A rundown of crypto's no-good, very bad week
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Illustration: Annelise Capossela/Axios
It's been a week to test the faith of crypto true believers — and it's only Wednesday.
The big picture: Some of the highest profile crypto companies still standing have been pummeled by a flurry of federal charges, raising fresh questions about whether the crypto ecosystem can survive in its current configuration, or at all.
A quick rundown:
- On Tuesday, the SEC brought civil charges against Coinbase — the largest crypto exchange in the U.S. — alleging that the company is operating as an unregistered securities brokerage in violation of federal law.
- Shortly after, several states announced that they had started legal proceedings that could effectively shut down Coinbase's trading operations within their jurisdictions.
- On Monday, the SEC levied some similar charges against Binance — the world's largest crypto exchange. It also charged Binance founder and controlling shareholder, and general crypto bigshot, Changpeng Zhao, with violating securities laws.
Context: These actions are shaking some of the biggest remaining cornerstones of the crypto world, following the high-profile collapse of crypto exchange FTX last year.
- That, of course, resulted in a range of criminal charges being brought against one-time crypto golden boy Sam Bankman-Fried.
- Oh, and the Justice Department also charged Do Kwon, the creator of the TerraUSD — a supposed "stablecoin" that collapsed in 2022, with fraud earlier this year. He was arrested in Montenegro on charges of using a false passport; both U.S. and South Korean authorities are seeking his extradition.
💭 Our thought bubble: This isn't the first time crypto backers have run afoul of legal authorities. But there's something about this current flurry that starts to feel like we're approaching the crypto end-times — or at least the end of one crypto era.
- And that vibe shift has just as much to do with the emergence of a new technology craze du jour for investors to obsess over — in the form of generative AI — as it does with the legal pressure that crypto entities like Binance and Coinbase are facing.
