Out of the approximately million (ZAR1.1 billion) that was recovered to pay back victims of the collapsed bitcoin investment platform Mirror Trading International (MTI), only .3 million remains. Court documents reportedly state that liquidators have used the recovered funds to pay an outstanding tax liability of .2 million and legal fees of .78 million. […]
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Brazilian CVM Resolution Comes Into Effect, Allowing Funds to Allocate Part of Their Portfolios Into Crypto
The Brazilian Securities and Exchange Commission (CVM) has opened the doors for investment funds to invest in cryptocurrency. Resolution 175, drafted last year and coming into effect on October 2, defines the rules these institutions must follow to invest in crypto, with analysts predicting a rise in interest in the sector.
Brazilian CVM Resolution 175 Comes Into Effect
Resolution 175, introduced by the Brazilian Securities and Exchange Commission (CVM) last year, came into effect on October 2, officially opening the possibilities for investment funds to invest directly in crypto in Brazil. Brazilian analysts declared they believe the resolution will bring institutions to pursue more opportunities in the cryptocurrency sector.
Now, investment funds can invest up to 10% of their portfolio in digital assets. However, there are some limits put forth by the CVM, as these institutions are only allowed to purchase cryptocurrencies from exchanges approved by the country’s central bank or international regulatory bodies.
According to Caio Sanas, partner at Caio Sanas Lawyers, this reduces the options for investment funds. Sanas explained that besides the U.S.-based cryptocurrency exchange Coinbase, there are not many companies capable of fulfilling the CVM requirements with the liquidity needed to supply Brazilian institutions with the crypto demanded.
However, the resolution is seen to recognize and legitimize the interest of institutions in cryptocurrency assets. Henrique Lisboa, a capital markets partner at VBSO Advogados, stressed that the CVM “recognized the interest of investors and managers in exploring the opportunities of the crypto-economy” with this regulation.
Limits to Protect the Market
The limitation on the number of exchanges available also results in a limit on the number of crypto assets available for purchase, indirectly conditioning investment funds to only invest in cryptocurrencies listed by these exchanges. Sanas further explained that the 10% investing limit was necessary to protect investors from market falls like the one experienced when FTX went bankrupt last year.
Sanas stated:
If the funds had invested the 10% allowed in FTX crypto assets, what would have happened? The resolution advanced with the necessary precautions for a financial or capital market. It is the CVM’s role to defend investors.
Furthermore, he explained that funds had only effectively allocated from 1% to 3% in digital assets, as the current market conditions have not contributed to a larger movement from these market actors into crypto.
What do you think about Brazilian investment funds allocating part of their portfolio to cryptocurrency assets? Tell us in the comments section below.
Stablecoin Issuer Tether Reveals Plan to Allocate Profits Into Bitcoin
Tether, the stablecoin enterprise, has revealed its intention to devote 15% of its profits to bitcoin. The firm’s announcement comes on the heels of Tether’s recent attestation report, which emphasized the company’s possession of bitcoin reserves worth .5 billion.
Tether’s Strategic Shift: Profits to Fuel Bitcoin Acquisition
Tether, the company behind the crypto economy’s largest stablecoin asset, has unveiled its strategic vision to acquire bitcoin (BTC) using its profits. “Starting this month, Tether will regularly allocate up to 15% of its net realized operating profits towards purchasing bitcoin (BTC),” the firm detailed in a blog post. “Tether anticipates that the current and future BTC holdings in its reserves will not exceed the Shareholder Capital Cushion and will further strengthen and diversify the reserves,” the stablecoin issuer added.
Prior to the announcement, the company’s latest attestation report showcased its possession of .5 billion in bitcoin reserves. Notably, the report also indicated that a significant portion of Tether’s reserves, amounting to .39 billion, is invested in precious metals. The company’s announcement on Wednesday said that the investment underscores its confidence in bitcoin as a robust store of value. “The decision to invest in bitcoin, the world’s first and largest cryptocurrency, is underpinned by its strength and potential as an investment asset,” Paolo Ardoino, Tether’s CTO, said.
The Tether executive added:
Bitcoin has continually proven its resilience and has emerged as a long-term store of value with substantial growth potential. Its limited supply, decentralized nature, and widespread adoption have positioned bitcoin as a favored choice among institutional and retail investors alike.
Tether’s announcement comes at a time when its stablecoin asset USDT is scaling toward USDT’s peak market capitalization. On May 8, 2022, USDT achieved an all-time high (ATH) market cap of .279 billion. Presently, it stands awfully close to that ATH, valued at .67 billion. In a bid to sustain the growth trajectory of the stablecoin issuer, the company said its integration of bitcoin stands as a pivotal maneuver.
“By incorporating Bitcoin into its investment strategy, Tether aims to capitalize on the digital asset’s potential growth, while leveraging its position as a trusted and reliable financial infrastructure provider,” Tether concluded on Wednesday.
What are your thoughts on Tether’s decision to allocate profits to Bitcoin and its potential impact on the stability of the crypto market? Share your insights and opinions in the comments section below.
New US Digital Taxonomy Bill to Allocate $25 Million Annually to Prevent Crypto Crime
n A second U.S. bill on crypto taxonomy offers to allocate million to the FTC from 2020 to 2024 to prevent crypto crimesn
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