US SEC Delays Decisions on Grayscale Spot Bitcoin ETF
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The US
Securities and Exchange Commission (SEC
Securities and Exchange Commission (SEC)
The Securities and Exchange Commission (SEC) is one of the most widely known independent authorities in the United States. The SEC has a wide range of responsibilities, helping police markets and curbing against abuse. This includes enforcing federal securities laws, proposing securities rules, and regulating the US’ stock and options exchanges.As one of the paramount regulatory authorities in the US, the SEC is responsible for the oversight of public companies in the aforementioned segments.What Does the SEC Do?In order to achieve its obligations, the SEC enforces statutory requirements that public companies and other regulated companies submit quarterly and annual reports.Such reports are instrumental in unearthing or bringing to light any market abuse or improper action, ensuring a high degree of compliance out of market participants.These reports are also essential in maintaining the transparency of equity markets, namely private companies.Quarterly and semiannual reports from public companies are important for investors to make sound decisions when investing in the capital markets. Investment in the capital markets is not guaranteed by the federal government with such safeguards put in place to add a layer of compliance for example.The SEC is composed of five divisions: Corporate Finance, Trading and Markets, Investment Management, Enforcement, and Economic and Risk Analysis.With 11 regional offices in the US, the SEC helps police markets nationwide. In recent years the agency has also relied on additional forces for assistance as well, with the installment of the SEC Office of the Whistleblower.Founded in 2010, the SEC Whistleblower program has since awarded over $400 million to whistleblowers.
The Securities and Exchange Commission (SEC) is one of the most widely known independent authorities in the United States. The SEC has a wide range of responsibilities, helping police markets and curbing against abuse. This includes enforcing federal securities laws, proposing securities rules, and regulating the US’ stock and options exchanges.As one of the paramount regulatory authorities in the US, the SEC is responsible for the oversight of public companies in the aforementioned segments.What Does the SEC Do?In order to achieve its obligations, the SEC enforces statutory requirements that public companies and other regulated companies submit quarterly and annual reports.Such reports are instrumental in unearthing or bringing to light any market abuse or improper action, ensuring a high degree of compliance out of market participants.These reports are also essential in maintaining the transparency of equity markets, namely private companies.Quarterly and semiannual reports from public companies are important for investors to make sound decisions when investing in the capital markets. Investment in the capital markets is not guaranteed by the federal government with such safeguards put in place to add a layer of compliance for example.The SEC is composed of five divisions: Corporate Finance, Trading and Markets, Investment Management, Enforcement, and Economic and Risk Analysis.With 11 regional offices in the US, the SEC helps police markets nationwide. In recent years the agency has also relied on additional forces for assistance as well, with the installment of the SEC Office of the Whistleblower.Founded in 2010, the SEC Whistleblower program has since awarded over $400 million to whistleblowers.
Read this Term) has delayed decisions on physical (spot) Bitcoin Exchange-Traded Fund (ETF) proposals from Grayscale Investments LLC and Bitwise asset management Group. In a notice dated Wednesday, December 15, the market regulator announced that it has another 45 days to review the Bitwise Bitcoin ETP Trust and Grayscale Bitcoin Trust proposals. Now, the agency is expected to determine whether to approve or disapprove Bitwise and Grayscale applications on February 1 and February 6, respectively.
The SEC wrote in both notices: “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 received.”
On October 14, Bitwise filed for a spot
Bitcoin
Bitcoin
Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities.
Bitcoin is the world’s first digital currency that was created in 2009 by a mysterious entity named Satoshi Nakamoto. As a digital currency or cryptocurrency, Bitcoin operates without a central bank or single administrator. Instead, Bitcoin can be sent via a Peer-to-Peer (P2P) networking, devoid of intermediaries.Bitcoins are not issued or backed by any governments or banks, and Bitcoin is not considered to be legal tender, although they do have status as an acknowledged transfer of value in some jurisdictions. Rather than composing a physical currency, Bitcoins are pieces of code that can be sent and received across a kind of distributed ledger network called a blockchain. Transactions on the Bitcoin network are confirmed by a network of computers (or nodes) that solve a series of complex equations. This process is called mining. In exchange for mining, the computers receive rewards in the form of new Bitcoins. Mining grows increasingly difficult over time, and the rewards get smaller and smaller. There is a total of 21 million Bitcoins. As of May 2020, there are 18.3 million Bitcoins in circulation. This number changes approximately every 10 minutes when new blocks are mined. Presently, each new block adds 12.5 bitcoins into circulation.Since its inception, Bitcoin has remained the most popular and largest cryptocurrency in terms of market cap in the world. Bitcoin’s popularity has contributed significantly to the release of thousands of other cryptocurrencies, called “altcoins.” While the crypto market was originally hegemonic, today’s landscape features countless altcoins.Bitcoin ControversyBitcoin has been extremely controversial since its original launch. Given its mercurial nature, Bitcoin has been criticized for its use in illegal transactions and money laundering.As its impossible to trace, these attributes make Bitcoin the ideal vehicle for illicit behavior. Moreover, critics point to its high electricity consumption for mining, rampant price volatility, and thefts from exchanges. Bitcoin has been seen as a speculative bubble given its lack of oversight. The crypto has weathered multiple collapses and survived over a decade so far. Unlike its launch back in 2009, Bitcoin today is viewed far differently and is much more accepted by merchants and other entities.
Read this Term ETF to enable it to provide exposure to actual Bitcoin as opposed to derivatives like Bitcoin futures or other indirect exposure. In November, the company went ahead and dropped its own Bitcoin futures ETF proposal, despite several such products being launched in the United States.
Meanwhile, on October 19, Grayscale, the world’s largest digital currency asset management firm with $45.6 billion in assets under management, applied to convert its popular Bitcoin Trust to an ETF.
Why the SEC Favours Bitcoin Futures ETFs
The latest development by the SEC comes at a time when the regulator is continuing to maintain a hard stance on physical crypto ETFs while approving industry ETFs with indirect exposure to cryptocurrency including Bitcoin futures ETFs. In October, the regulator approved two Bitcoin futures ETFs, which marked a significant milestone for the industry. The ProShares Bitcoin Strategy ETF started trading on the NYSE Arca exchange on October 19 and accumulated over $1 billion in assets in just a matter of days. A few days later, the second Bitcoin futures ETF (the Valkyrie’s Bitcoin Strategy ETF) began trading on the Nasdaq exchange and also received a vigorous reception. As a result, their premier trading activities created lots of excitement in regards to Wall Street’s acceptance of cryptocurrency and raised hopes that the SEC might consider approving a spot Bitcoin ETF this time around.
However, on November 12, the SEC denied the approval of VanEck’s physical Bitcoin ETF to trade on Cboe Global Markets Inc, making its first ruling on the subject. In early December, the regulator rejected a spot bitcoin ETF by the asset management firm, WisdomTree after it had already delayed the decision since the previous June. Last month, the SEC reiterated its long-stated concern that spot Bitcoin ETFs violate securities rules because the market is prone to fraud, manipulation and abuse. The SEC Chairman, Gary Gensler has stated that he is comfortable with futures-based ETFs because Bitcoin futures trade on highly regulated exchanges. However, that is not the case with physical Bitcoin ETFs.
The two products are different. A physical Bitcoin ETF would be tied directly to the price of Bitcoin on spot exchanges like Coinbase where investors trade the cryptocurrency for whatever the price is currently. However, futures-based Bitcoin ETFs are tied to derivatives markets where investors use it to hedge risk and/or predict the direction of the price.
The US
Securities and Exchange Commission (SEC
Securities and Exchange Commission (SEC)
The Securities and Exchange Commission (SEC) is one of the most widely known independent authorities in the United States. The SEC has a wide range of responsibilities, helping police markets and curbing against abuse. This includes enforcing federal securities laws, proposing securities rules, and regulating the US’ stock and options exchanges.As one of the paramount regulatory authorities in the US, the SEC is responsible for the oversight of public companies in the aforementioned segments.What Does the SEC Do?In order to achieve its obligations, the SEC enforces statutory requirements that public companies and other regulated companies submit quarterly and annual reports.Such reports are instrumental in unearthing or bringing to light any market abuse or improper action, ensuring a high degree of compliance out of market participants.These reports are also essential in maintaining the transparency of equity markets, namely private companies.Quarterly and semiannual reports from public companies are important for investors to make sound decisions when investing in the capital markets. Investment in the capital markets is not guaranteed by the federal government with such safeguards put in place to add a layer of compliance for example.The SEC is composed of five divisions: Corporate Finance, Trading and Markets, Investment Management, Enforcement, and Economic and Risk Analysis.With 11 regional offices in the US, the SEC helps police markets nationwide. In recent years the agency has also relied on additional forces for assistance as well, with the installment of the SEC Office of the Whistleblower.Founded in 2010, the SEC Whistleblower program has since awarded over $400 million to whistleblowers.
The Securities and Exchange Commission (SEC) is one of the most widely known independent authorities in the United States. The SEC has a wide range of responsibilities, helping police markets and curbing against abuse. This includes enforcing federal securities laws, proposing securities rules, and regulating the US’ stock and options exchanges.As one of the paramount regulatory authorities in the US, the SEC is responsible for the oversight of public companies in the aforementioned segments.What Does the SEC Do?In order to achieve its obligations, the SEC enforces statutory requirements that public companies and other regulated companies submit quarterly and annual reports.Such reports are instrumental in unearthing or bringing to light any market abuse or improper action, ensuring a high degree of compliance out of market participants.These reports are also essential in maintaining the transparency of equity markets, namely private companies.Quarterly and semiannual reports from public companies are important for investors to make sound decisions when investing in the capital markets. Investment in the capital markets is not guaranteed by the federal government with such safeguards put in place to add a layer of compliance for example.The SEC is composed of five divisions: Corporate Finance, Trading and Markets, Investment Management, Enforcement, and Economic and Risk Analysis.With 11 regional offices in the US, the SEC helps police markets nationwide. In recent years the agency has also relied on additional forces for assistance as well, with the installment of the SEC Office of the Whistleblower.Founded in 2010, the SEC Whistleblower program has since awarded over $400 million to whistleblowers.
Read this Term) has delayed decisions on physical (spot) Bitcoin Exchange-Traded Fund (ETF) proposals from Grayscale Investments LLC and Bitwise asset management Group. In a notice dated Wednesday, December 15, the market regulator announced that it has another 45 days to review the Bitwise Bitcoin ETP Trust and Grayscale Bitcoin Trust proposals. Now, the agency is expected to determine whether to approve or disapprove Bitwise and Grayscale applications on February 1 and February 6, respectively.
The SEC wrote in both notices: “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 received.”
Meanwhile, on October 19, Grayscale, the world’s largest digital currency asset management firm with $45.6 billion in assets under management, applied to convert its popular Bitcoin Trust to an ETF.
Why the SEC Favours Bitcoin Futures ETFs
The latest development by the SEC comes at a time when the regulator is continuing to maintain a hard stance on physical crypto ETFs while approving industry ETFs with indirect exposure to cryptocurrency including Bitcoin futures ETFs. In October, the regulator approved two Bitcoin futures ETFs, which marked a significant milestone for the industry. The ProShares Bitcoin Strategy ETF started trading on the NYSE Arca exchange on October 19 and accumulated over $1 billion in assets in just a matter of days. A few days later, the second Bitcoin futures ETF (the Valkyrie’s Bitcoin Strategy ETF) began trading on the Nasdaq exchange and also received a vigorous reception. As a result, their premier trading activities created lots of excitement in regards to Wall Street’s acceptance of cryptocurrency and raised hopes that the SEC might consider approving a spot Bitcoin ETF this time around.
However, on November 12, the SEC denied the approval of VanEck’s physical Bitcoin ETF to trade on Cboe Global Markets Inc, making its first ruling on the subject. In early December, the regulator rejected a spot bitcoin ETF by the asset management firm, WisdomTree after it had already delayed the decision since the previous June. Last month, the SEC reiterated its long-stated concern that spot Bitcoin ETFs violate securities rules because the market is prone to fraud, manipulation and abuse. The SEC Chairman, Gary Gensler has stated that he is comfortable with futures-based ETFs because Bitcoin futures trade on highly regulated exchanges. However, that is not the case with physical Bitcoin ETFs.
The two products are different. A physical Bitcoin ETF would be tied directly to the price of Bitcoin on spot exchanges like Coinbase where investors trade the cryptocurrency for whatever the price is currently. However, futures-based Bitcoin ETFs are tied to derivatives markets where investors use it to hedge risk and/or predict the direction of the price.
Cryptocurrency
