Značka: sec

Not giving up: VanEck refiles with SEC for spot Bitcoin ETF

VanEck, one of the first firms in the world to ever file for a Bitcoin (BTC) exchange-traded fund (ETF), is not giving up on its plans to launch a spot Bitcoin ETF in the United States.The firm has refiled an application for a physically-backed Bitcoin ETF with the U.S. Securities and Exchange Commission (SEC).Filed on June 24, VanEck’s latest Bitcoin ETF application comes months after the SEC rejected its previous spot Bitcoin ETF request on Nov. 12, 2021. The securities regulator based its decision on the ETF on its alleged inability to meet standards to protect investors and the public interest as well as to “prevent fraudulent and manipulative acts and practices.”In the latest filing, VanEck provided a wide number of reasons for the SEC to approve a Bitcoin ETF this time.The ETF company argued that the lack of a U.S.-listed spot Bitcoin exchange-traded products (ETP) does not prevent U.S. funds from gaining exposure to Bitcoin. That is because many U.S. ETPs use Canadian BTC ETPs to gain exposure to spot BTC, VanEck argued, stating:“Approving this proposal — and others like it — would provide U.S. ETFs and mutual funds with a U.S.-listed and regulated products to provide such access rather than relying on either flawed products or products listed and primarily regulated in other countries.”As previously reported by Cointelegraph, Canada was one of the first countries in the world to debut a spot Bitcoin ETF with the launch of the Purpose Bitcoin ETF in February 2021.VanEck went on to say that approving a spot Bitcoin ETF would be a logical step for the SEC after the authority decided to allow Bitcoin futures-based ETFs. As previously reported, VanEck’s BTC futures ETF started trading on the Chicago Board Options Exchange on Nov. 16, 2021.“After issuing the Bitcoin futures approvals which conclude the CME Bitcoin futures market is a regulated market […] the only consistent outcome would be approving spot Bitcoin ETPs on the basis that the Bitcoin futures market is also a regulated market of significant size as it relates to the Bitcoin spot market,” the new filing reads.Related: Grayscale’s legal challenge to SEC sparks response from the communityAccording to Bloomberg ETF analyst Henry Jim, the deadline for VanEck’s latest spot Bitcoin ETF is March 3, 2023.Van Eck tries spot #Bitcoin ETF againCboe re-files 19b-4 for the VanEck Bitcoin Trust, a spot Bitcoin ETF, after it was disapproved last NovSEC has not “noticed” this filing yet.Final deadline: Mar 3, 2023MVIS® CryptoCompare Bitcoin Benchmark Ratehttps://t.co/mTJF14okCy https://t.co/5ckwIiOJFT pic.twitter.com/7xpPkBTuic— ETF Hearsay by Henry Jim (@ETFhearsay) June 30, 2022VanEck is known as one of the first U.S. firms to ever file for a Bitcoin futures ETF. The company originally filed for a physically-backed Bitcoin ETF in June 2018 but the SEC repeatedly postponed its decision over the proposal to eventually reject it three years later.

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MicroStrategy scoops up 480 Bitcoin amid market slump

Business intelligence firm MicroStrategy has added to its Bitcoin (BTC) holdings, reaffirming CEO Michael Saylor’s bullish outlook on the digital asset despite its recent struggles. In a Form 8-K filing with the United States Securities and Exchange Commission (SEC), Microstrategy disclosed that it had acquired an additional 480 BTC at an average price of roughly $20,817. The total purchase amount was $10 million in cash. With the purchase, MicroStrategy now holds 129,699 BTC, making it the largest corporate holder of Bitcoin. The total value of its holdings is roughly $3.98 billion. MicroStrategy has purchased an additional 480 bitcoins for ~$10.0 million at an average price of ~$20,817 per #bitcoin. As of 6/28/22 @MicroStrategy holds ~129,699 bitcoins acquired for ~$3.98 billion at an average price of ~$30,664 per bitcoin. $MSTRhttps://t.co/leQYTXn817— Michael Saylor⚡️ (@saylor) June 29, 2022The business intelligence firm is scooping up Bitcoin during a period of extreme market volatility. On Wednesday, Bitcoin’s price briefly dipped below $20,000, which is more than $10,000 lower than the company’s average acquisition price. The company’s BTC stash is currently sitting at a net unrealized loss of nearly $1.4 billion, according to data provided by Bitcoin Treasuries. Related: MicroStrategy may explore ‘future yield generation opportunities’ on 95,643 BTC holdingsMichael Saylor, the firm’s CEO, remains bullish on Bitcoin’s long-term prospects. Earlier this month, he told his 2.5 million Twitter followers that the firm plans to “HODL through adversity” and has no plans to offload its holdings. The bullish reaffirmation came amid rumors that the company risked a margin call if Bitcoin’s price fell below $21,000. According to Saylor, the margin call rumor is a “nothing issue.”MicroStrategy reported first-quarter revenues of $119.3 million. Gross profit for the quarter was $93.6 million. 

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Not the best week for crypto lending: Law Decoded, June 20-27

Due to Celsius Network’s withdrawal suspension in mid-June, the very topic of crypto lending made its entryway to the acute issues list for the regulators. Last week, lawmakers and officials continued to raise the question of necessary action, with significant utterance belonging to one of the key European crypto skeptics, Christine Lagard. European Central Bank president got so impressed with the Celsius crisis that she coined the term “MiCa II,” referring to the main regulatory package for crypto in the European Union. Lagarde believes the new MiCa should include separate crypto-asset staking and lending guidelines. It’s not necessary to be a civil servant to discern the flaws of the current lending model, though. A hardcore Bitcoin (BTC) maximalist and Swan Bitcoin CEO Cory Klippsten is afraid that the liquidity crisis involving Celsius may be just the beginning of a broader collapse in the crypto lending space. “Their loan books are opaque. Their activities are opaque. You’re being way under-compensated for the risk,” he explained in an interview with Cointelegraph. 90% of Central Banks are researching the utility of CBDCsIf you pick any central bank in the world, there is a 90% probability that it has been researching or testing its own digital currency project for some time. At least, that is what the new annual economic report published by the Bank of International Settlements (BIS), says. However, the numbers are way more modest when it comes to currently functioning CBDCs — there are currently only three live retail digital currencies and 28 pilots. Continue readingDisclosures should be read, not just filedThe headline above, summed up in the words of Georgetown University law professor Christopher Brummer, could be read as a motto for last week’s hearing on digital asset regulation at the United States House of Representatives. Although it should have focused on gaps in the oversight and regulation of derivatives and underlying spot markets, the discussion ranged widely. Brummer pointed out that disclosure law assumes issuers have access to information consumers do not have, while blockchain is transparent but hard to understand. Continue reading SEC and CFTC will try to understand each otherU.S. Securities and Exchange Commission (SEC) chair Gary Gensler revealed his negotiations with his colleagues from Commodity Futures Trading Commission (CFTC). Two major regulatory bodies in the U.S. are working on a “memorandum of understanding” on the regulation of digital assets. “I’m talking about one rule book on the exchange that protects all trading regardless of the pair — [be it] a security token versus security token, security token versus commodity token, commodity token versus commodity token,” Gensler explained. Continue reading

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Community reacts after SEC’s Gensler affirms BTC’s commodity status

Securities and Exchange Commission Chairman Gary Gensler riled up Crypto Twitter on Monday after affirming that Bitcoin (BTC) is a commodity. Questions were raised about its impact on Grayscales’ proposed Bitcoin ETF and why Ethereum wasn’t mentioned.Speaking to Jim Cramer on CNBC’s Squawk Box on Monday, June 27, the SEC chair said while many crypto-financial assets have the key attribute of a security, Bitcoin is the “only one” that he was comfortable publicly labeling as a commodity. “Some, like Bitcoin — and that’s the only one I’m going to say because I’m not going to talk about any one of these tokens, but my predecessors and others have said they’re a commodity.”Grayscale Bitcoin ETFThe remarks kicked up chatter about Grayscale’s application to convert its Bitcoin Trust into a spot-based exchange-traded fund (ETF) — which is expected to see a yes-or-no decision from the SEC on July 6. James Seyffart, an ETF analyst at Bloomberg Intelligence, told his 19,300 Twitter followers that while Gensler’s remarks are positive for Bitcoin, it may not be enough to see Grayscale’s Bitcoin-spot ETF approved next week.This isn’t new from Gensler, but definitely positive IMO. Unfortunately this isn’t enough for approval of $GBTC’s conversion into a spot #Bitcoin ETF. Odds of SEC approval next week (or this week) are near zero in our opinion. https://t.co/mvRnkajGdd— James Seyffart (@JSeyff) June 27, 2022Eric Balchunas, a senior ETF analyst at Bloomberg, made similar comments, noting he saw only a 0.5% chance of Grayscale’s GBTC being allowed to convert to an ETF. No mention of ETHCrypto Twitter also picked up on the fact that Gensler refrained from mentioning whether he placed Ethereum (ETH) in the same commodities boat, despite the regulator and the Commodity Futures Trading Commission (CTFC) previously agreeing that the asset was a commodity just like Bitcoin. Any thoughts on why Gensler didn’t mention Ethereum as a commodity today? https://t.co/GjN5so63O3 #ethereum— swankyfinance.eth (@swankyfinance) June 28, 2022

Positive for BitcoinNevertheless, Gensler’s views on Bitcoin have been seen as a positive for the king of crypto. Bitcoin bull Michael Saylor shared the video to his 2.5 million Twitter followers, adding that Bitcoin is essential as a treasury reserve asset, which will allow governments and institutions to support it as a digital asset to grow the economy.#Bitcoin is a commodity, which is essential for any treasury reserve asset. This allows politicians, agencies, governments, & institutions to support bitcoin as a technology & digital asset to grow the economy and extend property rights & freedom to all. pic.twitter.com/b4WmdSRilb— Michael Saylor⚡️ (@saylor) June 27, 2022

Meanwhile, Eric Weiss, founder of Blockchain Investment Group noted on Twitter that Gensler is the second SEC chair to declare Bitcoin a commodity, making it near impossible for this classification to be altered in the future.Related: Google users think BTC is dead — 5 things to know in Bitcoin this weekInterestingly, the positive news for Bitcoin resulted in another price decline, falling from a 24-hour high of $21,478 to $20,635 at the time of writing.Ethereum has fallen from a 24-hour high of $1,234 to $1,171 at the time of writing as the bears retain their grip on the markets.

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Grayscale reports 99% of SEC comment letters support spot Bitcoin ETF

Digital asset manager Grayscale reported overwhelming support in public comments for its application to launch a spot Bitcoin exchange-traded fund.In a Monday letter to investors, Grayscale said that of the more than 11,400 letters the United States Securities and Exchange Commission, or SEC, had received in regards to its proposed Bitcoin (BTC) investment vehicle, “99.96 percent of those comment letters were supportive of Grayscale’s case” as of June 9. According to Grayscale, roughly 33% of the letters questioned the lack of a spot BTC ETF in the U.S., given the SEC had already approved investment vehicles linked to Bitcoin futures, as was the case for ProShares and Valkyrie.“The SEC’s actions over the past eight months […] have signaled an increased recognition of and comfort with the maturity of the underlying Bitcoin market,” said Grayscale CEO Michael Sonnenshein. “The approval of each and every Bitcoin-linked investment product strengthens our arguments about why the U.S. market deserves a spot Bitcoin ETF.”A message from @Sonnenshein for $GBTC investors, on everything we’ve done and everything we’re ready to do: https://t.co/j1FpuLCpKY pic.twitter.com/6vQKVT97V4— Grayscale (@Grayscale) June 27, 2022The regulatory body is currently reviewing Grayscale’s application allowing the firm to convert shares of its Bitcoin Trust (GBTC) into a physically-backed fund, which, if approved, would be the first spot BTC ETF offering in the United States. The application is nearing the end of a 240-day review process, which started in November 2021 and ends on July 6. Though Grayscale’s campaign to encourage public comments with the SEC has been ongoing since February, many industry experts have suggested the regulatory body approving such an offering was unlikely. The SEC rejected similar applications from NYDIG, and Global X as recently as March, and One River Digital in May. SEC chair Gary Gensler has often pivoted in interviews when questioned as to when the commission could approve a spot Bitcoin ETF, saying in February that he would give the matter “careful consideration.”“[In my opinion] the chances of GBTC being allowed to convert to an ETF next week are 0.5%,” said Bloomberg ETF analyst Eric Balchunas. “About the same odds the NY Jets have of winning the Super Bowl.”Related: ProShares will launch ETF aimed at shorting Bitcoin following dip under $20KIt’s unclear what moves Grayscale may make if the SEC denies its application next week. The firm said it was “unequivocally committed” to converting its BTC trust to an ETF, hiring a former U.S. Solicitor General in June to work as a senior legal strategist for its application. In May, the digital asset manager launched a crypto-linked ETF on the London Stock Exchange, Borsa Italiana and Deutsche Börse Xetra.

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Gensler appeals for ‘one rule book’ in negotiations with CFTC over crypto regulation

United States Securities and Exchange Commission (SEC) chair Gary Gensler is in talks with Commodity Futures Trading Commission (CFTC) officials on a “memorandum of understanding” on the regulation of digital assets. Together, the agencies can assure market integrity, Gensler told The Financial Times in an interview published Thursday. “I’m talking about one rule book on the exchange that protects all trading regardless of the pair — [be it] a security token versus security token, security token versus commodity token, commodity token versus commodity token,” Gensler told the newspaper. Gensler’s desire to be collaborative comes as a variety of legislative initiatives have been introduced to create a more comprehensive regulatory framework for digital assets. The Digital Commodity Exchange Act, introduced in its latest form in April, and the Responsible Financial Innovation Act, introduced in June, both gave the CFTC greater authority over the market. Debbie Stabenow, chairman of the Senate Agriculture Committee, which has oversight of the CFTC, and the committee’s ranking member John Boozman are reportedly also drafting a crypto regulation bill, which is expected to expand CFTC powers. Gensler, who headed the CFTC from 2009 to 2013, has expressed skepticism about changes in the status quo.The SEC has taken the lead in crypto regulation so far, but frequently to the dissatisfaction of the industry and lawmakers who are critical of its methods of allegedly regulating through enforcement. Crypto industry leaders have explicitly asked for clearer regulation, and SEC commissioner Hester Peirce has pressed for policy changes from within the commission.Related: Bringing crypto market ‘into the light’ doesn’t address enforcement: CFTC chairRegulation is not a question of authority alone. The Financial Times cites blockchain analytics company Elliptic as saying U.S. regulators have collected $3.35 billion through enforcement actions in the crypto industry over the years, with over 70% of that sum going to the SEC.

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XRP price rally stalls near key level that last time triggered a 65% crash

XRP’s ongoing upside retracement risks exhaustion as its price tests a resistance level with a history of triggering a 65% price crash.XRP price rebounds 30% XRP’s price gained nearly 30%, rising to $0.36 on June 24, four days after rebounding from $0.28, its lowest level since January 2021. The token’s retracement rally could extend to $0.41 next, according to its “cup-and-handle” pattern shown in the chart below.XRP/USD four-hour price chart featuring “cup and handle” pattern. Source: TradingViewInterestingly, the indicator’s profit target is the same as XRP’s 50-day exponential moving average (50-day EMA; the red wave).XRP/USD daily price chart featuring 50-day EMA upside target. Source: TradingViewMajor resistance hurdleThe cup-and-handle bullish reversal setup tends to meet its profit target at a 61% success rate, according to veteran analyst Thomas Bulkowski. But it appears XRP’s case falls in the 39% failure spectrum because of a conflicting technical signal presented by its 200-4H exponential moving average (EMA). XRP’s 200-4H EMA (the blue wave in the chart below) has previously served as a strong distribution signal. Notably, in April 2022, the token attempted to break above the said wave resistance multiple times, only to face rejections on each try; it fell 65% to $0.28 later.XRP/USD four-hour price chart featuring 200-4H EMA resistance. Source: TradingViewThe ongoing cup-and-handle breakout has stalled midway after XRP retested the 200-4H EMA as resistance on June 23. Now, the token awaits further bias confirmation while risking a price decline similar to what transpired after April.XRP’s overbought relative strength index (RSI), now above 70, also raises the possibility of an interim price correction.XRP LTF breakdown underwayThe downside scenario on XRP’s shorter-timeframe chart comes in line with giant bearish setups on its longer-timeframe chart. As Cointelegraph covered earlier, XRP has entered a breakdown stage after exiting its “descending triangle” structure in early May. As a rule of technical analysis, its triangle breakdown should have it fall by as much as the structure’s maximum height, which puts its downside target near $1.86.XRP/USD weekly price chart featuring ‘descending triangle’ setup. Source: TradingViewIn other words, another 50% price drop for XRP could happen by the end of July this year. 50,000,000 #XRP (16,249,045 USD) transferred from Ripple to unknown wallethttps://t.co/FalGAzxNxg— Whale Alert (@whale_alert) June 23, 2022Macro risks led by the Federal Reserve’s hawkish policy further strengthen XRP’s bearish bias. The XRP/USD pair has typically traded lower in tandem with riskier assets in 2022, with a correlation coefficient with the Nasdaq Composite sitting at 0.90 as of June 24.XRP/USD weekly correlation with Nasdaq. Source: TradingViewA score of 1 means that the two assets moves in perfect sync.Related: Almost $100M exits US crypto funds in anticipation of hawkish monetary policyConversely, anticipations that Ripple would win the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) for “allegedly” selling unregistered securities could negate the bearish setups. I’ve stated for over a year that many @Ripple and #XRP supporters underestimate the negative impact the SEC lawsuit has had. B/c Ripple has done well outside the U.S. and is hiring, etc., people say otherwise. But XRP must be deemed a non-security in the US to fulfill its promise https://t.co/oBmiTQOWfJ— John E Deaton (203K Followers Beware Imposters) (@JohnEDeaton1) June 22, 2022

That being said, XRP could rebound toward $0.91 by the end of this year if the ongoing retracement continues any further. Interestingly, the token has bounced after testing long-term ascending trendline support, as shown below.XRP/USD weekly price chart. Source: TradingViewThe bounce has also followed XRP’s weekly relative strength index (RSI) decline below 30 — an oversold threshold, which signals a potential buying opportunity. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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US Congressional hearing on digital asset regulation focuses on disclosure

Disclosure was an important theme at a United States House of Representatives hearing on digital asset regulation Thursday. Although chair of the House Agriculture Committee Subcommittee on Commodity Exchanges, Energy and Credit Sean Maloney specified that it would focus on gaps in the oversight and regulation of derivatives and underlying spot markets, the discussion ranged widely. The Agriculture Committee oversees the Commodity Futures Trading Commission (CFTC), which regulates financial markets along with the Securities and Exchange Commission (SEC).Chainalysis cofounder and chief strategy officer Jonathan Levin said in his testimony that cryptocurrency’s transparency provides unique insights into the markets, including their risks. The blockchain can unlock information about the entire network behind illicit activities.Georgetown University law professor Christopher Brummer pointed out that disclosure law assumes issuers have access to information consumer do not have, while blockchain is transparent but hard to understand. “Disclosures should be read, not just filed,” Brummer said several times in reference to consumer protection, adding that increasing the complexity of disclosure could create vulnerabilities for consumers.Input Output Global CEO Charles Hoskinson spoke about “mindset” and emphasized the importance of principles and the need to strive for “efficacy over strictness” in the rapidly evolving, global market. He later expressed the opinion that no regulators are doing a good job with Know Your Customer/Anti-Money Laundering safeguards at the moment, however. As the participants moved on to more specific questions, CFTC market oversight division director Vincent McGonagle said his agency has the expertise to oversee the cash market for crypto. That market is now regulated by state money transmission laws, but there are multiple proposals to grant the CFC authority over it. The state laws have a different purpose from the CFTC’s concerns, McGonagle said, and centralized clearing adds a layer of consumer protection. Related: US congress research agency weighs in on UST crash, notes gaps in regulationDigital assets are defined as commodities, McGonagle said, but the SEC can determine when they are securities. Determining the point at which securities are fully decentralized and no longer subject to SEC oversight is a “tangled web,” McGonagle continued, and there is no legal mechanism for transferring those commodities back to CFTC oversight.

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Ripple CEO criticizes SEC for 'contradictions' on crypto regulations

Brad Garlinghouse, the chief executive officer of Ripple Labs, has claimed the United States Securities and Exchange Commission, or SEC, has inconsistently imposed regulations on crypto firms in the country. Speaking to Wired editor-in-chief at the Collision conference in Toronto on Thursday, Garlinghouse pointed to Ripple’s current legal battle with the SEC, in which the federal regulator has alleged the company’s executives conducted an “unregistered, ongoing digital asset securities offering” with XRP token sales. Garlinghouse referenced the SEC’s approval of Coinbase’s public offering in April 2021 despite the fact the crypto exchange listed XRP at the time.“The SEC now seems to take the position when they sued us that ‘XRP is a security and always has been’, but they approved Coinbase going public even though Coinbase is not a registered broker-dealer,” said the Ripple CEO. “There’s some contradictions here of the SEC almost not, within its organization, knowing left hand, right hand.” Garlinghouse added:“The SEC, instead of doing the hard work to define a new set of clear rules, a new set of clear regulations […] they instead decide we’re going to do regulation through enforcement, which is not efficient and really I think has stifled innovation in the United States.”Garlinghouse, Ripple co-founder Chris Larsen, and chief technology officer David Schwartz have all leveled complaints against U.S. regulators prior to and following the SEC filing its lawsuit against the firm in December 2020. Larsen suggested in October 2020 that Ripple might consider leaving the U.S. behind given many authorities’ policy of “regulation through enforcement” — the firm is currently headquartered in San Francisco, but also has offices in Dubai and Wyoming. Related: Ripple counsel slams SEC for trying to bulldoze and bankrupt crypto“I don’t think [crypto is] the Wild West at all,” said Garlinghouse, in response to SEC chair Gary Gensler’s characterization of the space. “I think crypto certainly is a volatile asset class […] All asset classes have a certain volatility — I don’t think it’s a regulator’s job to determine how that volatility should be accessed by consumers, by businesses.” “I don’t think it’s the wild west at all.” Ripple CEO @bgarlinghouse thinks the SEC isn’t painting crypto in the right light. pic.twitter.com/iO30gVafTn— Cointelegraph (@Cointelegraph) June 23, 2022The court case between Ripple and SEC is still ongoing, with many expecting the results to set a precedent for the regulatory treatment of cryptocurrencies in the United States.

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Lummis-Gillibrand crypto bill comprehensive but still creates division

It was first reported before Christmas that Wyoming Senator Cynthia Lummis planned to introduce a comprehensive crypto regulation bill. The Republican Lummis was already known for her pro-crypto stance and announced right away that she was looking for a Democratic co-sponsor. New York Senator Kirsten Gillibrand, who had not previously been known to have a strong position on cryptocurrency, was named as the co-sponsor in March. The highly awaited Responsible Financial Innovation Act (RFIA) was introduced in the United States Senate on June 7.The RFIA is 69 pages of text thick with legal and crypto jargon. There is an element of drama lurking behind the bill’s dry language, however, as it sets out what needs to be done and who should do it in the face of the inaction, confusion and interagency competition that characterize digital asset regulation in the United States today. Lummis and Gillibrand are well suited for the task. Lummis is a member of the Senate Banking Committee, which oversees the Securities and Exchange Commission (SEC), a main player in the drama. Gillibrand is a member of the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission (CFTC) — another cast member.“I don’t think CFTC is the primary regulator” of the digital asset market, Gillibrand said on a Washington Post livestream on June 8. “They just have the obligation to regulate Bitcoin and Ether, the majority of cryptocurrencies today. But the SEC has an enormous responsibility. […] And so we aren’t minimizing the role of the SEC, but we are empowering both regulatory agencies to begin to take this market and give it safety and soundness.”Division of laborThe two senators have said repeatedly that most altcoins are securities, as SEC Chair Gary Gensler has long held, and the RFIA continues to depend on the Howey Test to define securities. That test was introduced in a Supreme Court decision in 1946 on sales of Florida orange groves. Under the Howey Test, those orange grove sales, predominantly to buyers who were not farmers and not located in Florida and who could leave the land under the management of previous owner W.J. Howey Co., were investment contracts and thus securities under the Securities Act of 1933. The innovation in the RFIA comes from an extrapolation of the Howey Test. Lilya Tessler, head of the Sidley law firm’s fintech and blockchain group, told Cointelegraph: “The Court didn’t say oranges are securities. The Court never said what law applies to the subject of an investment contract.”For the purposes of the RFIA, the subject of an investment contract is a commodity and subject to regulation by the CFTC, unless it can be shown to be a security. And, it will be called an ancillary asset — a term that is new to crypto regulation. Tokens in an initial coin offering (ICO) were used as an example in one discussion of ancillary assets. The bill’s definition of an ancillary asset also specifies that it be fungible.Recent: Scams in GameFi: How to identify toxic NFT gaming projectsThis innovation does not remove the question of decentralization. It was decentralization, Tessler reminds, that established Bitcoin (BTC) and Ether (ETH) as commodities, in accordance with the principles William Hinman outlined in his 2018 speech that has proven so controversial. Under the RFIA, ancillary assets that are not sufficiently decentralized will have to file twice-yearly disclosures to the SEC. Patrick Daugherty, partner at Foley & Lardner, praised that solution. “It’s creative,” Daugherty told Cointelegraph. “It’s not dictated by the case law, but it coincides with traditional views about the value of periodic disclosure.” The legislation gives the CFTC regulatory authority over crypto asset spot markets, that is, crypto exchanges, which are now mainly subject to state money transmission laws. The additional layer of regulation would mean that the exchanges would be subject to CFTC rules on investor protection, handling of funds and other requirements. The Digital Commodity Exchange Act, introduced in the House of Representatives this year, also called for CFTC oversight of that market. The RFIA gives the CFTC the right to collect fees for regulation to finance its additional activities.Pay your taxes — or notA provision of the bill that is certain to please crypto users is a $200 exclusion from gross income for transactions using crypto for purchases of goods and services. This exclusion allows crypto to be used as intended without creating a taxable potential capital gain. This also is not a new idea.Mining and staking profits would be taxable when they are realized under the RFIA. This provides the clarity that Joshua and Jessica Jarret are seeking in their case against the Internal Revenue Service, Raul Garcia, certified public accountant and principal at Kaufman Rossin, pointed out to Cointelegraph.The bill orders a report on retirement investing in digital assets, another topic of recent litigation, from the Comptroller General.The floor of the U.S. Senate.The short section on decentralized autonomous organizations (DAOs) is the most complex. It establishes that DAOs are taxable business entities and incentivizes their incorporation. An exception is made when the DAO is raising funds for charity. This provision opens up “an opportunity for another state to do what Delaware and South Dakota did,” Garcia said. Those states have become hubs for the registration of other forms of business entity.The bill also directs the Secretary of the Treasury, or a delegate, to adopt guidance on a list of open questions within a year of the bill’s enactment.Do your jobThe RFIA ordered the Federal Reserve to process digital asset bank applications for master accounts “on an equitable basis” and in order of receipt. Custodia digital asset bank filed suit against the Federal Reserve Board of Governors and the Federal Reserve Bank of Kansas City on the day the legislation was introduced. Custodia, formerly known as Avanti, alleged that the Fed has broken the law by holding its application for a master account for 19 months without taking action. “It literally takes an act of Congress to get them to do their job,” said Daugherty, emphasizing that the bill directs the Fed to act but does not tell it what to decide.The bill devotes an entire chapter to “Responsible Interagency Coordination,” where it calls for a variety of reports to be drawn up. Among others, it orders regular reports on energy consumption from the Federal Energy Regulatory Commission that requires the SEC and CFTC to consult with the Treasury and the National Institute of Standards and Technology on cybersecurity. It directs the CFTC and SEC to develop a proposal for a self-regulatory organization. A ten-member advisory committee is ordered to be formed. It will issue annual reports on developments in the digital asset industry.Response to the billThere was a broad consensus among observers that the bill is favorable to crypto. “It’s really bipartisan,” Daugherty said of the RFIA. “You can see the compromises.” Lummis has repeatedly expressed her belief that crypto is not partisan. She said during the June 8 livestream, which also featured CFTC Chair Rostin Behnam, that Gensler had told her he had not read the bill. Senate Banking Committee Chairman Sherrod Brown told Bloomberg at about the same time that he had not read the bill either, but he “wasn’t inclined to support it.”At The Wall Street Journal’s CFO Network Summit a week later, Gensler commented when asked about the bill: “We don’t want to undermine the protections we have in a $100 trillion capital market.”Blockchain Association executive director Kristin Smith called the bill a “milestone moment” in a statement. She continued, “We thank Senators Lummis and Gillibrand for engaging with industry on this bill, and we look forward to continuing to work with them as we refine the language and advance the bill through the process.”Recent: From games to piggy banks: Educating the Bitcoin ‘minors’ of the futureBetter Markets president and CEO Dennis M. Kelleher released a statement, saying the bill “appears to be designed to disarm the public by making them think crypto will be properly regulated while the industry and the insiders know that is simply not true.” Americans for Financial Reform senior policy analyst Mark Hays said in a statement, “Just because an industry that pumps millions into the political process claims it is innovative does not mean it deserves its own special rulebook.”Senate Agriculture Committee chair Debbie Stabenow and ranking member John Boozman are also expected to introduce legislation on crypto regulation. That bill is reported to favor the CFTC to take the lead in regulation.

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Law Decoded, June 13–20: Celsius exodus and liquidity crisis

Last week, the Celsius Network wrote its name in the alarming recent history of the crypto market failures alongside Terra. The American platform has unstaked $247 million worth of Wrapped Bitcoin (wBTC) from the Aave protocol and sent it to crypto exchange FTX while putting the withdrawal option for users on a stop. Immediately after that, United States securities regulators from five states — Alabama, Kentucky, New Jersey, Texas and Washington — opened an investigation into Celsius. This isn’t the first time the platform is facing suspicions from law enforcement. In September 2021, The Texas State Securities Board scheduled a hearing related to allegations that the network had offered and sold securities in the state that were not registered or permitted. What is worrying, though, is that Celsius might not appear as a single case of poor management but the first victim in a row amid the ongoing liquidity crisis in crypto. By the end of the week, Hong Kong-based asset manager Babel Finance announced the temporary suspension of redemptions and withdrawals from its products, citing “unusual liquidity pressures.”Gary Gensler attacks a Lummis-Gillibrand bill United States Securities and Exchange Commission (SEC) Chair Gary Gensler admitted that he’s worried, and the object of his anxiety is the recently published “Responsible Financial Innovation Act,” co-sponsored by Senators Cynthia Lummis and Kirsten Gillibrand. Speaking at The Wall Street Journal’s CFO Network Summit, Gensler implied the bill has the potential to “undermine the protections we have in a $100 trillion capital market.”Continue readingLast-minute veto in PanamaSometimes months or even years of optimistic development can just stop at one moment. It happened in Panama, as the country’s president Laurentino Cortizo has partially vetoed Bill No. 697. A “crypto bill” passed the National Assembly voting in April 2022, but Cortizo was pretty clear even at that point, threatening to veto the document unless it included additional Anti-Money Laundering (AML) rules. Should the bill finally receive the president’s signature, it would make Panama the second Central American country to regulate the spending of cryptocurrencies. Continue reading A Dogecoin lawsuit for Elon MuskBillionaire Elon Musk has been used for $258 billion on the allegations of being “engaged in a crypto pyramid scheme” involving Dogecoin (DOGE): a number that might be a bit audacious, as it exceeds Dogecoin’s all-time high market cap by three times. In the filing, one of the plaintiffs states that Musk and his corporations were “unjustly enriched” by $86 billion as a result of wire fraud, gambling enterprise, false advertising, deceptive practices and other unlawful conduct. The case could certainly color up the media space. Continue reading

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