Exchange operator Cboe has resubmitted an application with the U.S. Securities and Exchange Commission (SEC) to launch a bitcoin exchange-traded fund (ETF) in collaboration with asset manager Fidelity.
Cboe aims to address concerns raised by the SEC regarding the clarity and completeness of its initial filing. The SEC had previously raised similar concerns with Nasdaq over a spot bitcoin ETF filing by BlackRock.
One of the key issues was the failure to disclose the crypto-trading platforms that would enter into surveillance-sharing agreements to detect fraud in the bitcoin markets.
In addition to the Fidelity ETF, Cboe has also resubmitted listing applications for bitcoin ETFs by WisdomTree, VanEck, and a joint effort by Invesco and Galaxy.
Cboe intends to enter into a surveillance-sharing agreement with Coinbase for all these filings.
The SEC, Cboe, Nasdaq, Fidelity, and BlackRock declined to comment on the matter, while Coinbase was unavailable for comment.
It is worth noting that the SEC recently filed a lawsuit against Coinbase for failing to register as an exchange. According to Cboe’s Fidelity bitcoin ETF filing,
Coinbase represented roughly half of the U.S. dollar-bitcoin trading volume in May.
Coinbase has responded by filing a letter in federal court, seeking the dismissal of the SEC lawsuit, arguing that the regulator lacks authority to pursue civil claims since the crypto assets traded on its platform are not considered securities.
In addition to the Coinbase lawsuit, the SEC is also suing Binance, alleging that the world’s largest crypto-trading platform is involved in deceptive practices.
Concerns have been raised about the lack of transparency and auditability in the cryptocurrency market, with claims of rampant manipulation.
The recent filings for bitcoin ETFs by BlackRock and Fidelity have led to a surge in the price of bitcoin, reaching one-year highs and rising over 20% since June 15.
Despite the SEC’s request for more information on the ETF applications, the fact that the price of bitcoin has remained stable suggests that sentiment in the market is not turning bearish.
Analysts believe it was unrealistic to expect quick approval from the SEC, as the agency has previously rejected numerous spot bitcoin ETF applications due to concerns about fraudulent practices and investor protection.
Overall, Cboe’s renewed applications for bitcoin ETFs, along with similar filings by other firms, reflect the growing interest in providing regulated investment vehicles for cryptocurrencies.
However, the approval process still faces regulatory hurdles and the need to address concerns related to market manipulation and investor protection.
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South Korean crypto lending firm Delio is facing an investigation by the country’s Financial Services Commission (FSC) for alleged fraud, embezzlement, and breach of trust, according to a report by local news outlet Digital Asset.
The investigation stems from Delio’s unilateral decision to suspend users’ deposits and withdrawals on June 14.
Delio’s CEO, Jung Sang-ho, addressed concerned investors during an extraordinary meeting on June 17, stating that the company would resume withdrawals, albeit without a fixed schedule at that time.
Partial withdrawals for certain staking services were opened by the company on June 27. Sang-ho assured stakeholders that Delio would secure sufficient capital to compensate affected users.
As one of South Korea’s largest crypto lenders, Delio currently holds an estimated $1 billion worth of Bitcoin (BTC) and $8.1 billion in various altcoins.
The company’s CEO and management staff have been reportedly prohibited from leaving the country while the investigation is ongoing.
The suspension of withdrawals and deposits by Delio’s sister firm, Haru Invest, on June 13, citing issues with a “consignment operator,” likely triggered Delio’s decision to take similar action the following day due to counterparty exposure.
Following the announcement, Haru Invest has reportedly downsized its workforce significantly and is pursuing legal action against its service partner.
While Delio is a registered virtual asset provider (VASP) regulated by the country’s Financial Intelligence Unit, Haru Invest is allegedly not a VASP and thus falls outside the regulators’ jurisdiction.
It has been alleged that Delio management denied any exposure to Haru Invest shortly before the decision to suspend withdrawals.
The investigation by the FSC signifies a serious turn of events for Delio, a prominent player in the South Korean crypto lending industry.
The outcome of the investigation will determine the extent of the firm’s culpability and any potential consequences for its management.
The affected users and investors will be eagerly awaiting the resolution of this case to ascertain the fate of their assets and seek appropriate compensation.
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Crypto Investor Reports Huge Bitcoin (BTC) Gains With Questionable Strategy
A member of the r/CryptoCurrency community, known as r/Vaginosis-Psychosis on Reddit, recently shared their bold investment strategy, claiming to have profited $19,500 or 25% by taking out three personal loans totaling $59,000 to purchase Bitcoin over the past 18 months.
As of now, they hold 2.65 BTC, valued at $80,400, and are optimistic about BTC reaching $100,000 by early 2025.
In a post on June 30 on r/CryptoCurrency, the Redditor explained their approach to acquiring BTC through these risky loans.
The first two loans, acquired in February and June 2022, amounted to $15,000 and $20,000, respectively.
These loans carried fixed annual percentage rates (APR) of 6% and 4.9% with monthly payments of $225 and $326.
The third loan, obtained in June 2023, was worth $24,000 with a fixed APR of 8% and monthly payments of $405.
According to the Redditor, they have already paid off the $15,000 loan in May and made a $3,500 payment on the second loan.
Their plan is to focus on repaying the most recent loan due to its higher APR. Including interest paid, their average acquisition cost for BTC is around $24,000 or $22,264 without considering interest.
The Redditor justifies their investment strategy by highlighting their belief in the declining value of the US dollar.
They aim to repay the loans using the potentially inflated dollars they earn from their job.
Expressing confidence in Bitcoin’s future, they anticipate its price to reach approximately $100,000 per coin within 18 months.
With over 500 comments on the post, opinions are divided. While some express support for the idea, others caution against the risks associated with this approach.
One top comment with 457 upvotes argues that taking out loans for crypto investing is a horror story, citing survivorship bias and emphasizing the calculated nature of the Redditor’s risk.
The Redditor provides additional context, revealing that they are single with no dependents and earn an annual income of around $60,000.
They have affordable rental arrangements and are willing to invest 25–30% of their income into BTC each month.
The main risks they face include a significant crash in BTC price without recovery in the coming years and the potential loss of holdings due to hacking if they keep their assets in a hot wallet.
Sustaining employment is crucial for them to continue repaying the loans.
Despite the risks, some commenters encourage the Redditor, highlighting the potential life-changing outcome if their investment pays off.
They view the calculated risk as worth taking, even if the BTC price fails to exceed $35,000 for several years.
It is important to note that taking out loans to invest in cryptocurrency carries significant financial risks and should be approached with caution.
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According to Yat Siu, the CEO of Animoca Brands, the crypto industry is experiencing contrasting conditions in different parts of the world.
While Web3 startups are thriving in the Middle East and Asia, crypto entrepreneurs in North America are facing challenges due to tough macroeconomic and regulatory circumstances.
Siu shared his insights with Cointelegraph during the Collision conference in Toronto, emphasizing that the situation is not as dire as it may seem.
Siu acknowledged that Web3 startups can still secure funding from venture firms, but he pointed out that current conditions, such as higher interest rates and a decline in crypto asset prices, have raised the entry barrier for newcomers.
Despite these challenges, Siu remains optimistic, stating that the number of builders and smart contracts in the space continues to increase.
He also highlighted that Animoca Brands had made nearly 60 investments in the past few months, underscoring their bullish stance.
However, the overall strength of the crypto industry has diminished compared to its past performance.
According to the PitchBook Crypto Report for Q1 2023, crypto companies raised $2.6 billion across 353 investment rounds, representing a decrease of 11% and 12.2% in deal values and total deal value, respectively.
Siu’s comments follow significant developments in the crypto space, including the collapse of FTX in November 2022.
In the United States, the Securities and Exchange Commission has launched a crackdown on crypto firms, aiming to regulate the industry through enforcement actions.
In contrast, Hong Kong and the United Kingdom have implemented licensing systems and approved legislation to regulate crypto businesses and mitigate associated risks.
Siu noted that the regulatory aspect has had a significant impact on Web3 companies, generating fear and uncertainty among market participants.
He highlighted the contrasting environments between North America and regions like the Middle East and Asia, where the crypto industry remains vibrant.
Siu believes that these different approaches reflect each country’s agenda for emerging technology.
According to Siu, the diverse regulatory landscapes are not coincidental but rather deliberate decisions based on national interests.
He believes that by relinquishing control of the crypto industry to other parts of the world, the United States is enabling the flourishing of ecosystems that were previously constrained.
While Siu acknowledges the importance of the U.S. in the crypto space, he believes that political reasons have compelled the country to cede its role to other global players.
Overall, Siu’s observations shed light on the varying conditions faced by crypto entrepreneurs worldwide, highlighting the challenges in North America and the opportunities in the Middle East and Asia.
Despite regulatory hurdles, Siu remains optimistic about the continued growth of the crypto industry and the emergence of thriving ecosystems around the world.
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The launch of a spot Bitcoin exchange-traded fund (ETF) in the United States may face a longer delay as recent applications from investment managers have been deemed inadequate by the Securities and Exchange Commission (SEC).
The SEC has notified the Nasdaq and the Chicago Board Options Exchange (Cboe), representing asset managers, that their filings lack clarity and comprehensiveness.
The main concern raised by the SEC is the absence of a “surveillance-sharing agreement” with a spot Bitcoin exchange or insufficient details about surveillance arrangements.
However, the asset managers have the option to resubmit their applications after providing the necessary clarifications.
Following BlackRock’s inclusion among the companies aiming to launch the first spot Bitcoin ETF on Wall Street, a series of applications have been filed in recent weeks.
BlackRock’s application introduced a surveillance sharing agreement, which involves sharing information about market trading and clearing activities between entities to prevent potential market manipulation.
This move prompted ARK Invest and 21Shares to amend their own applications, including a similar surveillance agreement.
Other asset managers such as Invesco, WisdomTree, Valkyrie, and Fidelity have also resubmitted or amended their applications, with ARK Invest reportedly leading the race.
Exchange-traded funds (ETFs) are investment vehicles that track specific indices and are typically traded on exchanges.
In the cryptocurrency market, a cryptocurrency ETF refers to a fund that tracks the price of one or multiple digital tokens and comprises various cryptocurrencies.
The SEC has consistently denied spot Bitcoin ETFs since 2017. However, Canada has already made this financial product available.
Three notable funds—Purpose Bitcoin, 3iQ CoinShares, and CI Galaxy Bitcoin—have directly invested in spot Bitcoin in Canada.
In summary, the launch of a spot Bitcoin ETF in the United States is likely to experience a delay as the SEC has deemed recent applications inadequate due to a lack of clarity and comprehensive information.
Asset managers have the opportunity to rectify the filings and resubmit them after addressing the SEC’s concerns.
While spot Bitcoin ETFs have been denied by the SEC since 2017, Canada has already approved and offers several funds that directly invest in spot Bitcoin.
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Bitcoin (BTC) experienced a sharp decline below the $30,000 mark after the opening of Wall Street on June 30, causing concern among investors regarding the future of the first spot exchange-traded funds (ETFs) for the cryptocurrency.
The drop in BTC’s price was accompanied by reports that the U.S. Securities and Exchange Commission (SEC) had rejected applications for the first Bitcoin spot-price ETF.
These applications had initially fueled a recent price surge that propelled Bitcoin to new yearly highs.
According to sources cited by The Wall Street Journal, the applications had been returned, leading BTC/USD to hit a nine-day low before recovering to hover around $30,000.
The report highlighted that the applications were rejected due to a technicality – the failure to name the spot bitcoin exchange and provide sufficient information about surveillance-sharing agreements.
Despite the setback, some market observers viewed this as a minor issue that could be addressed by updating the language and resubmitting the applications.
In fact, financial commentator Tedtalksmacro saw the SEC’s actions as a positive sign, suggesting that it provided guidance to asset managers like BlackRock on how to get the applications approved.
Meanwhile, Bitcoin’s price continued to trade lower, losing over $1,000 from its daily highs at the time of writing.
This decline occurred just before the monthly and quarterly candle close, adding to the significance of the situation.
Adding to the confusion in the markets, the U.S. macroeconomic data released showed the Personal Consumption Expenditures (PCE) Index falling lower than expected, marking its biggest drop in a year.
Despite signs of slowing inflation, the markets began pricing in a higher possibility of interest rate hikes in July.
The increasing expectations of a rate hike were reflected in the latest data from CME Group’s FedWatch Tool, which indicated a nearly 90% chance of a 25-basis-point increase.
The Kobeissi Letter, a financial commentary resource, argued that despite the data, inflation remained too high, highlighting that the core PCE inflation rate had remained unchanged since December 2022 at 4.6%, posing a significant challenge for the Fed.
In summary, Bitcoin experienced a price drop below $30,000 due to reports of the SEC rejecting applications for Bitcoin spot-price ETFs.
However, market observers remained optimistic, considering the rejection to be a technicality that could be addressed.
Additionally, the markets faced confusion with lower-than-expected PCE data and rising expectations of interest rate hikes, despite concerns about high inflation levels.
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In a recent tweet, Shibburn explorer revealed that the Shiba Inu community had transferred a staggering 1,653,845,435 SHIB meme coins to dead-end wallets.
While this number seems substantial, daily burns have been fluctuating, often plummeting below zero and resulting in losses.
However, on June 30, there was a remarkable surge in the burn rate of Shiba Inu, witnessing a 1,800% increase as 50,258,924 SHIB were locked in unspendable wallet addresses.
Nonetheless, this week has only seen a few instances of daily SHIB burns on the rise.
During the month of June, Shytoshi Kusama, the lead developer, posted enigmatic tweets that may have inspired the SHIB community to burn more of these meme coins.
One tweet mentioned “Something physical coming,” hinting at a new partnership between SHIB and Shibcals. Shibcals specializes in transferring SHIB “into the physical world,” creating tangible SHIB-themed clothing, merchandise, and other touchable items beyond the realm of computer and smartphone screens.
Additionally, Kusama’s second tweet and a Telegram message in the “Shibarium Tech” channel mentioned that SHIB was “going somewhere.” Kusama clarified that this “somewhere” referred to a location “outside the USA.”
Speculations arose suggesting that the SHIB team might be heading to Canada soon to participate in the ETHToronto conference.
This move would pay homage to Vitalik Buterin, as Shiba Inu was initially launched on the Ethereum chain. It is also possible that the launch of the Layer-2 solution, Shibarium, will take place in Canada.
In a recent Telegram post, Kusama mentioned that the date and plan were unchangeable and already set, referring to it as a “launch strategy.”
Shibarium’s testnet was launched on March 11 and has since achieved significant utility milestones, with 17,019,690 linked wallets and a total of 25,955,919 transactions, according to Puppyscan.
In conclusion, the Shiba Inu community has witnessed substantial transfers of SHIB meme coins to dead-end wallets.
Despite daily burn rates fluctuating, a notable surge was observed on June 30. The lead developer’s cryptic tweets have fueled speculation among the community, with some anticipating a new partnership involving SHIB’s physical representation and a potential move outside the USA.
The possibility of the SHIB team’s involvement in the ETHToronto conference and the launch of Shibarium in Canada has also been discussed.
Shibarium’s testnet has already achieved significant milestones, demonstrating its growing utility.
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During a panel discussion at Collision 2023 in Toronto, Anthony Scaramucci, the founder of Skybridge Capital and former White House communications director, expressed his concerns about the impact of disgraced crypto executive Sam Bankman-Fried on the regulatory landscape in the United States.
According to Scaramucci, Bankman-Fried’s actions have had a detrimental effect on the industry.
Scaramucci stated that Bankman-Fried’s behavior had not only embarrassed politicians but also resulted in a swing towards over-regulation and excessive prosecutorial oversight in the United States.
He pointed out that Bankman-Fried had made substantial donations to politicians, including spending a significant amount of time with Gary Gensler, the chair of the Securities and Exchange Commission (SEC).
However, the subsequent controversies surrounding Bankman-Fried’s activities had caused a backlash and a shift towards stricter regulations.
When asked about the crypto regulatory environment in Canada compared to the United States, Scaramucci praised Canada for learning from the mistakes of the US and adopting a different approach.
He explained that Canada had actively engaged with industry players to develop fair regulations and protect against bad actors.
By working closely with legislators, they had established guidelines that fostered the growth of the Canadian crypto and digital asset space.
Scaramucci also commented on the future of cryptocurrency exchanges and expressed his admiration for Binance CEO Changpeng Zhao, also known as CZ, who is a Canadian national.
He commended CZ’s execution and the growth of Binance, which has become a dominant player in the market.
However, Scaramucci noted that transparency had been a concern and criticized some past actions. He emphasized that while the SEC has filed a lawsuit against Binance, no criminal charges have been brought forth yet.
In his closing statements, Scaramucci acknowledged that CZ would face criticism but maintained that he would remain the most influential person in the crypto industry.
Scaramucci highlighted CZ’s platform as the key to achieving mass adoption of cryptocurrency while maintaining legitimacy and operating in major jurisdictions worldwide.
Scaramucci’s remarks at the panel underscored his belief that Bankman-Fried’s actions had negatively impacted the crypto regulatory environment in the United States.
In contrast, he praised Canada for its collaborative approach to regulation and expressed optimism about the future of cryptocurrency exchanges under CZ’s leadership.
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FTX, the bankrupt crypto exchange, is moving closer to relaunching itself as an entirely new exchange, as stated in a recent report from The Wall Street Journal on June 28. John Ray, the restructuring chief at FTX, announced that the company has initiated the process of seeking interested parties for the reboot of the FTX.com exchange.
Sources familiar with the matter revealed that FTX has been engaged in discussions with potential investors regarding financing for the relaunch.
Among the interested parties is Figure, a blockchain lending company. However, Figure did not respond to Cointelegraph’s request for comment.
Potential bidders have been given until the end of the week to submit their Letters of Intent, which outline the terms and conditions for their participation in the process.
Notably, current FTX creditors may be offered a stake in the reorganized crypto exchange, along with other forms of compensation.
In an effort to distance itself from its troubled past, FTX is expected to rebrand with a new name rather than being called “FTX 2.0” or any variation of its original name.
The FTX team, led by John Ray, believes that a reboot is the best course of action to ensure that creditors receive the best possible outcome in terms of repayment.
FTX’s legal team had previously stated in April that they anticipated the launch of the new exchange to be completed sometime in the second quarter of 2024.
However, the recovery process for FTX is not without challenges. A June 26 report highlighted a significant deficit of nearly $2 billion in FTX’s books.
Furthermore, the efforts to recover these missing funds have been further complicated by allegations of the misuse of customer assets by key leadership at FTX.
Daniel Friedberg, a former regulatory officer at FTX, who has been mentioned as an unnamed party in many legal proceedings, was sued by FTX on June 27.
The lawsuit accuses Friedberg of orchestrating “hush money” payments to silence potential whistleblowers and approving fraudulent transfers and loans.
The report on the missing funds also shed light on alleged investments in venture capital firms, a $243 million Bahamian real estate portfolio, and numerous donations to non-profit organizations.
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The lower house of the North Carolina General Assembly has approved a bill that paves the way for the state to study the feasibility and advantages of holding Bitcoin.
The bill, which passed the North Carolina House of Representatives on June 28, would allocate $50,000 for a study to explore the potential acquisition, secure storage, insurance, and liquidation of both gold bullion and virtual currencies, including Bitcoin.
The study aims to assess the impact of incorporating gold and cryptocurrency holdings into North Carolina’s financial assets.
It will investigate whether such holdings can act as a hedge against inflation and systemic credit risks.
Additionally, the study will examine whether including gold and crypto assets in the state’s portfolio could reduce volatility and increase overall returns.
One of the bill’s proposals involves the creation of a state-administered depository to house the digital asset holdings. Under this arrangement, North Carolina would act as the custodian of its crypto assets.
The study will also consider the costs and benefits associated with using a privately managed depository or utilizing the depository of another state.
The bill received support from the majority of the 120-member House, with 73 representatives voting in favor, 40 against, and seven absentees.
However, before the bill can become law or be vetoed, it must also pass through the Senate and receive final approval.
In a related development, on May 3, the North Carolina House unanimously passed a bill prohibiting payments to the state using a central bank digital currency (CBDC).
The legislation also forbids the United States Federal Reserve from conducting any future pilot CBDC tests in North Carolina.
Prior to that, on May 2, the Buncombe County Board of Commissioners in North Carolina passed a one-year moratorium on cryptocurrency mining.
This temporary ban reflects a growing concern over the environmental impact of mining operations.
As the bill progresses through the legislative process, North Carolina is demonstrating an increased interest in exploring the potential benefits and risks associated with cryptocurrencies, digital assets, and their role within the state’s financial infrastructure.
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