Grayscale Investments’ Chief Legal Officer announced that the firm has submitted a revised Form 19b-4 for spot Ether exchange-traded funds. The officer, Craig Salm, stated that investors are seeking access to ethereum via a spot Ethereum ETF. Listing on the NYSE Grayscale Investments, a digital asset management firm, recently submitted an amended Form 19b-4 filing […]
Bitcoin News
Grayscale Submits Revised Application For Ethereum Spot ETF – What’s New?
Asset management firm Grayscale Investments has updated its application for an Ethereum spot ETF (exchange-traded fund) with the United States Securities and Exchange Commission (SEC).
Ethereum Spot ETF Case Just As Solid As Bitcoin’s, Grayscale Argues
According to a recent post on X by Craig Salm, Grayscale’s chief legal officer, the asset management firm has revised its 19b-4 form for an Ether spot ETF. Salm claimed that this move was “important” in an effort for Grayscale to list and trade shares of its Ether Trust on the New York Stock Exchange (NYSE) Arca.
The chief legal officer stated in his post that investors “want and deserve access” to Ethereum via a spot exchange-traded product, likening the situation to the Bitcoin ETF story. “We believe the case is just as strong as it was for spot Bitcoin ETFs,” Salm said.
The asset manager is amongst the numerous firms looking to issue the first Ethereum spot ETF in the United States, having filed an application with the SEC on October 10, 2023. However, these ETF applications have faced delays multiple times, with the most recent coming against BlackRock’s filing on March 4, 2024.
As a result, the likelihood of the SEC approving an Ethereum spot ETF has taken a nosedive in recent weeks. Once-optimistic Bloomberg ETF expert Balchunas even revealed in his latest analysis that the ETH funds now have only a 35% chance of approval.
SEC Chairman Faces Pressure Over Crypto Approval
Two US senators of the Democrat party, Sens. Laphonza Butler of California and Jack Reed of Rhode Island, have urged the SEC chairman to avoid approving crypto investment products. In a letter dated March 11, the lawmakers, who are also members of the Senate Banking Committee, asked the Commission to limit future crypto ETF applications.
The success of the BTC spot products clearly ruffling some feathers on the Hill. @SenatorJackReed and @Senlaphonza write to the @SECGov urging:-no further ETPs for other tokens-make life difficult (i.e. examinations/reviews) for brokers and advisers that recommend BTC ETPs pic.twitter.com/enxdumC02N
— Alexander Grieve (@AlexanderGrieve) March 14, 2024
Following the approval of 11 Bitcoin spot ETFs in January, the attention of the crypto public has somewhat turned to whether the SEC will do the same for the Ethereum versions. However, this latest letter from the senate seems to further hurt the chances of an ETH ETF approval.
A part of the letter read:
Retail investors would face enormous risks from ETPs referencing thinly traded cryptocurrencies or cryptocurrencies whose prices are especially susceptible to pump-and-dump or other fraudulent schemes,” they said. “The Commission is under no obligation to approve such products, and given the risk, it should not do so.
As of this writing, the price of the Ethereum token stands at ,731, reflecting a 1.2% increase in the past day.
SEC’s Revised ‘Dealer’ Definition Sparks Concerns Over Impact on Crypto Innovation
The U.S. Securities and Exchange Commission (SEC) has adopted rules to require firms that act like dealers to register with the Commission. A lawyer explained that the securities regulator took a shot at decentralized finance (Defi) with the rules, which explicitly target decentralized exchanges’ (DEX) liquidity providers (LPs) with at least million in assets. […]
Bitcoin News
Revised Forecast: Bloomberg Analyst Cuts Probability Of Bitcoin Spot ETF Rejection To 5%
Popular Bloomberg ETF analyst Eric Balchunas has lowered the possibility of the US Securities and Exchange Commission (SEC) denying the launch of the Bitcoin spot ETF to 5%. This latest forecast comes as crypto enthusiasts worldwide anticipate a wide-scale approval of various Bitcoin spot ETF proposals by the SEC on Wednesday, January 10.
Why The Bitcoin Spot ETF Approval Appears Nearly Certain: Bloomberg Analysts Weigh In
In October, Eric Balchunas and fellow Bloomberg analyst James Seyffart predicted that there is a 90% chance that ARK Invest and 21 shares would receive approval for their joint Bitcoin spot ETF bid on January 10, which marked the final deadline date for the SEC’s response on their application.
However, in a recent X post on January 6, Balchunas raised the probability of this greenlight to an astounding 95% after declaring that there was only a 5% probability the SEC would reject the ARK/21 ETF bid in the coming days.
Well said although I probably go with 5% at this point. But you gotta leave a little window open for these things.
— Eric Balchunas (@EricBalchunas) January 6, 2024
This new prediction is based on the implausibility of all scenarios, which could represent a possible delay or non-approval of the ARK/ 21 shares Bitcoin spot ETF application. In an earlier X post on January 6, James Seyffart had listed these scenarios starting with ARK/21 shares spontaneously withdrawing their ETF proposal from the SEC, which he claimed to be highly unlikely.
Another scenario is that the SEC discovers new reasons to reject the launch of a crypto spot ETF, resulting in a drawn-out court battle between the US regulator and ARK/21Shares, a situation that Seyffart believes the SEC would rather avoid, especially following its recent loud legal loss against Grayscale investment.
The final event that the Bloomberg analyst believes could prevent the clearance of the ARK/21 Shares ETF bid is a direct intervention from the US Presidency, another scenario that appears remotely possible.
The D-Day Approaches
The importance of ARK/21 Shares’ joint bid to the Bitcoin spot ETF saga revolves around its final deadline date for an SEC response, which is the earliest of the bunch. Now, it is believed that the SEC will rather approve several Bitcoin spot ETF applications at once regardless of their respective final deadline date in a similar fashion as it did with Ether-futures ETFs in August.
This belief is backed by the discussions between the US regulator and various applicants in the last few weeks, leading to amendments in respective proposals, which indicates the preparation of an incoming approval.
At the time of writing, the set date of expectation remains January 10, with crypto enthusiasts highly enthusiastic about the potential bullish effects of a spot ETF on Bitcoin’s price over the year. Meanwhile, Bitcoin continues to trade at ,050, having gained by 4.50% in the last week.
Blackrock Proposes ‘Revised In-Kind Model’ for Spot Bitcoin ETF to Resolve SEC’s Concerns
Blackrock, the world’s largest asset manager, has held another meeting with the U.S. Securities and Exchange Commission (SEC) to discuss its spot bitcoin exchange-traded fund (ETF) application. The firm has proposed a “revised in-kind” model for its spot bitcoin ETF that it believes will “resolve” the SEC’s concerns. The regulator has reportedly indicated that it prefers spot bitcoin ETFs to use the cash creation method.
Revised In-Kind Model for Spot Bitcoin ETF
Blackrock, the world’s largest asset manager, held another meeting with the U.S. Securities and Exchange Commission (SEC)’s Division of Trading and Markets this week regarding its spot bitcoin exchange-traded fund (ETF) application. According to a memorandum dated Nov. 28 posted on the SEC’s website, the two parties discussed “Nasdaq Stock Market LLC’s proposed rule change to list and trade shares of the iShares Bitcoin Trust.”
The asset management firm explained: “During our 11/20 meeting with Trading & Markets staff, we understood the SEC has certain unresolved questions around the in-kind model relating to balance sheet impacts and risks to the market maker’s U.S. registered broker/dealer entity … during the redemption flow.”
Blackrock proceeded to explain its proposal of a “revised in-kind model,” also called a “prepay model,” which it believes would resolve the SEC’s concerns. “We would like to propose the following approach, that we believe would resolve these concerns,” the world’s largest asset manager wrote. “This model appears to address the staff’s concern with in-kind, addressing the critical dimension on which the in-kind model would otherwise be not preferred to the cash model.” The firm elaborated:
It preserves the many significant benefits to investors of the in-kind model over certain cash models in the context of bitcoin.
Blackrock detailed that the benefits offered by the revised in-kind approach include lower transaction costs, execution risks borne by crypto market makers instead of investors, heightened resistance to market manipulation, elimination of the necessity for issuers to fund or pre-fund sell trades, diminished operational event risks, “and simplicity and harmonization across the ecosystem given significantly lower variance on how in-kind models can be executed vs. cash models.”
Nonetheless, the SEC is said to favor the cash model. Recently, Bloomberg ETF analyst Eric Balchunas shared on X that the SEC’s Division of Trading and Markets has purportedly communicated with exchanges, advising them to opt for the cash-create approach for spot bitcoin ETFs rather than the in-kind method. Following this report, Blackrock held discussions with the SEC to address the matter, maintaining its stance on using the in-kind creation model.
SEC Chair Gary Gensler recently revealed that the regulator is considering between eight and 10 spot bitcoin ETF applications. A number of people have predicted that the securities regulator will approve multiple spot bitcoin ETFs at once early next year.
Do you think the SEC will approve Blackrock’s spot bitcoin ETF application if the asset manager insists on using the in-kind model? Let us know in the comments section below.
Crypto Companies in Japan Get Tax Relief Under Revised Rules
The tax administration of Japan has provided an exemption to companies issuing cryptocurrencies under a revision of the corporate tax rules. A local crypto media report described the move as a step toward improving the business environment for the digital asset sector in the country.
Japan Tax Authority Gives Cryptocurrency Businesses a Tax Exemption
Japan’s National Tax Agency (NTA) has issued a notice clarifying partial revisions to the country’s corporate tax regulations. Under the new rules, unrealized gains from cryptocurrencies issued by companies will no longer be taxed.
The administration explained that such coins will be excluded from the market value evaluation of a company’s assets if certain conditions are met. While a number of other issues need to be addressed, the move can improve the business environment for companies working with cryptocurrencies, Japanese crypto news outlet Coinspot noted in a report.
Under the current Japanese law, if a company holds crypto assets, they will be taxed as unrealized gains at the end of a tax period. The rule puts a burden on crypto companies and hinders blockchain innovation, causing some of these entities to relocate overseas, many have pointed out.
With the revision, the rules for taxing company-issued digital currencies have been relaxed. This comes after a long-time push in that direction, the article points out. The revision was also included in the ruling party’s tax reform plan for the fiscal year 2023.
To benefit from the new tax exemption, a company must be the issuer of the cryptocurrency in question and hold it continuously after the issuance while the crypto asset is subject to transfer restrictions, the report highlighted.
The Japanese crypto community welcomed the change as something that will keep crypto companies home. However, some of its members, like the founder of the decentralized blockchain platform Astar Network, Sota Watanabe, insisted that the tax relief should also apply to holdings of tokens issued by other companies to allow for the expansion of domestic projects.
Do you think the revised tax rules will convince more crypto companies to remain in Japan? Share your thoughts on the subject in the comments section below.
Revised Bill Suggests Prison Time for Russian Crypto Miners Evading Taxation
A draft law designed to regulate crypto mining in Russia introduces harsh penalties for miners failing to report digital assets to the state. In its latest revision, the bill also threatens to punish those who organize illegal trading of cryptocurrencies with imprisonment and hefty fines.
Forced Labor Awaits Miners and Traders Who Operate Outside Law, According to New Bill
Russian crypto miners will have to report their income and provide tax authorities with detailed information about their digital assets, including wallet addresses, to avoid being prosecuted by the state. That’s according to draft legislation that’s currently undergoing revision in Moscow.
A bill meant to regulate Russia’s growing coin minting industry was initially submitted to parliament in November. However, its adoption was later postponed for this year and lawmakers now plan to resubmit it with amendments envisaging serious consequences for miners that don’t abide by the rules.
The Russian Ministry of Finance, which is working on the changes, now wants to introduce severe punishment for those who evade declaring their crypto. This includes fines in the millions of rubles and prison time, the online news outlet Baza reported.
According to amendments to the Criminal Code prepared by the department, if miners fail to report their income twice in the course of three years and the value is over 15 million rubles (close to 0,000), they will face up to two years of imprisonment, a fine of up to 300,000 rubles, and even forced labor for up to two years.
If the amount of unreported assets exceeds 45 million rubles in fiat equivalent (almost 0,000), the punishment will be harsher — up to four years in prison, a fine that can reach 2 million rubles, and forced labor for up to four years, the report further detailed.
Updated Law Takes Even Stricter Stance on Crypto Trading
Crypto mining enterprises will have two options to sell the extracted cryptocurrency — on a foreign exchange or on a Russian trading platform established under “experimental legal regimes” which are yet to be established. This is something that the Bank of Russia has been insisting on in order to support the legalization of mining.
Exchange operators, banks or other legal entities, will be added to a special register and any coin trading activities outside the described legal framework will be viewed as violations of the law, the penalties for which are even heavier than those prescribed for miners. “Illegal organization of circulation of digital currencies” will lead to prison sentences of up to seven years, a fine of up to 1 million rubles, and forced labor for up to five years.
In the latest version of the mining bill, the authors have also added provisions concerning the prevention of money laundering. According to the texts, cryptocurrency owners “are obliged to provide the authorized body with information on their operations (deals) with digital currency at its request.”
What is your opinion about the new amendments to the Russian bill on crypto mining? Share your thoughts on the subject in the comments section below.
Revised FATF Crypto Guidelines Could Spell The End of DEXes and DeFi
Dave Jevans, the CEO of crypto analytics firm CipherTrace, warned that regulators are looking to equalize compliance rules between decentralized and centralized exchanges. The knock-on effect poses questions on the operational feasibility of the segment and the DeFi platforms and protocols.
Q: Based on the new FATF draft guidance, it sounds as if a “DEX like Uniswap would be subject to the same compliance rules as a centralized exchange like Coinbase…?”
A: “That’s correct.” –@davejevans
What effect could these requirements have on the development of DeFi? pic.twitter.com/IE96DLD50b
— Laura Shin (@laurashin) April 4, 2021
FATF Crypto Guidelines Gunning For DEXes
Last month, the Financial Action Task Force (FATF) issued revised guidelines for the crypto industry. Commenting on the amendments, the Director of Research at Coin Center, Peter Van Valkenburgh, said the changes were akin to mass warrantless surveillance.
Van Valkenburgh highlighted three areas of concern with the new guidance. They were surveillance obligations for non-custodial entities, scrutinizing peer-to-peer and privacy technologies, and customer counterparty identification.
Jevans expanded on Van Valkenburgh’s initial comments by saying FATF is looking to widen the definition of Virtual Asset Service Provider (VASP). This would obligate more entities, including non-custodial persons, to register with the local regulator to collect and report information on their activities and the activities of others.
“To me, I think point 79 comes across as the biggest one, which really is broadly the definition of a Virtual Asset Service Provider. To whom these regs would apply to…
whether it’s directly through transaction fees or indirectly through the price of a coin going up that they use to pay for fees and things of that nature would potentially fall under the umbrella of VASP, which would broadly cover pretty much almost every DeFi platform.”
In short, DEXes, whose primary selling point centers around users being able to trade without KYC compliance, would be subject to the same requirements as centralized exchanges.
It’s worth noting that FATF is accepting public comments on the guidelines until April 20th. But as Van Valkenburgh mentions, the organization is under no obligation to consider public feedback.
Should the guidelines get adopted and member countries enforce the recommendations, how would DEXes, such as Uniswap, respond? After all, the term decentralized should mean free from central control; but more relevantly, it should also mean no one can stop a DEX from operating.
Former SEC Chair Says Bitcoin Not Immune
Bitcoin has largely enjoyed a pass as far as the U.S Securities and Exchange Commission (SEC) is concerned. But in a recent interview, former SEC Chair Jay Clayton said that doesn’t make it immune to new regulations that could be on the way soon.
“Where digital assets land at the end of the day […] will be driven in part by regulation — both domestic and international — and I expect, and I’m speaking as a citizen now, that regulation will come in this area both directly and indirectly whether it’s through how these are held at banks, security accounts, taxation and the like. We will see this regulatory environment evolve.“
Rumors of a Bitcoin ban have been brewing in recent times. Billionaire Ray Dalio warned that central banks would do all they can to protect control of the money supply. He predicts if Bitcoin ever gets too big, authorities will take action.
The Bitcoin market cap has stayed consistently above tr since late March. Likewise, this month’s start saw TVL in DeFi cross bn for the first time.
Poloniex Revised Terms of Use, Shutters Services in Several Countries
n nn nn With a revision to the popular exchanges terms of use, users from a handful of jurisdictions will have their access to Poloniex shuttered.According to an October 18, 2018, update, the websites and the services offered by Poloniex as defined below are NOT addressed to persons who have their registered office or place of residence in China, Germany, Pakistan, the U.S. states of New Hampshire, New York or Washington, Vietnam or any other Restricted Territorie
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At Last? Parity Releases Revised Software Ahead of Ethereum Hard Fork
One of the main providers of software underlying the ethereum protocol has faced delays with its preparations for an upcoming fork.
CoinDesk