The Fed and the SEC are in a custody battle

Good morning. More dominoes may be about to fall in the 3AC saga, Binance.US offers zero-fee bitcoin trading, and a decentralized derivatives exchange plans a move off Ethereum and onto Cosmos. All that and more today!

Market Update (as of 8:14am ET):

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Top 5:

1. Three Arrows Capital on brink of default, owes Voyager around $657M. The now infamous crypto fund must pay off its entire debt ($657 million) to Voyager by June 27th or face default. Voyager announced on Wednesday that the firm "intends to purse recovery from 3AC and is in discussions with the company’s advisors regarding the legal remedies available," however it remains unclear how much of the balance owed Voyager will actually be able to recover. Some analysts have indicated that Voyager's exposure to 3AC poses "survivability risk" for the company. Voyager received a $500 million credit line from Alameda Research last week but use of those funds are somewhat restricted and are intended as a safeguard for customer assets.

2. Binance.US’ zero-fee bitcoin trading may trigger fee war for exchanges. The US arm of the world's largest crypto exchange announced on Wednesday that they will eliminate fees to trade spot bitcoin against USD (cash), USDT, USDC, and Binance USD. The move will put pressure on other industry players to eliminate fees as well. Coinbase currently offers a subscription service that provides no-fee trading, but a volume limit is in place.

3. US Fed evaluating SEC’s position on digital assets custody. Federal Reserve Chairman Jerome Powell said on Wednesday that the SEC's recent directive on custody of digital assets may throw a wrench into plans for how the central bank and banking regulators view digital assets held by lenders. The SEC has advised firms holding customers’ digital assets, like an exchange, that those firms would need to consider customer assets on their balance sheet. During a Senate Banking Committee hearing Powell said, "custody assets are off balance sheet, have always been," and "the SEC made a different decision as it relates to digital assets for reasons it explained, and now we have to consider those.”

4. Celsius’ woes spark boom in Ledger sales. During an interview with Blockworks, Ledger's Chief Experience Officer said that sales “jumped 4.5x day-over-day on the Celsius news, and continue to be strong to this day." The company, which manufacturers hardware wallets, is now generating the same amount of revenue each quarter as they were annually in 2020. Ledger also announced a series of security updates and Ledger Marketplace, a multichain NFT distribution platform.

5. dYdX to expand to its own blockchain in the Cosmos ecosystem. Popular crypto derivatives exchange dYdX is expanding to its own Cosmos-based blockchain. The protocol is the largest decentralized derivatives exchange, with more than $650 million in trading volume over the last 24 hours. According to the announcement from the dYdX team, the move to Cosmos will help make dYdX more decentralized and position the DEX for long-term competitiveness. dYdX currently runs on StarkEx, an Ethereum Layer 2 scaling network. Plans for the StarkEx chain are still being discussed.

Updates and other stories:
- Nexo hires Citigroup to advise on acquisitions...Read More
- Crypto.com receives approval in principle to offer services in Singapore...Read More
- eBay snaps up NFT marketplace KnownOrigin...Read More

Top Sharers of the Crypto Top 5:
1. Donna Y. - Nashville, TN
2. Jake Y. - Greenville, SC
3. Forrest H. - Evansville, IN

External Resources:
1. Cryptopedia from Gemini - if you see a word, acronym, or phrase in this newsletter that you don't understand, there's a good chance you can find an explanation here
2. Crypto Explainer+ - intro level courses on Bitcoin, Ethereum, decentralized finance, NFTs, and more
3. Crypto Jobs! - looking for a new job? Check out this page from Anthony Pompliano with hundreds, if not thousands of listings

Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant, or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.