The U.S. Securities and Exchange Commission (SEC) has begun to intensify its crackdown on the crypto industry, with recent enforcement actions having a negative impact on crypto prices last week and earlier this week.
SEC is concentrating to stablecoin issuers. The SEC’s most recent crackdown on stablecoins came on Feb. 13, with the filing of a Wells notice to BUSD’s issuer, Paxos Trust. Despite Paxos’ denial that BUSD is a security, some lawyers still believe the answer isn’t that simple, raising concerns that other leading stablecoin issuers, such as Circle’s USDC, could be next in line.
The SEC is also “touching” the centralized exchange (central executive board) by how they can with the client’s money As a qualified supervisor. On Feb. 15, a five-member SEC panel voted on whether to tighten restrictions on crypto firms holding digital assets.
Centralized staking platforms have also come under scrutiny from the SEC, and because staking schemes are profitable for investors, the SEC considers these services to be securities. On February 9, the SEC began cracking down on these schemes, ordering Kraken to shut down the Earn scheme and pay a $30 million fine.
Interestingly, given recent SEC activity and certain decentralized solutions such as GMX (General Motors), Lido (i would like) and manufacturer (RM) is skyrocketing.
Let’s take a closer look at what happens to decentralized service providers.
Maker’s DAI benefits from Paxos outflows
After the SEC issued a Wells Notice to Paxos, the amount of BUSD redemptions increased to $342 million within 24 hours.
While Binance says it will continue to support BUSD, its market cap will decrease over time Paxos is prohibited from minting new tokens.
Stablecoin market cap.Source: Nansen
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Despite the slowdown in withdrawals, Bdollar’s market cap has fallen from $16.2 billion before the SEC’s announcement on Feb. 13 to $15.4 billion on Feb. 14. A market capitalization of $15.4 billion marks a monthly bottom for the third-largest stablecoin.
The market capitalization of BUSD. Source: CoinGecko
Maker, the issuer of the decentralized stablecoin DAI, has seen increased usage and fees following an enforcement action by the SEC. In seven days, Maker fees increased by 8.37%, and spiked to $667,000 in 24 hours on February 13.
Maker fees and token holders.Source: Token Terminal
Following the SEC enforcement announcement, Maker fees are likely to continue to rise due to uncertainty surrounding other major stablecoins like USDC.
GMX hits new highs as CEX uncertainty mounts
GMX, the native token of decentralized derivatives exchange GMX, has previously benefited from high outflows from large centralized exchanges. GMX is on the rise cost and token price. Binance Net Payouts Hit $788 Million Within 24 hours of the SEC’s announcement on February 13, the price of GMX surged to an all-time high of $67.47. On February 15, Binance recorded another net outflow of $535 million.
Binance daily net flow.Source: Dunes
On February 10, GMX’s fees hit an all-time high of $5.7 million. With daily active users up 16.2% to 2,150, the outflow from Binance could fuel continued growth for the talented exchange.
Investors appear to be betting on the growth of GMX, making it the highest-yielding coin on Feb. 14, up 12.9% on a seven-day basis.
The main indicator of GMX.Source: Token Terminal
Cosmopolitan to gain market share in coming months
Immediately after the SEC fined Kraken $30 million, the price of BTC and altcoins fell, while the price of LDO rose.
With LDO up 13.2% in the 24 hours following the SEC’s announcement on Feb. 9, investors seem to think Lido can repeat the same mistakes as it was one of the top 12 performing tokens, up 16% in 7 days .
In addition to the increase in value, usage of Lido as a decentralized staking platform has skyrocketed, reaching $35.8 million in fees in 30 days.
The main indicator of Lido.Source: Token Terminal
While Lido’s average daily active users have not increased, the potential for future law enforcement action For Coinbase May result in an increase in Lido’s market share among Ether stakeholders.
It’s clear that the SEC’s recent spate of crackdowns on centralized staking, centralized exchanges, and stablecoins is causing investors to turn to decentralized solutions like GMX (General Motors), Lido (i would like) and maker (MKR).
- Lido considers selling or staking $30 million in ETH from treasury
- Coinbase CEO Says Staking Is Not a Security, Prepares to Defend in Court
As reported by Cointelegraph