The SEC Admitted Being Too Hasty When Rejecting Bitcoin ETFs

sec will review bitcon etf rejection

As we reported not so long ago, the US Securities and Exchange Commission surprised everybody by taking the decision on Bitcoin ETF proposals earlier than planned. However, the companies that filed the proposals were not so happy, since they all received an indisputable “no” from the SEC.

It seemed like the topic could be closed for good, but there is now a new twist to the story. The Commission changed its mind. According to the American lawyer Hester Peirce, it sometimes happens that the regular staff of SEC take decisions, and the senior officers then find it necessary to review and even change them.

There is currently no information on when the abovementioned review will take place.

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Japan Released New Rules In Crypto Margin Trading

Japan is a progressive country in terms of economy, as well as cryptocurrency regulation. This time Japanese financial authorities have released a new set of rules regarding crypto margin trading.

Margin trading is a strategy that allows a trader to buy more stocks than you can afford on money borrowed from a broker (similar to loan).

The Cabinet of Japan approved draft amendments to Japanese financial instruments and payment services laws on Friday. In fact, they will limit leverage in virtual currency margin trading at two to four times initial deposits. Such restrictions are a common practice in foreign exchange trading.

All crypto exchanges throughout the country are bound to get governmental registration. This type of registration will differ from that adopted in 2017, which was mostly focus on preventing money laundering. However, these rules make exchange operators be monitored in a way similar to securities traders to protect investors.

These crypto exchange operators will be classified into categories to differentiate those who involved in margin trading from those who issued ICO tokens. This will help to distinguish unsavory offerings that are similar to frauds or Ponzi schemes and protect investors from losing their money. The new rules will come into force in April 2020. All margin cryptocurrency exchange operators have to be registered within 18 months of that date.

Such a time limit is set to take down unregistered “quasi-operators” which conduct operations without governmental approval. A senior FSA official said:

“We intend to motivate operators to do what they can to become registered.”

We remind you

Japan’s Biggest Bank Is Not Going To Create Its Own Cryptocurrency: Fake News Is Not Confirmed

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Winklevoss’ Brothers Said “Crypto Doesn’t Need Rules”, What About Crypto Companies?

Winklevoss twins are one of the most influential crypto personalities in the modern world. They are multi-millionaires with their own exchange – Gemini – and own dollar-pegged Gemini coin. It is no secret that the brothers have supported crypto since the beginning of it, but now they promote crypto regulation which confronts with the idea of crypto as well as with their billboard slogans. What happened?

Crypto Needs Or Doesn’t Need Rules

The twins are known for deconstructing the stereotypes and the myths that surround crypto in the public. They want to change the image of crypto that has been plagued with scams, hacks, frauds. However, their billboard slogan “Crypto Needs Rules” was criticized by Bitcoin users as the main meaning of crypto is to transfer money or digital assets without having to trust anyone.

Source: Bitcoinist

Cameron Winklevoss said that some people wondered why Gemini believes that the crypto revolution needs rules. He responded:

“Crypto doesn’t need rules, but the companies built on top of it do.”

Cameron also cited a part of report regarding to the defunct QuadrigaCX exchange which lost millions of dollars.

In order to prevent cases like QuadrigaCX and Mt.Gox, the latter’s CEO was sentenced to 2 years and six months in prison, the companies that provide custodial services of customers assets should be regulated. Furthermore, Winklevoss pointed out that these cases as well as other incidents could have been preventable if there was a proper management of the company, in particular, “proper rules and thoughtful regulation”.

We remind you

The Gemini Dollar of Winklevoss Brothers Is Officially Approved

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It Was Offered to Ban Anonymous Cryptocurrencies in Texas

A bill was introduced in Texas which demands an identification of a person who sends or receives cryptocurrencies. However, the bill specifies that if a user has already been using a verified identity digital currency then there is no need to give any person’s verification to the government.

If approved, the bill will take effect September 1, 2019.

The community took the idea not very good.

Having mentioned the bill, Andrew Hinkes, the co-founder and general lawyer of Athena Blockchain, brought up some significant issues:

Texas is not the only example of cryptocurrencies confidentiality infringement. Recently in their report dedicated to usage of cryptocurrencies and blockchain technology the French National Assembly’s Finance Committee offered total ban on cryptocurrencies oriented on confidentiality such as Monero and Zcash.

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Bahrain Issued Regulations Regarding To Crypto Assets Becoming The First Arab Country To Do So

Arab world is the last part of the world which joined the crypto community. Its first crypto exchange was established in 2018 while other worldwide exchange began operating back in 2014. However, the Arab countries, in compare to other nations, decided to approach this issue with the utmost responsibility.

The island country in Persian Gulf – Bahrain – has completed the final version of draft which regulates cryptocurrency in the country, thereby the nation has become the first Arab country to issue such a document. According to a statement made by the Central Bank, the Kingdom is now a safe place to run business crypto assets.

The director of Banking Supervision, Khalid Hamid, says:

“The CBB’s introduction of the rules relating to crypto-assets is in line with its goal to develop a comprehensive rules for the FinTech eco-system supporting Bahrain’s position as a leading financial hub in the MENA region.”

By now, the original text of regulations is not available yet. However, it is known that to conduct crypto operations, one should ensure the education.

We also want to remind you that Bahrain’s government is also interested in blockchain technology. The Minister of Electricity and Water Affairs, Dr. Abdulhussain Mirza, has claimed several times that blockchain technology is all about safety and progress. During the SmartSec Cyber Security and Blockchain Conference 2018, the Minister said:

“Technologies such as blockchain take us a huge step forward in finding a secure way to facilitate transactions. Blockchain’s ability to protect user’s data is a true mark of progress, because it can be applied in different companies from different industries including cybersecurity.”

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What Will Be With the Cryptocurrency Market If SEC Accepts Bitcoin ETF?

The cryptocurrency community has been closely following news related to Bitcoin ETF since the summer of 2018. It was then that the first applications were filed with the United States Securities and Exchange Commission (SEC), but as we all know, none of them was accepted. In this article, we will talk about what ETF is, why its adoption is so much awaited by cryptocurrency investors, and also discuss the latest news that relates to this issue.

1. What is an ETF?

By and large, an ETF can be regarded as a type of securities that perform the function of a certificate for a specific portfolio of assets. If literally, the ETF is an Exchange Traded Fund. The rate of this certificate depends on the value of the assets that are included in it. In order to register a new fund in the USA, it is necessary to submit an application to the main regulatory body – SEC. The regulator should review the submitted application and make its verdict.

2. How does an ETF differ from an investment fund?

You can perform the same operations with ETF, as with ordinary shares on the exchange. Trading ETF stocks is possible throughout the entire trading day. Habitual investment fund units are generally less liquid than ETF stocks. The first ones are often in circulation only within the limits of the state where the investment fund is registered. ETF, on the contrary, as a rule, is not limited to geographic boundaries. ETF is also ideal for high-risk and aggressive trading, as margin trading is available here.

3. Why are crypto enthusiasts waiting for the adoption of Bitcoin ETF?

The cryptocurrency industry at this stage has a sufficient number of problems, one of which is the lack of popularity and prevalence among the masses. Many investors fear to work with a new type of asset, and ETF is a more or less common financial tool. If the ETF is launched, it will attract a large number of investors to the market who are used to working with traditional financial assets. Investing in Bitcoin ETF will be devoid of many inconveniences that market participants are now facing:

  • registration of a cryptocurrency wallet (remember password, phrase recovery, save private keys, etc.);
  • registration on one of the cryptocurrency exchanges;
  • a worry for the safety of own digital assets (hacks, fraudsters, lost private keys, etc.)

All these nuances listed above are an obstacle for a large number of potential investors to enter the market who do not want to spend their time studying technical aspects. Also, many analysts are confident that the launch of the Bitcoin ETF will attract institutional investors to the industry, who will be able to significantly increase the overall market capitalization. The arrival of “whales” will be the main catalyst for the next rapid growth of the cryptocurrency market.

4. Why are some experts opposed to Bitcoin ETF?

It is worth noting that not all representatives of the cryptocurrency community so enthusiastically perceive the launch of the ETF.

Popular analyst and experienced Wall Street trader Tone Vays believes there is no direct correlation between the launch of the ETF and the growth of the BTC rate. That is, in his opinion, the launch of Bitcoin ETF does not necessarily have to cause the long-awaited growth.

Andreas M. Antonopoulos has been strongly opposed to the launch of Bitcoin ETF. He believes that this is a “terrible idea” since such funds contradict the original principles of digital coins, namely, decentralization. After the launch of Bitcoin ETF, large investors will have pressure levers on the market and will be able to subject it to aggressive manipulation.

Creator Ethereum Vitalik Buterin also believes that the industry needs more useful applications for development, but not exchange-traded funds.

5. SEC’s intransigence

Since July 2018, the Securities Commission is literally bombarded with requests related to the launch of Bitcoin ETF. But this regulator is famous for its conservatism, therefore, so far not a single application has been approved. The main argument of SEC employees is the fact that Bitcoin is still too weak and subject to market manipulation, and the cryptocurrency industry is not yet mature enough. At the same time, officials do not operate with exact figures and make their statements as neutral as possible.

6. Breaking news

As of the end of February 2019, not a single exchange fund has been launched at BTC. At the moment, SEC is considering an application from two companies VanEck and SolidX, which is aimed at changing the rules of the Chicago Stock Options Exchange (CBOE) for the subsequent launch of the ETF. The SEC has a little more than a month to make its decision on this issue. In parallel with this, the regulator is currently considering another application from Bitwise Asset Management for listing Bitcoin ETF on the NYCE Arca. It is worth noting that the SEC has not considered several applications on this issue at once for a long time (since August 2018).

According to lead researcher Bitwise Matthew Hougan, cryptocurrency infrastructure has grown significantly over the past 12 months (regulated futures appeared, such giants as Bakkt and Fidelity Digital Assets came to the industry). All these points will undoubtedly be taken into account by the SEC staff.

7. Conclusion

Bitcoin ETF is undoubtedly one of the most discussed topics in the cryptocurrency industry over the past year. The overwhelming majority of market participants are positive about the launch of exchange-traded funds at BTC. They are confident that this will favorably affect the development of the industry. But there is also the opposite opinion voiced by some market experts. One of the strongest opponents of Bitcoin ETF is Andreas M. Antonopoulos, he believes that this event will make Bitcoin centralized and more subject to market manipulation.

In any case, at the end of March 2019, the Securities Commission must issue its verdict on two applications for listing Bitcoin ETF on the stock exchanges CBOE and NYSE Arca.

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SEC vs. Elon Musk: Is Elon Musk Slowly Losing Tesla?

Elon Musk is facing the danger of being held in contempt by the court for violating the regulation of the Securities and Exchange Commission and publicly insulting the organization

Elon Musk’s tweets have often gotten him in trouble, however, he seems to have learnt nothing from his past mistakes. Let’s put all the events in the timeline to get a clear picture of what is happening.

It seems like, everything started with the controversial tweet of Tesla’s CEO in August of 2018, which claimed that the company would go private with a price of 420 dollars per share. Of course, it was done out of the blue, with no prior consultation with the lawyers.

Back then, SEC a request regarding the tweet, since the entrepreneur was violating their regulations by posting unverified or inaccurate information about his company. Elon Musk, being himself, ignored the warning.

And now it happened all over again. On February 19, Musk posted a tweet where he said that Tesla would produce 500 thousand cars in 2019. It turned out that this info was not quite truthful as well. Later on, he fixed his mistake and put 400 thousand instead of 500 thousand, but it was too late.

The SEC definitely noticed it and decided to press charges, asking the judge to hold Musk in contempt for violating the regulation. According to the agency, he once again published inaccurate information to his audience of 24 million people, without consulting anybody else in Tesla.

Now Musk has time till March 11 to submit his statement of the reasons why he should not be held in contempt. Moreover, he is in danger of being heavily fined and suspended from the social media.

In response, Tesla’s CEO posted another risky tweet, saying that there was something “broken” in SEC and their work.

The conflict did not go unnoticed. It influenced the stock price of Tesla heavily and quite negatively, which can be seen on the chart.

Source: Yahoo Finance

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