Credit Unions Seeking Approval to Hold Crypto Directly to Compete with Banks

Credit Unions Seeking Approval to Hold Crypto Directly to Compete with Banks

Credit unions risk losing members to banks and seeing their industry “start to shrivel” if they can’t offer products that people want.

Credit unions are now looking for approval to hold crypto assets directly.

This comes after the federal regulator clarified that federally insured credit unions were allowed to partner with third-party crypto service providers last week.

The National Credit Union Administration (NCUA) said in a letter that credit unions can now allow their members to buy, sell, and hold digital assets, as long as certain conditions are met.

The guidance is part of a broader trend toward the traditional financial services industry increasingly embracing crypto assets.

The recent letter from the regulator gives credit unions assurance that they may need to move forward with partnerships, said Lance Noggle, senior director of advocacy for payments and cybersecurity at the Credit Union National Association.

According to Noggle, credit unions would ultimately like to offer crypto-related products and services directly, much like banks. Last year, the banking regulator Office of the Comptroller of the Currency (OCC) gave banks the green light to offer custody services for crypto. More recently, they had written permission from their supervisory office first.

Without similar guidance as OCC, credit unions risk losing members to banks and seeing their industry “start to shrivel” because they cannot offer financial products and services that their customers want, Noggle said.

“It’ll help credit unions that have been kicking the tires move ahead and have a bit of a road map of what the regulator will expect,” he added.

Ann Kossachev, vice president of regulatory affairs for the National Association of Federally-Insured Credit Unions, told Bloomberg that her trade group is also looking for explicit approval for credit unions to offer crypto custody services.

Meanwhile, Bitcoin service provider NYDIG is already working with banks and credit unions and is expecting a couple hundred to roll out Bitcoin products to their customers by next summer.

With the federal regulators have made it “abundantly clear” that such partnerships are permitted, Patrick Sells, chief innovation officer at NYDIG, is expecting these numbers to rise further.

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Author: AnTy

First US Bitcoin ETF is Reaching its Limit After Becoming the Fastest Fund to Amass $1B in Assets

This issue can potentially set the path to a Bitcoin spot ETF approval, for which Grayscale has already filed. But for now, GBTC shares are trading at a steep 19% discount.

The ProShares Bitcoin exchange-traded fund has become the fastest ETF to reach $1 billion in assets.

The first Bitcoin Futures ETF started off solid by amassing more than $1.1 billion of inflows in just the first two days and reaching over $3 billion in volume in the first week of launch.

The demand for the Bitcoin ETF outpaced the performance of GLD, the dominant gold-tracking ETF, which took three days to reach the milestone in 2004.

Mike McGlone, a commodities analyst at Bloomberg, calls the approval of futures-based ETF “a baby-step” toward getting the real deal, which is a spot Bitcoin ETF. US Securities and Exchange Commission (SEC) chair Gary Gensler approved the CME Bitcoin futures-backed ETF because they offer more investor protection.

“By saying they are focused on protecting investors, the SEC may have been doing the opposite,” said McGlone. According to him, the regulatory foot-dragging could have prospective investors miss out on sizable returns.

Bitcoin hit a new all-time high earlier this week at $67,000. Since then, BTC/USD has slipped and is now trading around $63k.

“Crypto is finding its footing as an investment vehicle, and the rollout of ETFs could be a big step in that direction,” said Lindsey Bell, the chief investment strategist at Ally Invest.

But this explosive start could be limited by regulated futures exchange CME.

The Proshares Bitcoin Strategy ETF (BITO) is on track to breach the limit on the number of contracts it is permitted to hold by the Chicago Mercantile Exchange.

After two days of trading, BITO owns almost 1,900 contracts for this month, ready to surpass the 2,000 limit as per CME rules that cap the number of front-month contracts one entity can own.

To avoid hitting this limit, the ETF has already gained 1,400 November contracts, but at the rate it is going, the limit might still be hit sooner rather than later.

One solution to this is CME raising the limit. Additionally, the launch of competing products such as Valkyrie Bitcoin Strategy ETF, which is to start trading today, and VanEck ETF next Monday, may help here by diluting the demand for BITO.

Another solution is Gensler approving using Canadian Bitcoin ETFs in Future exchange-traded funds. The issue with BITO could also set the patch for getting the Bitcoin spot ETF.

Interestingly, in anticipation of this, the leading digital asset manager Grayscale filed to convert its Grayscale Bitcoin Trust (GBTC) into an ETF this week.

This week, Grayscale’s parent company Digital Currency Group (DCG), also obtained authorization to up its purchase of GBTC shares to $1 billion, from $750 million. As of Oct. 19, the firm has bought $388 million worth of GBTC shares.

DCG “plans to use cash on hand to fund the purchases and will make the purchases on the open market, at management’s discretion,” said the company in a statement.

This is the company’s attempt to narrow the discount between GBTC shares, currently at a steep 19%, and their net asset value (NAV).

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Author: AnTy

VanEck Bitcoin ETF Postponed for the Last Time to Nov 14th As Futures Get the Lead Role

VanEck is one of the dozen companies awaiting an answer from the SEC on approval of physically-backed Bitcoin ETF and has also filed for a futures-backed Bitcoin ETF, which is raising Grayscale’s hackles.

The US Securities and Exchange Commission (SEC) has, yet again, extended the review process of VanEck’s physically-backed Bitcoin exchange-traded fund (ETF) for the final time.

On Wednesday, the US securities regulator posted an extension notice, saying it is designating a longer period, additional 60 days, to review the proposed rule change to list and trade shares of the VanEck Bitcoin Trust.

This puts the final deadline to get approval or disapproval on the application at November 14, 2021.

The application to list VanEck’s Bitcoin Trust was filed by Cboe BZX Exchange in March this year but continued to postpone making any decision. The commission can take up to 180 days from the filing date to announce its decision, with an additional 60 days permitted if it is deemed “appropriate.”

This time, the notice stated that the Commission finds it appropriate to allocate a longer period to issue its order on the application,

“so that it has sufficient time to consider the proposed rule change and the issues raised in the comment letters that have been submitted in connection therewith.”

VanEck is one of 13 companies awaiting an answer from the SEC on approval with other players, including Ark Invest, Valkyrie Investments, One River Asset Management, and SkyBridge Capital.

Coming Soon?

SEC Chair Gary Gensler recently said that the agency is more open to a futures-backed BItcoin ETF as it offers an additional level of security due to being governed by the CME. Also, futures requires investors to put down cash on margin to trade as collateral and, in the case of CME, a minimum of 35% of the amount. Gensler said earlier last month,

“I anticipate that there will be filings with regard to exchange-traded funds (ETFs) under the Investment Company Act (’40 Act). When combined with the other federal securities laws, the ’40 Act provides significant investor protections. Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded Bitcoin futures.”

Since Gensler’s comments, at least seven firms, including VanEck and Invesco, have applied to launch Bitcoin futures products.

Industry experts expect a Bitcoin futures ETF to receive SEC approval by October or November.

Grayscale Gives A Warning

This is now raising the largest digital asset manager Grayscale’s hackles. As we reported, CEO Michael Sonnenshein in an interview with CNBC this week, said,

“It would be shortsighted of the SEC to allow a futures-based product into the market before a spot product.”

Grayscale, which has a closed-ended Bitcoin Trust, is also looking to convert its product into an ETF. According to Sonnenshein,

“If a futures-based ETF comes to market without the ability for GBTC to convert to an ETF, it has the potential to harm investors who hold tens of billions of dollars’ worth of GBTC today outright, as well as the investors who have exposure to GBTC inside mutual funds, retirement accounts, and other places.”

While SEC has yet to approve a single crypto ETF in the past 8 years when the first BItcoin ETF was filed by the Winklevoss brothers, Canada has already approved a number of Bitcoin and Ether ETFs.

Canada and North America’s first ETF tracking Bitcoin, Purpose Bitcoin ETF (BTCC), which has $747 million in assets, is now trailing its competitors 3iQ CoinShares Bitcoin ETF (BTCQ) that was launched two months later and has now amassed $1.2 billion (US$946 million) in assets.

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Author: AnTy

Singapore’s DBS Bank Gets Approval from MAS to Offer Crypto Services to Asset Managers & Companies

Singapore’s DBS Bank Gets Approval from MAS to Offer Crypto Services to Asset Managers & Companies

Singapore’s DBS Bank is the latest to receive approval “in principle” from the Monetary Authority of Singapore (MAS) under the country’s Payment Services Act.

DBS Vickers, the bank’s brokerage arm, is the one that received the go-ahead from the country’s financial regulator to begin offering crypto services directly to companies and asset managers via its DBS Digital Exchange (DDex).

“We are pleased to have made steady progress on our digital asset ecosystem in the six months since we launched the DDEx last year,” said Eng-Kwok Seat Moey, group head of capital markets at DBS, who also reported of “keen interest” among corporations and asset managers for access to crypto.

Earlier this month, cryptocurrency exchange Independent Reserve received the first such approval.

In 2019, the Payment Services Act was passed requiring all digital payment token service providers to operate. Since it came into effect in January last year, hundreds of applicants have applied for the license.

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Author: AnTy

VanEck’s CEO Calls for Bitcoin ETF Approval Amid Intense Customer Demand

Following another delay in the approval of the VanEck Bitcoin exchange-traded fund (ETF), the CEO of the investment firm has called for a prompt decision.

In a recent interview with CNBC, Jan van Eck urged the Securities and Exchange Commission (SEC) to approve a Bitcoin ETF due to the high customer demand.

SEC Continues Delay In Approving VanEck’s Bitcoin ETF

Last week, the SEC postponed its decision on approving VanEck’s Bitcoin ETF for the second time.

The agency extended the review process till August 2021 while requesting public comments on the proposed rule change and if the ETF would be vulnerable to market manipulation.

During the interview on CNBC’s ETF Edge, van Eck highlighted the growing demand for a Bitcoin ETF, adding that investors are asking for a more efficient means of trading the premier digital asset.

The CEO also took a shot at the Grayscale Bitcoin Trust, the largest bitcoin-related fund on the market. He said that the only alternative to a Bitcoin ETF in the US is a closed-end fund that trades it at a 40% premium or 20% discount. VanEck added,

“Bitcoin futures … aren’t any better because of the shape of the futures curve. There’s a futures-based fund that underperformed bitcoin by 22% last year and 8% this year.”

Speaking on the frequent delays, VanEck said the April extension was only an artificial deadline. According to him, the SEC chairman was unwilling to prioritize or make a decision regarding a Bitcoin ETF.

Van Eck’s comments come amid his company’s continual attempt to have an exchange-traded product approved in the US.

The global investment firm currently has two ETF proposals with the SEC awaiting approval, a Bitcoin ETF and an Ethereum ETF.

VanEck filed the Bitcoin ETF last year intending to work alongside Chicago Board Options Exchange (Cboe) on the proposed offering.

The Ethereum ETF, which is the first Ethereum ETF proposal in the US, was filed earlier this month. VanEck’s goal for this ETF is to expose retail and institutional traders to ETH without directly investing.

Meanwhile, the SEC has also delayed in approving ETFs from firms like WisdomTree, Kryptoin, and Fidelity Investments.

VanEck Files New Prospectus For A Bitcoin Futures Mutual Fund

As VanEck waits for the SEC’s final decision on its Bitcoin ETF, the firm decided to also file another draft prospectus for a BTC Futures Mutual Fund.

Dubbed the “Bitcoin Strategy Fund,” the fund is aimed at investing in BTC futures contracts, pooled investment vehicles, and ETPs with exposure to the largest cryptocurrency.

According to the prospectus, the fund will invest in Bitcoin futures through a subsidiary in the Cayman Islands, and the portfolio will be managed by Gregory Krenzer.

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Author: Jimmy Aki

Diginex’s Crypto Custodial Arm Digivault Bags Approval From UK FCA

Digivault, the custodial arm of Singapore-based digital assets company Diginex, has been granted approval to register as a cryptocurrency custodian wallet provider from the UK Financial Conduct Authority (FCA).

Digivault Approved By The FCA

The firm announced in a statement released today that the regulatory approval is in line with the Money Laundering, Terrorist Financing, and Transfer of Funds (Information of the Payer) Regulations.

With this FCA approval, Digivault hopes to further provide compliant and secure custody services to corporate and institutional investors in crypto assets.

Speaking about what this feat means for Digivault and in turn, Diginex, the CEO of Diginex Limited, Richard Byworth, said the FCA approval is continued validation of its strategy to deliver fair, transparent, and compliant crypto products for institutions. He added that,

“Digivault’s market-leading custody solution is a foundational pillar of the Diginex ecosystem and acts as a key enabler to the EQUOS Exchange, OTC, and Lending business lines.”

According to the firm, its custody solutions include having digital assets in cold storage third-party vaults owned by renowned vault services provider, Malca-Amit.

Digivault provides both cold and warm storage, incorporating a series of hardware and software firewalls so that assets are protected yet readily available.

Assets available for custodial services in the company include Bitcoin, Ethereum, and USDC, and other assets hosted on ERC-20 and ERC-1400 protocols.

Commenting on the approval Rob Cooper, CEO of Digivault, said the backing of the FCA would help assure its clients that their assets are being secured within the highest possible standard of governance, control, and oversight.

Digivault’s regulatory approval from the UK financial watchdog follows its newly signed partnership with Torstone Technology, a post-trade securities, and derivatives processing provider.

The partnership is aimed at providing Digivault’s clients with post-trade services via Torstone’s settlement platform and at the same time enable Torstone’s customers to access digital asset custody solutions.

FCA’s Stance On Crypto Assets

The FCA has never been so keen on cryptocurrencies. For years, the regulator has made its concerns regarding digital assets known.

In October, the FCA declared that companies in the UK could no longer offer crypto derivatives products, including futures and exchange-traded notes.

Just recently, the FCA chief Nikhil Rathi advised young investors to avoid the crypto craze amid the soaring popularity of the likes of Bitcoin. He said that direct investment in crypto assets is a high risk, with few regulatory protections, which is why it is not advisable.

Meanwhile, Digivault happens to be the first stand-alone digital asset custodian approved by the FCA. Its parent company Diginex which went public in October 2020, was the first digital assets group with a crypto exchange to launch on Nasdaq in the US publicly.

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Author: Jimmy Aki

Singapore’s Central Bank Gives SDAX In-Principle Approval to Launch its Digital Asset Exchange

Singapore’s Central Bank Gives SDAX In-Principle Approval to Launch its Digital Asset Exchange

  • Singapore’s Digiassets Exchange Pte. Ltd. (SDAX) received ‘in-principle” approval from the country’s financial regulator, Monetary Authority of Singapore (MAS), to operate its digital asset exchange.

Reports from a local news website, MarketsMedia, states leading financial authority, MAS has reached an agreement “in principle” with the country’s leading digital assets service provider, SDAX, approving the launch of the latter’s exchange. This agreement allows SDAX to start its preparations to launch its digital asset exchange in the near future.

The new exchange from SDAX will provide an institutional-grade platform that “simplifies and speeds up traditional exchange processes” while offering clients “new fundraising and investment opportunities.” In principle, the agreement allows the Singapore-based exchange to attract clients, accredited investors, and institutional investors –giving them a seamless and regulated platform to trade digital and synthetic assets on a blockchain. SDAX Chairman, Mr. Khoo Boon Hui said,

“SDAX [new exchange] will contribute to Singapore’s fintech sector by offering innovative solutions to raise funds and trade fractionalized and digitized assets like real estate.”

Notwithstanding, the new exchange will also offer users digitized debt, equity, and other alternative assets with “high-quality real estate as the underlying asset class,” the report states.

Global investors will be subject to KYC compliance and AML standard measures to trade on the platform. The exchange will also build liquidity pools on Ethereum and offer high yielding investment products to its clients.

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Author: Lujan Odera

Crypto Exchange Huobi Returns to US Market Following Approval from Nevada Regulators

Crypto Exchange Huobi Returns to US Market Following Approval from Nevada Regulators

Huobi Global, the holding company for major crypto exchange Huobi, has been operating outside of the United States for a little over a year now. However, it appears set to return.

Earlier today, Huobi Technology Holdings published a press release confirming that it had received a Trust Company License from the Financial Institutions Division at Nevada’s Department of Business and Industry.

No Confirmation Yet

As the press release explained, the license will allow its Nevada-based subsidiary, Huobi Trust, to operate. The exchange didn’t reveal much about re-launching its exchange platform, although little suggests otherwise.

The company also warned investors to be careful with their dealings with supposed fraudsters, reiterating that Huobi Trust has yet to commence dealing in any trust services.

Huobi Global ceased operations in the U.S in November 2020. At the time, HBUS, the operator of its U.S based exchange, announced that the move was part of a “strategic layout,” with HBUS trying to get in line with Huobi’s operational policies.

However, Huobi itself has been less succinct about why it exited America. A month before the closure, Huobi stated that it would freeze all its American users’ accounts in a blog post. The firm explained that U.S.-based users had been restricted from trading on its platform, adding that the limit was due to regulatory uncertainties in the country.

Another Market Possibly Opens Up

Now that Huobi appears poised to re-enter the U.S. market, it might not meet a different regulatory landscape. While Nevada’s regulators might have given the all-clear, the company still requires approval from other jurisdictions like New York before offering its services fully in the U.S.

Still, its pedigree should help in securing the necessary licenses to move forward. Huobi is ranked third on the list of global spot exchanges, behind only Binance and Coinbase Pro. The exchange has a pretty solid reputation for security, and its presence in the United States is sure to benefit the local industry.

The Nevada license is the latest in a string of expansion efforts from Huobi. Last month, the exchange announced the launch of Huobi Labuan, its Malaysian subsidiary. The exchange got a brokerage license from the country’s authorities in September, and it has launched a fully regulated entity there.

Huobi also strengthened its presence in Russia back in August, announcing Vladimir Demin’s promotion as its chief advisor for the region.

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Author: Jimmy Aki

ErisX Obtains CFTC License to Provide Futures & Swaps Clearing Beyond Digital Assets

The Chicago-based crypto exchange, ErisX, gains regulatory approval from the U.S Commodities and Futures Trade Commission (CFTC) to start a clearinghouse for all types of futures and swaps. The crypto-focused exchange will expand its clearing services for fully collateralized swaps from digital assets to all traditional assets following the OK by the CFTC.

Back in July 2019, the firm gained the traditional designated contract market (DCM) license from the CFTC, allowing users to trade futures on the platform. The latest license granted to the firm is the traditional derivatives clearing license (DCO), which allows the firm to provide a clearinghouse for all fully collateralized swaps. Previously, ErisX provided these services to digital asset futures contracts listed on its virtual currency exchange – ErisX exchange.

ErisX, backed by TD Ameritrade, offers users both spot and physically settled futures contracts on Bitcoin (BTC) – recently announcing the launch of physically-settled Ethereum futures. The launch of these ETH-settled futures in the U.S is a first of its kind under the regulation of the CFTC.

Before the launch of ETH futures contracts, ErisX Clearing LLC received its approval of the lucrative BitLicense application offered by the New York Department of Financial Services (NYDFS). The exchange joins an exclusive list of crypto firms holding the license, including Binance, Coinbase, BitPay, Bitstamp, and Robinhood.

ErisX platform aims at integrating digital asset products and technology into a reliable, compliant, and robust capital markets workflow.

On the subject of the latest DCO license offered to ErisX, Laurian Cristea, General Counsel at ErisX, celebrated the move allowing listing and clearing of third-party contracts on their platform.

“Our trading platform is a high throughput, deterministic, low latency matching engine hosted in a world-class data center,” Cristea further said.

“Similarly, our clearing system is a reliable, web-based clearing engine designed to meet institutional requirements, and with real-time segregation balances, no other DCO can boast.”

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Author: Lujan Odera

Brazil’s Hashdex Launches World’s First Crypto ETF in Partnership with Nasdaq

Brazilian manager Hashdex has obtained the approval to launch the world’s first cryptocurrency Exchange Traded Funds (ETF), in partnership with Nasdaq.

Named Hashdex Nasdaq Crypto Index ETF, the product will be listed on the Bermuda Stock Exchange, as per local media reports.

It is expected to be available by the end of the year, which will replicate the Crypto Nasdaq Index, a joint effort of Nasdaq and Hashdex, which aims to attract institutional investment in cryptos.

Hashdex already has three crypto funds available for investment, with the most accessible one being Discovery that has a minimum investment of $500 and a management fee of 1% per year.

While in the US, several attempts at Bitcoin ETF have been rejected by the Securities and Exchange Commission (SEC). Hashdex has chosen the island specifically because of Bermuda’s crypto-friendly regulations.

According to Marcelo Sampaio, CEO of Hashdex, Nasdaq’s formal entry into the digital assets market is yet another confirmation that investments in crypto are being viewed with greater interest and confidence. He said,

“This process should also speed up the entry of institutional investors in this segment. It is a trend that increasingly becomes concrete.”

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Author: AnTy