In a filing, the U.S. Securities and Exchange Commission (SEC) rebuffed Coinbase’s arguments over the regulator’s jurisdiction to bring a lawsuit against the exchange, and argued Coinbase was aware of potential legal violations years before they came into the regulatory crosshairs.

Leading stablecoin issuer Tether, in response to an exploit of the cross-chain router protocol Multichain, has frozen $2.5 million worth of its stablecoin USDT. The move comes after an apparent attack that left Multichain's Fantom bridge compromised and out of nearly $130 million.

Cryptocurrency firm Gemini has filed a lawsuit against Digital Currency Group (DCG) accusing it and its founder, Barry Silbert, of perpetrating "fraud" through Genesis, a DCG subsidiary. The move aims to recoup Gemini's funds tied to its Earn program, which were under the custody of Genesis.

Top stories in the Crypto Roundup today:

• SEC Fires Back at Coinbase, Says It Knew of Legal Risks for Years
• Tether Freezes $2.5M in USDT After Multichain Bridge Hack
• Gemini Sues DCG and Barry Silbert Alleging Fraud
• Ethereum Staking Hits New Record With 26.1 Million ETH Locked

SEC Fires Back at Coinbase, Says It Knew of Legal Risks for Years

In a filing, the U.S. Securities and Exchange Commission (SEC) rebuffed Coinbase’s arguments over the regulator’s jurisdiction to bring a lawsuit against the exchange, and argued Coinbase was aware of potential legal violations years before they came into the regulatory crosshairs.

The legal dispute stems from allegations made by the SEC last month, claiming that Coinbase was functioning as an unauthorized broker, clearinghouse, and exchange. The SEC alleges that Coinbase facilitated the trading of at least 13 different cryptocurrencies that are not registered as securities.

In its filing, the regulator said it would oppose any motion for judgment Coinbase might file, and asked a court to dismiss Coinbase’s argument, which alleges the lawsuit infringes the major questions doctrine.

The SEC wrote Coinbase is a “multi-billion-dollar entity advised by sophisticated legal counsel” which “ argues it was unaware that its conduct risked violating the federal securities laws, and suggests that by approving Coinbase’s registration statement in 2021 the SEC confirmed the legality of Coinbase’s underlying business activities – at that time and for all time.”

The regulator insisted Coinbase had “willingly adopted the very legal framework” established by the U.S. Supreme Court to decide whether certain cryptocurrencies fulfilled the specifications of federal securities laws.

The SEC also offered a preview of its counter-arguments against Coinbase's proposed motion for judgement, refuting Coinbase’s assertion that an investment contract must include a formal contract, and contesting Coinbase’s claim that investment contracts are merely asset sales if they're traded on secondary markets.

Tether Freezes $2.5M in USDT After Multichain Bridge Hack

Leading stablecoin issuer Tether , in response to an exploit of the cross-chain router protocol Multichain, has frozen $2.5 million worth of its stablecoin USDT. The move comes after an apparent attack that left Multichain's Fantom bridge compromised and out of nearly $130 million.

The attack drained the bridge of almost all of its wBTC, USDC, and USDT. Intriguingly, not all tokens present in the bridge were seized, and the stolen assets were not immediately liquidated, a move that usually follows such a breach.

The Fantom Foundation announced on Friday that Circle, the digital currency company, had frozen $60 million in USDC stored in three Ethereum addresses.

Multichain acknowledged the unusual activity and is conducting an investigation to understand the extent and implications of the attack.

Gemini Sues DCG and Barry Silbert Alleging Fraud

Cryptocurrency firm Gemini has filed a lawsuit against Digital Currency Group (DCG) accusing it and its founder, Barry Silbert, of perpetrating a "fraud" through Genesis, a DCG subsidiary. The move aims to recoup Gemini's funds tied to its Earn program, which were under the custody of Genesis.

According to the filing submitted to the New York County Supreme Court, Gemini had established a partnership with Genesis that allowed its customers to earn an annual yield of up to 7.4% on their digital assets. Genesis loaned these funds to various companies to generate the yield.

The filing alleges that Genesis “induced the Gemini Earn Lenders to lend by touting Genesis’s purportedly robust risk-management practices and a supposedly thorough vetting process of the counterparties to which it re-lent the assets,” and argues these claims “were lies.”

The lawsuit accuses Silbert of urging Gemini to keep its Earn program operational, despite at the time knowing Genesis “was massively insolvent,” and going as far as taking measures to conceal Genesis's billion-dollar deficit on its balance sheet. Genesis filed for bankruptcy in January 2023.

The lawsuit further stated Genesis had failed to honour redemption requests since mid-November. The lawsuit, which alleges both fraud and aiding and abetting fraud, is seeking damages, attorney's fees, and "any other relief that is deemed just and proper."

On social media, DCG responded saying the allegations were “defamatory” and called the filing a “publicity stunt.” Both Gemini and Genesis are also facing an SEC lawsuit over the Gemini Earn product.

Ethereum Staking Hits New Record With 26.1 Million ETH Locked

Ethereum (ETH) reached a new milestone on July 5th, with a record-breaking 26.1 million ETH staked. This number represents 21.7% of the total Ethereum supply.

According to data from CCBYETH, a cooperative index from CCData and Blockdaemon, the average Annualized Rate of Return (ARR) was 4.50% in July.

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