Gearing Up For An IPO: BlockFi Adds Former CFTC Chairman ‘Crypto Dad’ to Board

Gearing Up For An IPO: BlockFi Adds Former CFTC Chairman ‘Crypto Dad’ to Board

Former Commodity Futures Trading Commission (CFTC) chairman J. Christopher Giancarlo has joined the board of directors of crypto neobank BlockFi.

“Just another step towards BlockFi’s mission of bringing financial products to crypto investors around the world,” tweeted Anthony Pompliano, founder and partner at Morgan Creek Digital.

Giancarlo headed CFTC in 2017 when Bitcoin futures made its debut on CME Group and Chicago Board Options Exchange (CBOE). He left office in 2019.

In early 2018, during his congressional testimony in which he advocated for a “do no harm” regulatory stance towards crypto assets, it earned him the title “Crypto Dad.”

Giancarlo is the first independent, non-equity holding director on BlockFi’s five-person board.

“As the adoption of digital assets accelerates, it is critical for the financial industry to consider how to adapt and integrate these innovations in a way that best serves investors and the broader economy,” Giancarlo said in a statement on Tuesday.

Crypto lender, BlockFi allows users to earn interest on their crypto assets and also offers Bitcoin Trust and is looking for Giancarlo’s guidance on regulatory developments and other initiatives.

The crypto unicorn managed over $15 billion in assets and reported just shy of $100 million revenue in 2020. Running toward generating $500 million in revenue this year, the company has grown its client base from 10k to 250k since 2019-end.

Founded in 2017 by Zac Prince and Flori Marquez, BlockFi is rumored to be planning for an initial public offering (IPO) in the second half of 2021, which was valued at $3 billion in its latest private funding round. Coinbase, the largest crypto exchange in the US, made its debut on Nasdaq at a valuation that briefly went to $100 billion.

“There are plenty of reasons a company like BlockFi might want a former high-ranking gov’t official like Chris Giancarlo on its board, & I’d guess one of them is preparation for an IPO. Great move,” tweeted Jake Chervinsky, General Counsel at Compound Finance.

Besides a move suggesting BlockFi gearing up for going public, this addition also underscores the ongoing demand for regulatory experiences in the crypto industry. Just yesterday, Binance.US tapped former acting OCC chief Brian Brooks as its new CEO.

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Author: AnTy

Former CFTC Chairman, Giancarlo & Billionaire Lasry Invest in Crypto Asset Manager, BlockTower

Former CFTC Chairman, Giancarlo & Billionaire Lasry Invest in Crypto Asset Manager, BlockTower

  • Milwaukee Bucks billionaire co-owner, Marc Lasry, and former CFTC Chairman, Christopher Giancarlo, invest in BlockTower, a crypto investments firm.

Bitcoin-enthusiast and billionaire, Gary Lasry and Christopher Giancarlo, the former Commodities and Futures Trading Commission (CFTC) chairman, are reportedly making an undisclosed investment in cryptocurrency and blockchain investment firm, BlockTower.

According to a report from Bloomberg, Lasry, the CEO of Avenue Capital Group, made an independent into the crypto firm, persons familiar with the matter reported. The Milwaukee Bucks co-owner declined to comment on the reports.

Known as ‘crypto dad’ across crypto circles, Giancarlo made huge progress in regulating the U.S. crypto field during his time as the chairman of the CFTC. The former CFTC boss has been vocal on developing the Bitcoin and crypto ecosystem – recently calling for the launch of a digital dollar.

Giancarlo confirmed the investment but declined to comment further or disclose the amount invested in Block Tower.

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Author: Lujan Odera

Bitcoin-Friendly Ex-CFTC Chief Gary Gensler to Advise Biden on Wall Street

Former Commodity Futures Trading Commission (CFTC) Chairman Gary Gensler will be joining Joe Biden’s presidential transition to examine financial regulators.

Gensler, a former Goldman Sachs partner, is known for implementing a new regulatory regime for swaps and has gained a reputation for standing up to Wall Street.

He is also known for his bitcoin-friendly views, which he called a “catalyst for change.” Gensler actually taught a course at MIT called “Blockchain and Money” on how Bitcoin and the technology underpinning it could be used in finance.

It has been under Donald Trump’s presidential term that the IRS added the infamousdo you own crypto” question, and the President told the Treasury to “go after Bitcoin.” Not to mention he himself isn’t a fan of Bitcoin and cryptocurrencies either.

Meanwhile, Gensler has said although many currencies face regulatory scrutiny, Bitcoin “should remain exempt” from that.

Crypto market participants feel positive about Joe Biden and that he could be good for the industry. Even cryptocurrency derivatives exchange FTX CEO Sam Bankman-Fried made the second biggest contribution to Biden.

The real winner of this election has clearly been Bitcoin as not only the price of the digital currency reached some important levels to climb to a 24-month high, but crypto-friendly faces could be seen in the government too.

Quant trader and entrepreneur Qiao Wang also noted that Trump and Treasury Secretary Steven Mnuchin have been “openly hostile towards BTC.”

Not only “a likely Republican senate to counter Dems’ aggressive regulation tendencies,” but Wang also believes, “Democrats are more likely to create inflation which is good for BTC.”

Recently we also saw Wyoming electing Bitcoiner Cynthia Lummis to the US Senate.

KeyBank NA executive Don Graves has also been tapped for the role, a longtime Biden adviser involved in reviewing bank regulators.

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Author: AnTy

Bitcoin Price Crashes $450 on BitMEX CEO Arthur Hayes & Other Founders Indicted on Criminal Charges

CFTC has charged BitMEX with illegally operating a derivatives trading platform.

Back in July 2019 U.S. Commodity Futures Trading Commission (CFTC) started investigating the exchange with a focus on allowing Americans to trade on the platform while not being registered with the agency.

But as Jake Chervinsky, general counsel at Compound Finance, said the bigger news is BitMEX founder Arthur Hayes, Samuel Reed, and Benjamin Delo being indicted on charges of violating the Bank Secrecy Act, which carries a maximum prison term of five years.

Exchange’s first employee who later became the head of business development, Gregory Dwyer, was also charged and arrested this morning in Massachusetts —the rest remain at large, said the prosecutors.

The founders of BitMEX were indicted by federal prosecutors in New York for failing to comply with adequate anti-money laundering measures at the company.

“These defendants flouted (to do their part to help in driving out crime and corruption) obligation and undertook to operate a purportedly ‘off-shore’ crypto exchange while willfully failing to implement and maintain even basic anti-money laundering policies,” Acting Manhattan U.S. Attorney Audrey Strauss said.

The official press release further states that one of the defendants even bragged about the company incorporated outside the US where “bribing regulators…cost just ‘a coconut.’”

“Thanks to the diligent work of our agents, analysts, and partners with the CFTC, they will soon learn the price of their alleged crimes will not be paid with tropical fruit, but rather could result in fines, restitution, and federal prison time,” it reads.

The real question is, how fast will foreign exchanges that still allow US-based traders to use their service via VPN or without KYC. The implications of this could be huge for the cryptocurrency community.

In response to the news, bitcoin fell from above $10,900 to $10,460 within minutes and is currently trading at around $10,500. The rest of the crypto market also dropped in tandem.

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Author: AnTy

CFTC Tech Advisory Meeting Features Possible Fed-backed CBDC Scenarios

The CFTC Technical Advisory Committee (TAC) discussed a Fed-backed digital currency in the latest remote meeting which it held last week. This comes as more jurisdictions move to consider CBDC’s following China’s progress in this space and the COVID-19 pandemic that has since raised the need for digital money.

One of the keynote speakers, Georgetown Law Professor, Chris Brummer, presented some scenarios under which the U.S Fed could issue a CBDC, comparing the solution to that being advocated by stablecoins. Brummer was keen to highlight that not all CBDC’s are created equal hence multiple scenarios for a dollar-backed CBDC.

Dollar-backed CBDC Design Suggestions

In his presentation, Brummer further detailed six CBDC approaches that the Fed could take in developing a digital dollar. Most notably was the decision of whether to create an account or token backed ecosystem. The former is pretty similar to today’s bank accounts, only that into. A token ecosystem, on the other hand, will be less strict since no identification would be required to operate in the network.

Another suggestion was whether to have the CBDC on both retail and wholesale markets or only on the latter. Wholesale markets encompass commercial banks and other large financial institutions, while a retail market refers to the general public.

Brummer noted that this was another angle the Fed should consider before transforming the CBDC niche idea into a reality. He further summarized that the future of CBDC’s could only be dictated by the issuing authority since some central banks could decide to use commercial banks or issue the currency directly.

Greater Value Than Stablecoins

Recent months have seen stablecoins like the USDT gain popularity as stakeholders in the crypto market seek to preserve value while doing other activities such as yield farming. Brummer now says that CBDC’s set out to achieve a similar goal and could have the upper hand since trusted monetary authorities back them. Brummer said,

“Central bank currencies can be seen as trying to provide more certainty and safety, if one will, behind the utility that a traditional stablecoin aspires to achieve.”

While the underlying value compared to stablecoins is clear, Brummer, however, warned that adopting CBDC’s could destabilize the whole financial ecosystem as well. This is because central authorities might overlap the role of financial institutions in onboarding and serving clients, should they choose to roll out something like an account-based CBDC run by the Fed.

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Author: Edwin Munyui

CFTC Approves Bitnomial Crypto Exchange To Offer Bitcoin Settled Futures Contracts

The Bitnomial Exchange has obtained approval from the Commodity Futures Trading Commission (CFTC) on Monday, April 20th to operate as a Designated Contract Market (DCM) which means the exchange can now offer Bitcoin Futures and Options contracts settled in real Bitcoin.

Bitnomial joins the ever-growing list of companies that offer Bitcoin Futures contracts, such as CME, LedgerX, Bakkt, CBOE, and ErisX. Not to mention these other mixes of hedge funds and crypto exchanges that offer futures: Medallion Hedge Fund, Huobi, OKEx, Binance, and BitMEX.

However, it’s important to note that CME and Bakkt are the main players who attract the majority of the volume, while CBOE has ended its contract offering in early 2019 while ErisX attracts very little volume among its competition.

Bitnomial is following the likes of Bakkt, where instead of settling the futures contracts in Fiat equivalent. Investors would then be offered physical Bitcoin at the time of settlement.

As per the order, issued by CFTC on Monday, the exchange went through a strict inspection and technical evaluation of its operations before it got the nod from the regulatory body.

The press release read:

“The approval allows Bitnomial to tackle a confluence of generational shifts in financial markets: First, a new generation of customers are emerging as savvy with trading, technology and delivery. Second, innovative new unregulated derivatives are booming with daily volumes topping $45 [billion] but maybe illegal for many U.S. traders.”

Bitnomial Trying to Tap “New Growth Areas”

Bitnomial also commented that they would be focusing on “new growth areas,” referring to customers currently untapped by existing futures contracts providers. The platform has opened user signups for its futures contracts, while it’s also planning to launch user acceptance testing by April 27th.

The firm’s CEO – Luke Hoersten – also revealed that they would offer a number of futures products on their platform including quarterly futures, micro futures, and options. The contracts will be settled on-chain instead of book-entry and would trade at a margin of 37 percent.

A physically settled Bitcoin futures contract is still scarce in the United States and it’s believed that Bitnomial is trying to capture a largely untapped market in the ecosystem of the crypto futures.

Bitnomial also got the backing of Jump Capital, whose CEO – Peter Johnson – believes Bitnomial futures product would be a boon for the industry and explained:

“[Bitnomial’s] products are also reliably tied to the underlying asset price via the option for physical delivery.

We’re excited to be partners with a company that is committed to meeting the highest regulatory standards and increasing the accessibility of crypto derivatives to U.S. traders.”

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Author: James W

Is CFTC Tarbert Becoming Crypto Step-Dad? Saying Derivatives Need More Principles Not Rules

Heath Tarbet, the chairman of the U. S. Commodity Futures Trading Commission (CFTC), has recently talked about the regulation of the crypto market. According to Tarbet, who has recently assumed the position at the CFTC, the goal is not to snuff out innovation in the crypto world, but to help it grow in an organized way.

The best way to regulate this kind of asset is by observing a lot before jumping to conclusions and adopting targeted rules for the industry. Tarbert emphasized that regulation based on “principles” does not mean that the measures taken will be too light, only that more detailed rules should give space to more flexible ones.

One of the main points that Tarbert talked about was that if you create too many regulations, people will simply lose respect for the law and stop following it. According to the chairman of the CFTC, regulators need to understand this risk and to avoid taking a heavy hand when regulating this nascent industry.

Given how quick the blockchain market is changing, a principles-based approach should be more effective as a way to properly regulate it without damaging innovation too much, Tarbert believes. The previous chairman, Christopher Giancarlo, was also pro-crypto and believed that the industry should have a “do no harm” approach.

The chairman explained, however, that anyone who presents fraudulent behavior or poses risks for financial stability and other people will not be exempt from regulation.

Right now, the CFTC is considering how to take this approach moving forward, especially concerning crypto exchanges and similar businesses.

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Author: Gabriel Machado

CFTC Chairman Tarbert: Ethereum 2.0 Upgrade Using Proof Of Stake Could Make ETH A Security

The chairman of the U. S. Commodity Futures Trading Commission (CFTC), Heath Tarbert,  recently spoke about how tokens that use proof of stake consensus methods could be labeled as securities by the regulators.

According to him, staked tokens could be considered securities, depending on some factors. The CFTC has previously affirmed that, in the current scenario, Ethereum is not a security but a commodity. However, this could change with the upcoming upgrade for ETH 2.0.

As ETH 2.0 will use staking, the profits from the network are self-perpetuating and it could violate the Howey Test, which is often used to determine whether or not something can be considered a security.

Tarbert affirmed that mining is, by its own nature, a much more decentralized way to get cryptocurrencies and it is because of this that the definition of what Ethereum is might change soon. Staking may require less energy, but it does not seem to be the panacea to the industry that some people believe it to be, especially if it creates problems with regulators.

The chairman said that the entity is thinking carefully about the evolution of the popular blockchain network and he indicated that America should lead crypto regulations in the world. This would help to create an environment in which innovation can flourish freely.

He also defended regulation by using broad principles instead of granular rules, as he believes that strict rules can be bad for innovation, an approach that contrasts a lot with the U. S. Securities and Exchange Commission (SEC), which is pretty strict with applying the law.

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Author: Silvia A

LabCFTC Breaks On Its Own; Blockchain, Crypto, And Emerging FinTech Can Seek Help Regulatory Clarity

The U.S. Commodity Futures Trading Commission (CFTC) has announced the expansion of it’s fintech and blockchain research wing called LabCFTC. The regulatory body has decided to bring in the lab under its own wing and make it a full-fledged office where it would be directly reporting to chairman Heath Tarbert.

LabCFTC was created in 2017 as a part of the CFTC Office of General Counsel’s oversight and has been helping the agency in formulating various policies related to emerging technologies of blockchain, fintech, and cryptocurrency.

The agency’s chairman noted the importance of the research wing and said,

“In its new capacity, LabCFTC will continue to be focused on both internal and external innovation.”

The prime focus of the LabCFTC would be to keep the agency up-to-date with new and emerging technologies, provide aid that the regulatory body can utilize better while enforcing and implementing tech tools during market manipulation attempts.

The research wing since its inception in 2017 has published two major research, one is an educational primer on smart contracts and another on a request for information for ethereum cryptocurrency.

Herbert said,

“our agency’s vision is to be the global standard for sound derivatives regulation. I want the agency to be a resource for you to help identify ways those technologies could fit into the current regulatory structure. Now that LabCFTC’s success has been demonstrated, we want to solidify its position within the agency. Now it will take on an even bigger role here at the CFTC and be a critical link to innovators for years, and perhaps decades, to come.”

LabCFTC is also actively working in the field of Artificial Intelligence (AI) as it is a growing belief that AI can become a potential tool in detecting illicit activities and market valuation. CFTC believe AI can play a crucial role in improving the derivatives market.

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Author: Hank Klinger

Ethereum Derivatives Could be the Next Big Thing as CFTC Clears Ethereum as a Commodity

Commodity Futures Trading Commission (CFTC) chairman Heath Tarbert has cleared one of the most debated topics in the crypto-verse: Does Ethereum fall under the security category or is it a commodity like Bitcoin? CFTC after months of studying Ethereum has decided that the second-largest cryptocurrency is a commodity and thus it falls under their jurisdiction, reported Yahoo Finance.

Tarbert, during the Yahoo Finance’s All Market Summit noted that while everyone was clear regarding Bitcoin’s status, there were some doubts regarding the status of Ethereum even though SEC had earlier made it clear that neither Bitcoin nor Ethereum is considered as Security. He said,

“We’ve been very clear on bitcoin: bitcoin is a commodity. We haven’t said anything about ether—until now; It is my view as chairman of the CFTC that ether is a commodity.”

This is not the first time when CFTC has cleared their views on virtual currencies, back in 2015 during filing charges against a firm called CoinFlip, CFTC has mentioned in the filing that they consider “Bitcoin and other virtual currencies” as commodities. However, this is the first time the commission has issued guidelines for ether.

Forked cryptocurrencies should be treated similar to the parent chain by regulators

The announcement about Ethereum’s status was big news for the crypto-verse, however, the comments of the chairman regarding forked coins was even bigger news. He said forked cryptocurrencies like Bitcoin Cash, Bitcoin Gold and Ethereum Classic and like cryptocurrencies should be treated the same way by regulators as they treat the parent chain since they have been created from the same technology.

Tarbert explained,

“It stands to reason that similar assets should be treated similarly. If the underlying asset, the original digital asset, hasn’t been determined to be a security and is, therefore, a commodity, most likely the forked asset will be the same, unless the fork itself raises some securities law issues under that classic Howey Test.”

Newly created coins can start as Security but can turn into a commodity

Last year in June, SEC’s director of corporate finance Bill Hinman said that all new crypto tokens are Securities, because of their

“promise that the assets will be cultivated in a way that will cause them to grow in value, to be sold later at a profit,” and “typically are sold to a wide audience rather than to persons who are likely to use them on the network.”

However, Tarbert gave hope to the Altcoins by claiming that even those coins which are brought into the market via ICOs and thus categorized as Securities by the SEC can eventually become a commodity. He explained,

“You can have a situation where something in an initial coin offering is security initially, but over time, it gets more decentralized, and there’s a tangible value there, so you can have things that change back and forth.”

2019 has seen many governments and policymakers showing more interest in the crypto space than ever before. The adoption rate has gained significant momentum as several European countries have come out to regulate crypto trading positively while in many struggling States crypto has turned out to be a savior.

The former chairman of CFTC Christopher Giancarlo had quite similar views during a recent interview last week where he said,

“2019 is the year in which there’s a growing recognition that regulators and policymakers need to do more than just be aware of these, but may actually need to look at some policy responses. And I think the thing driving that in 2019 is a combination of Libra and the prospects for central bank digital currencies.”

This year not only mainstream cryptocurrency market has been in the headlines, but the urge of private players like Facebook planning to launch their own stablecoin in the form of Libra has pushed regulators and policymakers around the globe to study the cryptocurrencies more seriously than ever.

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Author: Silvia A