The Week in Crypto – Market Makers, Regulation, and Congestion
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This week in the crypto world we’ve seen major market makers leaving crypto in the US, the New York Attorney General leading the way in crypto regulation, and Binance planning to implement the Lightning Network thanks to Ordinals screwing up the blockchain.
Never a dull moment.
Jump Crypto and Jane Street Leaving US
Top crypto market-making companies Jane Street and Jump Crypto this week announced that they are reducing their involvement in crypto in the US due to increased regulatory uncertainty.
Bloomberg reported that the two firms, which are pivotal in providing liquidity for the crypto market, are pulling out of the US because of the tone adopted by lawmakers and regulators regarding policing the space, with Jane Street leaving the crypto space altogether. The news was not welcomed by crypto traders as a reduction of liquidity will mean more exacerbated spikes during large moves.
However, critics have already suggested that such a tax wouldn’t solve anything, and would instead push Bitcoin mining into regions where there is even less oversight.
New York Attorney General Does SEC’s Job For Them
New York Attorney General Letitia James this week announced landmark legislation to tighten regulations on the cryptocurrency industry, taking the lead over the various regulatory bodies headquartered in the state.
Seemingly fed up with the intransigence of the likes of the Securities and Exchange Commission in actively regulating the crypto space, James has taken it upon herself to “protect investors, consumers, and the broader economy” while not running crypto entities out of town. James has had several noteworthy run-ins with crypto companies in the past, most notably Tether, and her experience apparently led her to realizing that something needed to be done, and the SEC wasn’t going to do it.
Bitcoin Congestion Pushes Binance Towards Lightning
Binance revealed this week that it is implementing the Lighting Network for Bitcoin withdrawals following the congestion issues experienced on the blockchain. The popularity of Bitcoin’s BRC-20 tokens, namely the Ordinals project, led to some 400,000 transactions being stuck in the queue (‘mempool’) over the weekend and transaction fees being pushed to two-year highs.
Binance postponed withdrawals twice due to the congestion but hinted that it is planning to follow other exchanges and implement the Lightning Network to ease such issues in the future. The
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Filed under: Bitcoin - @ May 13, 2023 8:00 am