace for NFTs and anticipate this launch will unlock a massive wave of new users into the blockchain space,” said Will Warren, Co-Founder and Co-CEO of 0x Labs.

“We look forward to seeing many more apps and marketplaces take advantage of the 0x Protocol’s robust NFT swap feature set and industry-leading gas efficiency in the coming future”.

What Next for ZRX?

According to CoinMarketCap’s cryptocurrency exchange scoring system, Coinbase scores as the world’s second-best exchange, ranking ahead of the likes of Kraken, FTX, Gemini, and KuCoin and only lagging behemoth Binance.

One could reasonably argue that in securing a partnership with Coinbase, a household name in the cryptocurrency space, the probability that more crypto exchanges, service providers, and DeFi protocols turn to 0x Protocol for liquidity provision has significantly improved.

Those betting that the Coinbase partnership will be the catalyst of a new bull run for ZRX will likely be on the lookout to see if the cryptocurrency retests support in the form of the January 2022 highs at $0.99 and the earlier April highs at $0.95.

At such levels, the bulls might look to reload on longs whilst targetting a retest of H2 2022 highs in the $1.60s.

However, from a technical standpoint, things aren’t yet looking too bullish. ZRX/USD looks to still be trapped within a long-term descending triangle that has been in play since early 2021, with $0.50 acting as the floor.

ZRX Chart
ZRX/USD in long-term descending triangle pattern. Source: FX Empire

These patterns tend to proceed a bearish breakout.

The macro backdrop isn’t too favourable for cryptocurrencies right now, given the environment of a generally strengthening US dollar and rising US interest rates with the Fed looking to tighten financial conditions in order to combat inflation.

Given its solid fundamentals, ZRX might be a good altcoin candidate to outperform when macro conditions turn more favourable. However, for now, the bulls may have to remain patient.

 

Coinbase NFT Beta Goes Live With No Transaction Fees

Key Insights:

  • Coinbase announced the launch of its NFT marketplace’s beta version.
  • While some features will not be available at the moment, Coinbase will also remove the transaction fees.
  • On NASDAQ, Coinbase’s performance did reflect the community’s missing hype.

The world’s second-biggest cryptocurrency exchange Coinbase announced the launch of its web3 NFT Marketplace, Coinbase NFT, today. The company has begun with the beta version first, where only a handful of features will be available for the users. 

Coinbase Brings NFT to Its Users

Built on the Ethereum blockchain, Coinbase NFT boasts of a wide range of NFT collections already available on the marketplace, including the likes of Cool Cats and Doodles, the floor price of which is 19.99 ETH (61.2k) and 10 ETH (30.6k), respectively.

Since this is the beta, Coinbase has stated that for a limited time, they will not be employing any transaction fees, but when they do, it will be as per the industry standards. Iterating on the same, the announcement noted,

“We’re starting with a small set of beta testers who’ll be invited based on their position on our waitlist. We’ll start at the top of the waitlist and open access to more people over time. Beta testers will be able to create a Coinbase NFT profile to buy and sell NFTs using any self-custody wallet, whether that’s Coinbase Wallet or something else.”

Coinbase will also be focusing on building a solid NFT community on the marketplace itself by allowing commenting under collections and creating a conversation through which creators and collectors can interact.

Going forward, Coinbase NFT will also be adding drops, minting, token-gated communities, and the option to buy NFTs with a Coinbase account or a credit card. And the marketplace will be adding support for other blockchains as well, eventually decentralizing the entire platform.

Coinbase Is on the Cards, Not on the Charts

While the announcement is a big step for the cryptocurrency exchange, the same did not reflect in its token’s price action. At the time of writing, intraday prices had Coinbase trading at $147, down by 4.47% from its opening price of $154.

Coinbase’s price does not seem to be in line with the expectations from the Coinbase NFT launch

While there is time before the market closes and as the news picks up attention, prices could climb back and possibly even post green, for now, Coinbase NFT failed to impress the stock market investors.

Uniswap Labs Class Action Suit Has Little Impact on UNI

Key Insights:

  • Uniswap Labs gets hit with a class action suit for allowing the fraudulent activity.
  • Earlier this week, Uniswap was in the news for the launch of a new ventures division.
  • Uniswap is not alone in being sued by users, with Coinbase recently getting hit with a class-action suit.

Uniswap (UNI) enables users to swap, earn, and build on a decentralized crypto trading protocol. With heightened regulatory scrutiny in several key jurisdictions, exchanges are also coming under fire from crypto traders and enthusiasts.

Last month, Coinbase users filed a class-action suit against the exchange. The claim alleges that Coinbase is selling securities illegally.

Class action lawsuits bring unwanted attention amidst heightened regulatory scrutiny.

Uniswap Users Accuse Uniswap Labs of Allowing Fraudulent Activity

This week, news hit the wires of a class action suit against Uniswap Labs. According to media reports, an investor has alleged that Uniswap Labs and its investors are responsible for losses resulting from a failure to comply with securities laws.

The investor alleges that a failure to implement appropriate KYC measures and register as a broker-dealer with the SEC resulted in cybercriminals carrying out pumps and dumps on the Uniswap Protocol.

The investor also claims Uniswap founder Hayden Adams and investors Paradigm, AH Capital Management, Andreessen Horowitz, and Union Square Ventures are culpable.

For Uniswap Labs and Uniswap’s native token UNI, there was little reaction to the news of the class action suit. Currently, there are grey areas in the U.S regulatory environment, with the Ripple v SEC case considered by many as pivotal to what lies ahead from a regulatory standpoint.

The latest news comes as Uniswap Labs embarks on a new journey with Uniswap Labs Ventures. On Tuesday, FX Empire reported on the launch of Uniswap Labs Ventures, which targets Web3.

UNI Price Action

At the time of writing, UNI was down 0.29% to $9.630. The early pullback comes after two consecutive days in the green. On Wednesday, UNI rose by 3.76%, following a Tuesday gain of 3.67%.

UNIUSD 140422 Daily
UNI finds support following news of Uniswap Labs Ventures launch.

Technical Indicators

UNI will need to avoid the $9.554 pivot to move through the First Major Resistance Level at $9.836.

Broader market sentiment would need to improve to support a breakout from a Wednesday high of $9.730.

In the event of another extended rally, UNI should test the Second Major Resistance Level at $10.013.

A fall through the pivot would bring the First Major Support Level at $9.377 into play. Barring an extended sell-off throughout the day, UNI should avoid sub-$9.300. The Second Major Support Level sits at $9.093.

UNIUSD 140422 Hourly
Avoiding the pivot would give UNI a run at $10.00.

The EMAs and the 4-hourly candlestick chart (below) send a bearish signal. UNI sits below the 50-day EMA at $9.924. This morning, the 50-day EMA pulled back from the 100-day EMA. We also saw the 100-day EMA retreat from the 200-day EMA; UNI price negative.

UNI would need to move through the 50-day EMA to target April’s current high of $12.300.

UNIUSD 140422 4-Hourly
A move through the 50-day EMA will bring April’s high of $12.300 into play.