South Africa’s financial services industry regulator announced on July 2 that it had approved an additional 63 crypto asset service provider license applications. The Financial Sector Conduct Authority (FSCA) has received a total of 383 applications, with only five being declined. Notably, the approvals do not mean crypto assets are recognized as a legal form […]
Bitcoin News
Ethereum ETF Dream On Hold: SEC Thumbs Down Applications (Again)
Ethereum enthusiasts were cruising down the information superhighway towards a July 4th fireworks celebration of a different kind: the launch of the first spot Ethereum ETF.
But in a move that worried investors, the US Securities and Exchange Commission threw a big wrench into the works, unexpectedly returning applicants’ proposals and delaying the much-anticipated debut.
Missed Exit: Ethereum ETF July Launch Goes Up In Smoke
The news came as a shock to many, as market watchers and analysts alike had confidently predicted a July launch, with some even suggesting a celebratory trade on Independence Day.
Bloomberg ETF analysts Eric Balchunas and James Seyffart were among those waving the checkered flag a little too early. Their prediction of a July 2nd debut went up in smoke faster than a Roman candle after the SEC decided to put the brakes on the process.
Unfort think we gonna have to push back our over/under till after holiday. Sounds like SEC took extra time to get back to ppl this wk (altho again very light tweaks) and from what I hear next wk is dead bc holiday = July 8th the process resumes and soon after that they’ll launch… https://t.co/0ZQR7yiBLt
— Eric Balchunas (@EricBalchunas) June 28, 2024
Insiders claim that the SEC has delayed the anticipated debut date by requesting changes to the S-1 paperwork that issuers have submitted. This unexpected diversion raises serious concerns about the schedule as a whole. Although there are others who anticipate clearance by July 8th, the impending US holiday probably adds another level of difficulty.
Uncharted Territory: The SEC Takes The Wheel
The lack of a definitive timeline is a major source of frustration for investors and issuers alike. Unlike the previous 19b-4 forms, which mandated a specific SEC decision timeframe, the S-1 filing process gives the regulatory body the freedom to take its sweet time. This essentially hands the steering wheel over to the SEC, allowing them to request revisions and conduct a thorough review without the pressure of a ticking clock.
While SEC Chair Gary Gensler has previously hinted at approvals “sometime this summer,” his comments haven’t offered much solace to the jittery market. The recent snafu with the S-1 forms indicates that even a summer launch might be overly optimistic. This lack of clarity is a major hurdle for issuers and creates uncertainty for investors who are eager to jump on board the Ethereum ETF bandwagon.
The Road Ahead
Even if Ethereum ETFs do eventually reach the finish line, experts predict they might not attract the same level of investment as their Bitcoin counterparts. The perceived lower volatility of Bitcoin, coupled with the already established Bitcoin ETF landscape, might make them a more attractive option for some investors.
The SEC’s recent actions have thrown the timeline into disarray, leaving investors and issuers in a state of limbo. While approval might still happen “sometime this summer,” the lack of clarity and the potential for lower inflows compared to Bitcoin ETFs paint a picture of a bumpy ride ahead for these highly anticipated investment vehicles.
Featured image from Pexels, chart from TradingView
Vaneck CEO Expects SEC to Reject Spot Ethereum ETF Applications in May
The applications for spot ethereum exchange-traded funds (ETFs) face a potential rejection in May when the U.S. Securities and Exchange Commission (SEC) reaches its deadline for decisions, according to Vaneck’s CEO. His firm is one of the applicants seeking approval for a spot ether ETF. “Right now, pins are dropping as far as Ethereum is […]
Bitcoin News
Composable Data Assists Dapp Developers in Unlocking Rich Data Applications – Swaroop Hegde
Composable data, a flexible and modular approach in the field of data analytics, benefits decentralized application (dapp) developers constrained by the limitations of current data protocols. Swaroop Hegde, co-founder of Powerloom, explains that composable data maintains a decentralized database of data points verified through a consensus mechanism. Clean Insights Versus Actionable Intelligence Hegde, a thought […]
Bitcoin News
London Stock Exchange Embraces Digital Assets by Accepting Crypto ETN Applications
In a pivotal announcement, the London Stock Exchange (LSE) has shared its plans to accept bitcoin and ethereum exchange-traded note (ETN) applications, signaling a significant shift toward incorporating digital currencies into mainstream financial markets. LSE Announces Acceptance of Crypto ETNs The launch of bitcoin (BTC) and ethereum (ETH) ETNs on the LSE platform marks a […]
Bitcoin News
QED Secures $3 Million in Funding to Propel Fully Trustless Zero-Knowledge Applications Across the Bitcoin Ecosystem
PRESS RELEASE. HONG KONG —February 26, 2024 – QED, the world’s first zk-Native blockchain protocol, announced today it has raised million in a funding round led by Arrington Capital with participation from several prominent venture capital firms and companies including Paper Ventures, Starkware Draper Dragon, Blockchain Builders Fund, Lbk Labs, Valhalla Capital, Edessa Capital […]
Bitcoin News
Vitalik Buterin Explores Crypto-AI Synergy Amidst Rising Interest in Blockchain and AI Applications
In a recent blog post, Vitalik Buterin provided a deep dive into the increasingly intertwined worlds of blockchain technology and AI. Buterin offered an insightful analysis of their potential synergies while cautioning about the complexities and risks involved in their integration.
Vitalik Buterin Analyzes the Convergence of Blockchain and AI, Cautions on Integration Risks
In a blog post, Ethereum co-founder Vitalik Buterin delved into the evolving relationship between blockchain technology and artificial intelligence (AI), offering insights and warnings to developers in this cutting-edge field.
Buterin begins his post by acknowledging the growing interest in the intersections of crypto and AI, two of the most prominent technology trends in recent years. He notes:
It’s easy to come up with synergies at a superficial vibe level: crypto decentralization can balance out AI centralization, AI is opaque and crypto brings transparency.
The post categorizes the potential overlaps between AI and blockchain into four distinct areas, each with its unique prospects and risks. The first category, where AI acts as a player in blockchain-based games and mechanisms, is deemed the most viable. Buterin cites the use of AI in prediction markets as an example, where AI’s role could involve making predictions and participating in blockchain-enforced reward or penalty systems.
The second category, where AI serves as an interface to help users navigate the crypto world, can help existing applications like the Metamask wallet’s scam detection feature. However, Buterin cautions against the risks of over-relying on AI, particularly in the context of adversarial attacks.
The third category, which Buterin advises approaching with caution, involves using AI to dictate the rules of blockchain-based systems, like in decentralized autonomous organizations (DAOs). He points out the inherent risks in this approach, especially considering the vulnerability of open-source AI models to adversarial machine learning attacks, warning, “In cryptography, open source is the only way to make something truly secure, but in AI, a model (or even its training data) being open greatly increases its vulnerability to adversarial machine learning attacks.”
The final category explores the concept of using blockchain as a platform for building and maintaining AI systems, a longer-term and more speculative intersection. Buterin suggests that this approach could offer both functional benefits and improvements in AI safety, though it comes with its own set of challenges.
Throughout his post, Buterin emphasizes the need for caution, especially when developing high-stakes applications like prediction markets or stablecoins that rely on AI. He notes the inherent trade-offs between the transparency and security offered by open-source models and the obscurity and potential biases of closed-source AI systems. He points to Worldcoin, an Openai-adjacent crypto startup, as an example of a project navigating these challenges.
While optimistic about the potential synergies of crypto and AI, Buterin stresses the importance of careful consideration and robust security measures to mitigate the risks inherent in these rapidly evolving fields.
What crypto projects that are incorporating AI are you the most excited about? Share your thoughts and opinions about this subject in the comments section below.
South African Regulator Expects to Determine Fate of 50 Crypto License Applications in ‘Coming Weeks’
The head of enforcement at South Africa’s financial industry watchdog said on Jan. 24 that he expects the organization to decide the fate of 50 crypto firms’ license applicants in the coming weeks. The watchdog stated that from the more than 100 entities that applied for a license, 20 have since withdrawn from their respective applications.
The Cost of Obtaining a License
An official with the Financial Sector Conduct Authority (FSCA), South Africa’s financial industry watchdog, announced on Jan.24 that the organization expects to determine the fate of some 50 crypto firms’ license applications in the coming weeks. Gerhard van Deventer, the head of enforcement at the FSCA, revealed that out of the 90-plus applicants, 20 have since withdrawn.
As reported by Bitcoin.com News in late 2023, the South African watchdog had received a total of 93 applicants just days before the Nov. 30 deadline. This figure, which ultimately rose to 105, consisted of both current holders of FSP licenses and fresh applicants. At the time, Diketso Mashigo, the FSCA’s compliance head, confirmed that some applicants had decided against pursuing the license. Some eventually opted to operate outside the South African market.
Deventer, who made the remarks during a podcast, said he agrees with the assertion that some of the applicants may have chosen to withdraw because they have may been spooked by the cost of obtaining the financial service provider (FSP) license.
Applicants Fail to Meet Key Requirement
The FSCA’s head of enforcement however suggested that some of the withdrawing applicants only did so after they became aware of the burden of getting the license. Deventer suggested that many of those applicants had no realistic chance of meeting one key requirement.
“Applicants got stuck on the requirement of having an appropriate key individual because such an individual will need to have a very specific and relevant experience, qualifications and skills. And there is not a lot of that around if you take into account that crypto has not been around for a long time,” the FSCA’s Head of enforcement said.
Some of the applicants who found themselves in this situation said they would only reapply when a suitable individual is found, Deventer added.
Meanwhile, when asked about the changes to regulations proposed by the FSCA, Deventer said tackling scammers who purposely choose to operate outside its regulatory ambit is what motivated it to make the amendments. According to Deventer, once the new regulations kick in it will now be impossible for such entities to avoid regulation of their activities.
Register your email here to get a weekly update on African news sent to your inbox:
What are your thoughts on this story? Let us know what you think in the comments section below.
SEC Meets With Blackrock, Fidelity, Franklin Templeton, and Grayscale to Discuss Their Spot Bitcoin ETF Applications
The U.S. Securities and Exchange Commission (SEC) has held multiple meetings with spot bitcoin exchange-traded fund (ETF) issuers regarding their applications. “The SEC is busier than Santa’s elves,” said a Bloomberg ETF analyst, noting that Blackrock, the world’s largest asset manager, recently met with the SEC three times.
More Spot Bitcoin ETF Issuers Meeting With SEC
The U.S. Securities and Exchange Commission (SEC) recently held meetings with four different issuers regarding their spot bitcoin exchange-traded fund (ETF) filings.
Bloomberg analyst James Seyffart shared on social media X Tuesday that Blackrock, the world’s largest asset manager, returned to the SEC on Monday for the third time in recent weeks to discuss its spot bitcoin ETF application. He noted that the securities watchdog also held meetings with Fidelity Investments, Franklin Templeton, and Grayscale Investments. According to meeting memorandums posted on the SEC website, Grayscale and Franklin Templeton met with the SEC on Dec. 8, Fidelity Investments on Dec. 7, and Blackrock’s latest meeting with the SEC was on Dec. 11.
Eric Balchunas, a senior Bloomberg ETF analyst, commented on X Tuesday:
The SEC is busier than Santa’s elves. Blackrock’s third meeting with them yesterday is the most notable IMO as everyone is waiting to see if they can convince SEC to allow in-kind creations in the first run of approvals.
Nothing groundbreaking to report but 4 different issuers have met with the SEC regarding their #Bitcoin ETF filings in last few days. @BlackRock met with them yesterday for the third time in as many weeks. While @Grayscale, Franklin, and @Fidelity each had meetings last week pic.twitter.com/5gwBk83m0o
— James Seyffart (@JSeyff) December 12, 2023
“As you can see from the screenshots — both the [SEC] Division of Trading & Markets and the Division of Corporate Finance were present at each of these meetings. Those are the two divisions that will ultimately decide if & when the 19b-4’s & S-1’s would be approved or denied,” Seyffart noted.
Spot bitcoin ETF issuers have filed Form 19b-4 and S-1 with the SEC. The former is used by covered self-regulatory organizations (SROs) to record a rule change with the SEC while the latter is a registration statement.
One of the issues Blackrock, and other spot bitcoin ETF issuers, discussed with the SEC concerns the use of the in-kind creation model instead of the cash creation model for their spot bitcoin ETFs. While the SEC favors the cash model, Blackrock and other issuers advocate for in-kind creation. To address the regulator’s concerns, Blackrock has proposed a revised in-kind model. In its latest spot bitcoin ETF filing update, Blackrock addressed the potential classification of bitcoin as a security by the SEC.
Bloomberg has predicted a 90% chance of the SEC approving spot bitcoin ETFs by Jan. 10. There are currently 13 applications that the securities watchdog is considering. Skybridge Capital founder Anthony Scaramucci has predicted a massive capital inflow from Wall Street into BTC following spot bitcoin ETF approvals while Galaxy Digital CEO Mike Novogratz expects the price of the cryptocurrency to be “significantly higher.”
What do you think about all these spot bitcoin ETF issuers meeting with the SEC multiple times? Do you think the regulator will soon approve spot bitcoin ETFs? Let us know in the comments section below.
SEC Considering 8-10 Spot Bitcoin ETF Applications, Says Chair Gary Gensler
The U.S. Securities and Exchange Commission (SEC) is currently considering between eight and 10 bitcoin exchange-traded fund (ETF) applications, according to SEC Chairman Gary Gensler. He insisted that “the vast majority of crypto assets likely meet the investment contract test, making them subject to the securities laws.”
SEC Chair Gary Gensler on Spot Bitcoin ETFs
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said Thursday that the regulator has eight to 10 spot bitcoin exchange-traded fund (ETF) applications under review. The SEC has not yet approved a spot bitcoin ETF, even though the agency has greenlighted several ETFs linked to bitcoin futures contracts.
Regarding bitcoin ETF decisions, the SEC chairman stated:
They’ll come potentially to the five-member commission. I’m not going to prejudge them but I don’t have anything on timing. They all have various different filing dates.
Gensler did not specify the eight to 10 spot bitcoin ETF applications the SEC is reviewing. However, based on public records, there are 12 spot bitcoin ETF applications pending review at the SEC, including Grayscale’s application to covert its bitcoin trust (GBTC) into a spot bitcoin ETF.
Other applicants include Cathie Wood’s ARK Investment Management, Blackrock, Bitwise, Wisdomtree, Fidelity, Vaneck, and Invesco. The securities regulator has delayed all decisions on spot Bitcoin ETFs. Eight applications have the latest possible review dates in the first quarter of next year, and three have the latest review dates in the second quarter.
The price of bitcoin soared earlier this week on speculation that Blackrock, the world’s largest asset manager, is close to launching its bitcoin ETF. Moreover, the U.S. Court of Appeals for the D.C. Circuit ordered the SEC earlier this week to reconsider Grayscale Investments’ spot bitcoin ETF application. Some analysts, including those at JPMorgan, are expecting the SEC to approve multiple spot bitcoin ETFs at once.
On Wednesday, Gensler talked about cryptocurrency regulation at the 2023 Securities Enforcement Forum, stating:
There is nothing about the crypto asset securities markets that suggests that investors and issuers are less deserving of the protections of our securities laws.
“As I’ve previously said, without prejudging any one asset, the vast majority of crypto assets likely meet the investment contract test, making them subject to the securities laws,” he continued. “Further, it follows that most crypto intermediaries — transacting in these crypto asset securities — are subject to the securities laws as well.”
Gensler previously stated that all crypto tokens, excluding bitcoin, are securities. His litigation-heavy approach to regulating the crypto industry has drawn much criticism. He has repeatedly claimed that crypto is a field rife with fraud, abuse, and misconduct.
What do you think about the statements by SEC Chairman Gary Gensler? Let us know in the comments section below.