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SEC

SEC Pushes Back Deadlines on Four Bitcoin ETF Applications to Later This Year

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The U.S. Securities and Exchange Commission (SEC) is pushing back the deadline to decide on four Bitcoin (BTC) exchange-traded fund (ETF) applications currently awaiting approval.

The regulator says it needs additional time to look into a proposed rule change that will allow the Nasdaq Stock Market to list and trade shares of the Global X, Kryptoin, Valkyrie and WisdomTree Bitcoin ETFs.

“The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and any comments.”

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The SEC’s decisions on the Valkyrie, Global X, WisdomTree and Kryptoin ETFs are now due on December 8th,  November 21st, December 11th and December 24th, respectively. The Valkryie ETF is the only one in which its performance is linked to the Bitcoin futures market rather than directly to BTC.

The delay comes after SEC chair Gary Gensler signaled potential support for a futures-based Bitcoin ETF.

“[Regarding] investment vehicles providing exposure to crypto assets, earlier this year a number of open-end mutual funds launched that invested in Chicago Mercantile Exchange (CME)-traded Bitcoin [BTC] futures.

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Subsequently, we’ve started to see filings under the Investment Company Act with regard to exchange-traded funds seeking to invest in CME-traded Bitcoin futures.

When combined with the other federal securities laws, the ’40 Act provides significant investor protections for mutual funds and ETFs. I look forward to staff’s review of such filings.”

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Crypto Regulation

SEC Commissioner Warns Celebrities Will Not Bail Out Crypto Buyers

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Celebrities will not bail out naive cryptocurrency buyers, SEC commissioner warns

U.S. Securities and Exchange Commissioner Hester Peirce told Washington-based newspaper Roll Call that cryptocurrency investors have to manage their risk tolerance when taking cryptocurrency advice from celebrities.

Peirce, who is affectionally called “Crypto Mom” because of her pro-cryptocurrency stance, warns that there will no bailouts if things go south:

It’s your money that’s on the line, so do your own research and make your own decision based on your own risk tolerance and your own circumstances. After all, if things turn out badly, the celebrity won’t be there to bail you out.

During the initial coin offering (ICO) mania, some celebs were charged by the SEC with unlawfully shilling tokens on their social media profiles. Actor Steven Seagal, who became a Russian citizen in 2016, agreed to pay a disgorgement of roughly $330,000 in 2020. After he failed to pay the whole fine, the agency moved to collect money through his U.S. representatives.

A slew of musicians, actors, athletes and prominent influencers hopped on the crypto train once again to cash in on the ongoing bull run.

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As reported by U.Today, Kim Kardashian’s ad promoting a dubious cryptocurrency called “Ethereum Max” was seen by a third of crypto owners.

In September, Charles Randell, the head of the UK’s Financial Conduct Authority (FCA), stated that those who invested their money in the token promoted by Kim K had to be prepared to lose it all.

Dogecoin, the meme cryptocurrency touted by centibillionaire Elon Musk, rapper Snoop Dogg and a bunch of other stars, is currently down 66% from its historic peak that coincided with Musk’s appearance on “Saturday Night Live” in early May.

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Law professor Lawrence Cunningham told Roll Call that celebrities, who often have little to no knowledge of crypto, are fueling crypto speculation, which can cause system risks:

At scale, that can lead to a systemic misallocation of capital with adverse system-wide effects.

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Ripple

Mike Novogratz Says XRP Price Tripled This Year Despite SEC Lawsuit

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  • Mike Novogratz says XRP price tripled since the start of the US SEC lawsuit.
  • He strongly believes that SEC couldn’t manage to suppress XRP price in any way.
  • This is a testament to a resilient community with a common interest.

Ex-hedge manager Mike Novogratz is back again with what he observed about the XRP price of late. This time, he noted that despite the waves of the never-ending Ripple-SEC lawsuit, XRP price tripled this year.

Since the start of the lawsuit, XRP has maintained its price potential to the max. In fact, doing this has prevented it from decreasing in value according to Novogratz. He also stressed how XRP tied up its performance steadily is clear evidence of a resilient community that has a shared interest.

On this note, Novogratz believes that the Securities and Exchange Commission (SEC) couldn’t bring the XRP price down as people thought. Expanding further on the matter, the XRP community couldn’t remain silent on the tweet as they reacted with much enthusiasm.

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Many applauded Novogratz for expressing what he feels, more especially about XRP. Also, the XRP Twitter netizens reminded him about his previous statement that he can’t stand XRP but he owns Ripple equity.

As of now, the crypto world still keeps guessing about what the SEC lawsuit is going to bring. Whether the SEC will win the case over XRP or vice versa, all depends on time. We will stay focused on the matter and keep you updated on the lawsuit.

 

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SEC

‘Well-Informed’ Commissioners Disagree on Crypto, But SEC’s Approach ‘Harmful’

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The US Securities and Exchange Commission (SEC) is divided along party lines on the crypto industry regulation generally and the ‘safe harbor’ proposal specifically, while a senior White House official claims that President Joe Biden’s administration is getting ready for an even tougher stance on the sector. And while two prominent Commissioners are knowledgeable on the industry, a lawyer argues that the actions of the SEC are overall harmful.

Following the latest crypto-related remarks by the SEC Commissioners Caroline Crenshaw and Hester Peirce, attorney Gabriel Shapiro noted that, regardless of where the two land on the issue, their respective takes are “extremely well informed.”

That said, while Crenshaw argues that existing laws are sufficient for dealing with the human trust and possibility of exploitation aspect of the industry, Peirce argues that new laws are needed to address autonomous technology design risks.

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And well-researched opinions can both be right from a certain perspective, wrote Shapiro. However, the SEC is taking a different and harmful approach, he stated:

Commissioner Crenshaw said in her October 12 remarks that the technology that enables crypto – which is “a small but growing portion of the economy” – as well as its potential, are positive. But, as expected, this came with a ‘but’.

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“[I]t turns out, few digital assets projects have gone through the registration process. Many operate as if they are not subject to regulatory oversight,” said the member of the Democratic Party.

Among the proposals that have been brought up and that Crenshaw argued against is the ‘safe harbor’ one, which aims to enable crypto businesses to offer tokens under initial coin offerings (ICOs) in compliance with the regulator’s rules. This proposal has been supported by Commissioner Hester Peirce, a member of the Republican Party.

“Had a safe harbor been in place during the Initial Coin Offering or initial coin offerings (ICOs) boom of 2017 and 2018, I think the results would have been even worse for investors and the markets,” Crenshaw argued.

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Her take on crypto comes at the time when the SEC Chair, Gary Gensler, continues to push for more registration within the industry. Gensler took this position in April, while Crenshaw became a Commissioner in August last year.

Crenshaw said that,

“I do not think that a safe harbor that permits unlimited capital raising with only limited disclosures, and no registration requirement, is in the best interest of investors. Nor will it be effective at preventing a re-run of the excesses and failures of the recent past. [….] Instead of a harbor, my hope is that we can build a bridge.”

In response to Crenshaw’s remarks, Peirce tweeted: “If government wants to bring law to crypto, it should behave lawfully.”

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In her own remarks, dated October 8, Peirce discussed Gensler calling the crypto industry ‘Wild West’, offering a different take on it. Like the Wild West, she said, the crypto frontier appears “pretty wild” at first glance – but, like in the former West, “there is order and discipline in all of that rough and tumble. Because crypto is built on code, the code itself serves as a governor of conduct.”

Peirce added,

“The safe harbor I proposed for token distribution events acknowledges there is uncertainty about when cryptoasset offerings implicate the securities laws, but the prevailing attitude at the SEC is that there is clarity, so why bother with a safe harbor? The idea that there is clarity as to when cryptoassets are securities must come as a surprise to the lawyers advising crypto projects that have struggled with this issue for years.”

However, Crenshaw appears to have the ruling administration’s support. Peter Harrell, senior director for international economics and competitiveness with the National Security Council, told The Wall Street Journal that: “You’re really seeing the [Joe Biden] administration at the beginning of what we expect will be an ongoing, quite aggressive effort to make sure we understand and address the whole range of risks that we see in the cryptocurrency space.”

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