Binance

US Judge Dismisses Motion Against Bancor After Finding Allegations Inadequate to Give It Jurisdiction

24/02/2021 by Idelto Editor

A Manhattan federal judge has dismissed a securities fraud class action against Bancor after ruling that the plaintiff’s allegations were not enough to give the court jurisdiction. According to a report, the dismissal of the case against represents the first such ruling “in a suite of similar cases filed by crypto investors represented by Selendy & Gay and Roche Cyrulnik.”

US Courts Have no Jurisdiction

In their motion against Bancor, which has offices in Switzerland and Israel, the plaintiffs led by Timothy Holsworth, had argued that the protocol’s “BNT token is a security and thus falls under U.S Securities law.” In addition, the plaintiffs also alleged that Bancor had “made numerous false statements and omissions that led reasonable investors to conclude that the BNT tokens were not securities.”

However, in their defense, Bancor countered by arguing that a U.S. trial would be “inappropriate due to the company’s international and geographical nature.” According to a report, Bprotocol Foundation is incorporated under Swiss law and the organization has offices in Zug, Switzerland, and Tel Aviv, Israel. Additionally, the four founders of Bancor live in Israel.

US Investors Versus Non-US Token Issuers

Meanwhile, in their submission, the plaintiffs had insisted the 587 BNT tokens purchased on 4 September 2019 by one Wisconsin resident, William Zhang gave U.S. courts jurisdiction. Zhang, who initially filed the lawsuit, bought the tokens valued at $212.50 on Coss, a digital exchange based in Singapore. However, in dismissing the case, the US judge Alvin Hellerstein said:

Wherever the current business location of Bancor, New York is not a reasonable and convenient place to conduct this litigation.

In addition to the lawsuit against Bancor, the plaintiffs have filed motions against issuers of EOS, TRX, KNC, and OMG. Centralized exchanges based outside the U.S. like Binance and Kucoin are also included in the lawsuit.

What are your thoughts on this ruling by a U.S. judge? You can share your views in the comments section below.

Binance Suspends Ethereum and ERC-20 Token Withdrawals Before Quickly Reversing Course

23/02/2021 by Idelto Editor

The rollercoaster-ride in cryptocurrency prices on Monday was accompanied by Binance’s fresh restrictions for ethereum and ERC-20 tokens.

Ethereum Network Congestion Fingered as the Culprit for the Temporary Halt

Through the official Binance Twitter account, one of the world’s largest cryptocurrency exchanges by volume, announced that it had “temporarily suspended withdrawals of $ETH and ethereum-based tokens” due to network congestion while underscoring that user funds were SAFU (Secure Asset Fund for Users).

#Binance has temporarily suspended withdrawals of $ETH and Ethereum-based tokens due to high network congestion.

Rest assured funds are #SAFU and we apologize for any inconvenience caused.

Updates to follow.

— Binance (@binance) February 22, 2021

Although Binance has since reversed its earlier decision and restored service in an announcement 37 minutes after its first tweet, traders were quick to pile on with the criticism. This latest move came amid a spike in Ethereum gas costs and a backlog that quickly escalated past 151,000 pending transactions. Binance CEO Changpeng Zhao corroborated the stress on the system, noting that gas shot past “+1200” during the latest congestion.

ETH is super congested now, at 1200+ gas. @Binance have suspended withdrawals.

There was a conspiracy theory that Binance is deliberately making ETH gas fees high. 😂 Let’s see it come down a bit. pic.twitter.com/tNK9b3b9OK

— CZ 🔶 Binance (@cz_binance) February 22, 2021

Binance has already become a big target among the crypto community after being blamed for persistently high gas costs. Some claim that the congestion is a concerted effort on the part of Binance to attract more users to its Binance Smart Chain. However, given the tremendous transaction volumes and gas fees that Binance pays to the Ethereum network weekly, this claim is hard to corroborate

Binance Outage Underlines the Need to Scale

Yet, together with other recent events like the AWS problems that surfaced last week, this latest service outage begs the question as to whether centralized exchanges are capable of handling the latest torrent of investor flows. Moreover, the rollout of Ethereum 2.0 has brought to light similar scaling issues and whether already clogged blockchains can keep pace with advancing adoption.

For some market participants, the answer lies in liquidity aggregators. While service interruptions have dotted the cryptocurrency landscape for years and become commonplace during periods of serious volatility, aggregators that pool liquidity from centralized (CEX) and decentralized exchanges (DEX) have cobbled together a patchwork solution. Still, questions linger about the security of their custody along with blockchain interoperability.

Offerings like Orion Protocol have addressed many of these challenges by aggregating liquidity in a hybrid fashion from CEXs, DEXs, and now automated market-makers (AMMs). Aggregators are attempting to help decentralize the pressure and reverse the load issue strain felt by exchanges during peak periods while avoiding the custody question.

Still, for traders on centralized exchanges, load balancing issues and volatility remain a scourge for the ecosystem as the latest Binance outage underlines.

Do you think withdrawal suspensions will become the norm or a solution to network congestion will be found? Let us know in the comments section below.

Binance Blamed for Purposely Choking Ethereum’s Network

22/02/2021 by Idelto Editor

The recent ramp higher in cryptocurrency prices has assuredly attracted its fair share of cheerleaders and detractors alike, but the reality of this climb has been a concurrent increase in network fees from rising transaction volumes.

Binance is Blamed for Purposely Choking Ethereum’s Network to Drive More Users to Its Own Platform

The resulting volumes have clogged networks like Ethereum, which have seen gas costs climb almost 20x over the last 12 months. For the growing DeFi market, these sky-high costs have elicited significant criticism from the community and mobilized the ecosystem to hunt for more affordable options. Enter Binance, which may dethrone Ethereum as the new DeFi hotspot due to its interoperability and lower transaction costs.

Binance Smart Chain (BSC), which works on a Proof of Authority (POA) model, is centralized (Binance picks the authorities that run each node) relative to Ethereum’s entirely decentralized approach. This has prompted some users to criticize the approach, believing that Binance is abusing its clout and market power to intentionally clog the Ethereum network. However, this sharp critique misses the bigger picture.

A quick look at wallet and gas data highlights that Binance is the largest single gas spender. For instance, the image above tweeted by Nansen AI highlights from February 12th to the 18th, Binance spent the equivalent of nearly 5,000 ETH in gas alone. Although many users are quick to criticize publicized data of Asian exchanges which are known for inflating trading volume, this data can be corroborated by Etherscan data.

The data demonstrate that both in terms of gas spent and transaction volume over the last seven days, wallets attributed to Binance accounted for six out of 10 of the most active wallets in the entire Ethereum ecosystem. While it could be inferred that Binance’s volume is propelling Ether costs upward and doing so intentionally to attract more volume to its smart chain, this argument misses out on the blockchain interoperability that Binance has promoted. Moreover, Binance hasn’t shut off the taps to Ethereum, making the argument of it clogging the network somewhat moot.

Binance Pancakeswap Has Overtaken Uniswap

The costs of switching from Ethereum to Binance are very low, especially for smart contracts and Dapps. By improving the interoperability and reducing switching costs along with rebating developers who bring valuable projects online, Binance has built itself up as a formidable destination for all manner of activities.

Given the volumes of DeFi, any reduction in network fees and costs is likely to attract greater adoption. By filling this void quicker than competitors or more established chains, Binance is now home to PancakeSwap, which has overtaken Uniswap (based on Ethereum) in terms of volume.

Because the barriers of switching from Uniswap to PancakeSwap (which is effectively a copy of Uniswap on BSC), are fairly low, it’s no wonder why DeFi users have made the jump. Moreover, it has caused a sharp incline in Binance Coin’s (BNB) valuation, making transactions also more expensive on its own native chain.

Yet, unlike Ethereum, by building a more cost-effective ecosystem that rewards smart contract developers, Binance is actually incentivizing development and smart contract use, and not necessarily using its market power to clog other competing networks.

FTX Quick to Criticize

Still, that hasn’t been enough to silence critics like FTX, which blame Binance for the default chains where it sends transactions. In a recent tweet critique, cryptocurrency derivatives exchange FTX was quick to pile onto Binance’s withdrawal process which effectively defaults to promoting its own chains and creates a conflict due to the fees it reaps in return.

As a result, it has cost FTX dearly due to coins being sent to the wrong chains. Accordingly, the service has decided to pass along the extra costs to users in the form of a 5% deposit surcharge for tokens sent to the wrong chain. However, in large this argument speaks more towards user mistakes than Binance’s default settings.

While the Binance universe is undoubtedly growing, and exchange volumes speak credible truth to this reality, the self-promotion of its own tools will continue to spark the same sort of denunciations that marked the decentralized versus centralized exchange debate. Ultimately though, utility speaks the loudest.

What do you think – is Binance purposely choking the Ethereum network to gain more users? Let us know in the comments section below.

Bitcoin Futures Open Interest Smashes $15 Billion, CME Registers Over $33 Million in ETH Contracts

09/02/2021 by Idelto Editor

Following the revelation that Tesla now owns $1.5 billion in bitcoin, crypto spot markets across the board skyrocketed. Data shows that crypto derivatives markets also saw significant demand as bitcoin futures open interest tapped $15 billion on Monday. Moreover, this week was the start of ethereum futures on CME Group’s exchange, and ether-based futures registered $33 million worth on the first day of launch.

Bitcoin Futures Open Interest Jumps to $15 Billion

Bitcoin (BTC) derivatives markets are in high demand these days and other cryptocurrencies like ethereum (ETH) and bitcoin cash (BCH) derivative products are as well. Just recently, news.Bitcoin.com reported on Bit.com’s introduction of BCH options which saw volumes double every day since the launch.

Then on February 8, 2021, it was discovered that Tesla had purchased $1.5 billion worth of BTC, and the crypto asset saw its largest daily candle to date. Moreover, the action also caused massive demand for BTC futures and the crypto derivatives analysts over at skew.com tweeted about the subject on Tuesday.

Skew tweeted:

Bitcoin futures open interest new all-time-high yesterday >$15bln.

The open interest is an aggregate from all the derivatives exchanges that offer bitcoin futures including Kraken, Bybit, CME, Bitfinex, Bitmex, and many others. On Monday Skew also noted that “short positions are being unwound by leveraged funds on CME bitcoin futures.”

Skew has also has been discussing the recently launched ETH-based futures on CME as well. ETH/BTC sold off tweeted the following day on Tuesday. “ETH/BTC implied vol spread collapsed,” Skew added.

CME Group’s Ether-Based Futures Sees $33 Million Contracts on Day One

CME Group Inc (NASDAQ: CME) Exchange also launched its ETH-based futures product on Monday and contracts are dubbed ETH1. Contracts started to be initiated right away as soon as the market opened and by the closing bell, 388 contracts worth over 19,400 ETH were registered.

Following the ether futures introduction on CME, ETH spot markets reached a 2021 high at over $1,800 per token. Ethereum’s price has retreated from that range and hovers just above the $1,700 handle.

Michael Moro, CEO of Genesis Global Trading discussed the CME launch on Monday and said CME Group has helped bolster digital currencies into a new asset class. “CME Group has been an integral participant in the continued institutionalization of this asset class, and the launch of Ether futures is yet another milestone,” Moro said.

“Genesis is excited to continue to work closely with CME in this effort,” the executive added.

What do you think about the increased demand for crypto derivatives products and markets? Let us know what you think about this subject in the comments section below.

Crypto Derivatives Surge, Bitcoin Options Open Interest Climbs to $9.6 Billion

19/01/2021 by Idelto Editor

Bitcoin options open interest has reached $9.6 billion according to derivatives market data as the metric is nearing the high captured on January 7, 2021. Moreover, the aggregate open interest in bitcoin futures is steadily nearing all-time highs.

While cryptocurrency spot markets have consolidated, bitcoin-based derivatives markets have seen continuous action. At the time of publication, both bitcoin futures and options open interest has been rising significantly.

For instance, researchers at skew.com recently tweeted that “bitcoin futures open interest [is] quickly bouncing back to a new all-time high.” Skew also added that CME Group was now the largest open interest “by some margin.” Data from exchanges dealing with bitcoin futures shows that open interest continues to climb.

Okex holds the reins as far as bitcoin futures open interest today, followed by the platforms CME and Binance. These three leading bitcoin derivatives markets are followed by Huobi, Bybit, FTX, Bitmex, Deribit, Bitfinex, Kraken, and Coinflex respectively.

In addition to bitcoin futures nearing all-time highs in terms of open interest, ethereum futures and options have seen increased demand as well as the crypto asset’s spot markets near all-time price highs as well. Skew analytics indicates total ETH options interest is around $1.7 billion with Deribit commanding $1.5 billion. Deribit’s ETH options open interest is followed by Okex ($153M), Bitc.com ($41M), and Huobi ($9.7M).

Alongside the desire for crypto futures, bitcoin options have increased substantially during the first month of 2021. The estimated notional value of all open bitcoin options positions is $9.6 billion with an expiry set for January 29, 2021.

The crypto exchange Deribit commands the lion’s share of BTC options with 84.37% ($8.1B) of open interest. Deribit is followed by derivatives platforms such as Okex ($511M), Bit.com ($470M), CME ($398M), Ledgerx ($176M), and Huobi ($9.4M).

The aggregate of open interest on bitcoin options has swelled progressively over the last six months. Data from Bybit’s 24-hour long/short ratio shows shorts are up 50.64% while longs are 49.36%.

BTC longs and shorts stemming from Bitfinex according to Tradingview data shows longs are increasing while BTC/USD shorts have remained low.

The increased demand for bitcoin-based derivatives, follows BTC’s lifetime all-time price high of $42,000 recorded only 12 days ago. At the time of publication, BTC/USD spot market prices are still down 11.8% since touching the $42k handle.

Meanwhile, with the 258,818 BTC in options open interest, 99,753 BTC or $3.7 billion is set to expire in ten days.

What do you think about the recent increase in open interest for bitcoin derivatives like futures and options? Let us know what you think about this subject in the comments section below.