If you are a cryptocurrency enthusiast, you might want to mark your calendar for November 10th. That’s the date when the U.S. Securities and Exchange Commission (SEC) could potentially approve all 12 applications for spot Bitcoin exchange-traded funds (ETFs) at once, according to Bloomberg analysts.
Spot Bitcoin ETFs are funds that track the price of Bitcoin directly, rather than through futures contracts or other derivatives. They are seen as a more efficient and transparent way to invest in the leading cryptocurrency, as they eliminate the need for intermediaries and reduce the risk of contango or backwardation.
Bloomberg analysts James Seyffart and Eric Balchunas wrote in a note on November 2nd that the SEC has an “unusual” opportunity to approve all 12 spot Bitcoin ETFs at once, due to a quirk in the regulatory process. They explained that the SEC has 75 days to review an ETF application after it is published in the Federal Register, and that it can extend this period by another 90 days if it deems necessary.
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However, they noted that the SEC has not extended the review period for any of the 12 spot Bitcoin ETFs, which means that they will all reach their final deadlines between November 10th and November 18th. This creates a narrow window for the SEC to approve them all at once, rather than picking one or a few winners.
The analysts argued that this scenario would be beneficial for both the SEC and the crypto industry, as it would avoid creating an unfair advantage for any particular ETF provider, and it would also increase competition and liquidity in the market. They added that approving all 12 spot Bitcoin ETFs at once would also align with the SEC’s stated goal of fostering innovation and protecting investors.
The analysts acknowledged that this scenario is unlikely, given the SEC’s cautious stance on crypto regulation and its concerns about market manipulation, custody, and valuation. They estimated that there is only a 10% chance of this happening, and that it is more likely that the SEC will either reject all 12 spot Bitcoin ETFs or approve only one or a few of them.
However, they also pointed out that there are some positive signs that could indicate a more favorable outcome. For instance, they noted that the SEC has recently approved several Bitcoin futures ETFs, which could pave the way for spot Bitcoin ETFs. They also mentioned that the SEC has hired several crypto experts, such as Gensler’s senior advisor Corey Frayer and new director of trading and markets Alex Oh, who could help shape a more balanced and informed regulatory approach.
The analysts concluded that while the odds are low, the potential reward is high for crypto investors who are hoping for a spot Bitcoin ETF approval. They wrote: “We think this scenario would be a game-changer for the industry and send Bitcoin to new highs.”
SEC Chair Gary Gensler has expressed his concerns about the FTX crypto exchange, which has been accused of facilitating illegal transactions and violating securities laws. In a recent interview, Gensler said that he would not rule out the possibility of shutting down the exchange or imposing sanctions on its executives. He also suggested that the exchange could benefit from a change in leadership, as the current CEO, Sam Bankman-Fried, has been criticized for his lack of transparency and accountability.
Gensler’s remarks come amid a broader crackdown on the crypto industry by the SEC, which has been investigating several exchanges and platforms for potential fraud and manipulation. The SEC has also been working on developing a regulatory framework for crypto assets, which Gensler said would protect investors and promote innovation. He said that he welcomes legitimate crypto businesses that comply with the rules and cooperate with the regulators.
However, he singled out FTX as one of the most problematic exchanges in the market, citing its involvement in leveraged trading, derivatives, and tokenized stocks. He said that these products pose significant risks to investors and the financial system, and that FTX has not been forthcoming about its operations and compliance. He said that he has been in contact with Bankman-Fried, but that he has not been satisfied with his responses.
Gensler said that he hopes that FTX will change its practices and culture, and that he is open to working with a new leadership team that would be more responsible and responsive. He said that he believes that FTX has the potential to be a positive force in the crypto space, but that it needs to undergo a major overhaul. He said that he is prepared to take action against FTX if it does not comply with the SEC’s demands, and that he will not hesitate to shut it down if necessary.
US Treasury Official says President Biden’s admin wants new powers from Congress to crack down on crypto.
The US Treasury Department is seeking more authority from Congress to regulate the cryptocurrency industry, according to a senior official. The official, who spoke on condition of anonymity, said that the Biden administration is concerned about the potential risks posed by crypto assets to the financial system and national security.
The official said that the Treasury wants to work with lawmakers to craft legislation that would give it more oversight and enforcement powers over crypto exchanges, wallets, stablecoins, and other related entities. The official also said that the Treasury is coordinating with other federal agencies, such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), to ensure a consistent and comprehensive approach to crypto regulation.
The official added that the Treasury is supportive of innovation and competition in the financial sector, but that it also has a responsibility to protect consumers, investors, and the integrity of the US dollar. The official’s remarks come amid growing scrutiny and interest from regulators and lawmakers in the crypto space. In recent months, the SEC has sued several crypto companies for allegedly violating securities laws, the CFTC has issued fines and warnings to crypto derivatives platforms, and Congress has held several hearings on crypto-related topics.
The Treasury has also taken steps to increase its involvement in the crypto sphere, such as issuing guidance on tax reporting requirements for crypto transactions, proposing new rules on anti-money laundering and counter-terrorism financing for crypto transactions, and appointing a new director of the Office of Financial Innovation and Transformation, who will oversee the department’s digital strategy.
US SEC, Terraform Labs, Vanguard Group will not launch a Bitcoin exchange-traded fund
The Securities and Exchange Commission (SEC) has launched an investigation into jump crypto, a leading decentralized finance (DeFi) platform, following reports that the company’s president had a secret deal with terraform labs, the company behind collapsed Luna crypto and UST stablecoin.
According to anonymous sources, the president agreed to grant terraform labs exclusive access to federal lands and resources for their ambitious project of terraforming Mars, in exchange for a large stake in jump crypto and its native token, JUMP.
The SEC is reportedly looking into whether jump crypto violated any securities laws or regulations, and whether the president and his associates engaged in insider trading or market manipulation by using their privileged information to profit from jump crypto’s meteoric rise.
Jump crypto is one of the most popular and innovative DeFi platforms, offering users various services such as lending, borrowing, trading, staking, and yield farming. It claims to be fully decentralized and governed by its community of token holders, who vote on proposals and changes to the protocol.
However, some critics have pointed out that terraform labs still holds a significant amount of JUMP tokens and has a disproportionate influence over the platform’s development and direction. They also argue that jump crypto’s ambitious vision of creating a decentralized financial system for Mars is unrealistic and risky.
Jump crypto’s price has soared in the past few months, reaching an all-time high of $15.76 on November 8, 2023. However, it plunged by more than 50% after the news of the SEC probe broke out, trading at $7.32 at the time of writing.
Neither the president nor terraform labs have commented on the allegations so far. The White House press secretary said that the president is focused on addressing the urgent issues facing the nation and the world, such as the pandemic, climate change, and cybersecurity. The SEC probe is expected to last for several months and could have significant implications for the future of jump crypto, terraform labs, and the DeFi industry as a whole.
Vanguard Group will not launch Bitcoin ETF due to intrinsic value concerns.
Vanguard Group, one of the world’s largest investment management companies, has announced that it will not launch a Bitcoin exchange-traded fund (ETF) in the foreseeable future, citing concerns over the cryptocurrency’s intrinsic value.
In a blog post published on its website, Vanguard explained that it believes Bitcoin does not meet the criteria of a viable investment asset, as it lacks a clear and consistent valuation method, a reliable source of income, and a long-term track record of performance.
“Bitcoin is a highly speculative and volatile asset that is subject to extreme price fluctuations and regulatory uncertainties. It does not generate any cash flows, dividends, or interest payments, and its value is largely driven by supply and demand dynamics and market sentiment. Unlike traditional assets, such as stocks, bonds, or commodities, Bitcoin has no intrinsic value or underlying economic activity that can be used to assess its fair price,” the blog post read.
Vanguard also pointed out that Bitcoin ETFs pose significant operational and regulatory challenges, as they would require a robust and secure custody solution, a transparent and liquid trading platform, and a clear and consistent legal framework. The company stated that it does not see any compelling benefits of adding Bitcoin ETFs to its product portfolio, as they would not align with its long-term investment philosophy and objectives.
“Vanguard’s mission is to help investors achieve their financial goals by providing them with low-cost, diversified, and high-quality investment products and services. We do not believe that Bitcoin ETFs would serve this purpose, as they would expose investors to unnecessary risks and costs, without offering any clear advantages or diversification benefits. We remain focused on offering products that are based on sound investment principles and rigorous research, and that can deliver long-term value to our clients,” the blog post concluded.