Kryptoin Files for a Physically-backed Ethereum ETF

Investment advisor Krypton has filed a proposal with the US Securities and Exchange Commission (SEC) for an Ethereum exchange-traded fund (ETF) Trust. Back in May, VanEck filed for a similar ETH investment vehicle.

The Delaware-based firm said in its filing that the trust would not purchase or sell ETH directly, rather will do so in ‘in-kind’ transactions in blocks of 100,000 shares.

However, the Trust will be paying its Sponsor a unified management fee in “ETH only,” and the Sponsor will pay all of its operating expenses out of this fee, it added.

With this Trust, the firm’s investment objective is to provide exposure to the second-largest cryptocurrency with a market cap of $378.5 billion, at a price “reflective of the actual Ethereum market where investors can purchase and sell Ethereum.”

The trust provides direct exposure to ETH, and its shares will be valued on a daily basis. Investors who want to buy or sell shares of the Trust will do so through their brokers.

The company has chosen Gemini as its custodian, while a Delaware trust company will act as the Trustee, and the Bank of New York Mellon will serve as its administrator and the transfer agent.

Kryptoin’s application for a Bitcoin ETF submitted in October 2019 is already under SEC’s review.

More than 20 cryptocurrency-related ETFs have been filed so far, but a single one has yet to be approved. Krypton’s Ethereum ETF might not get approved any time soon either as SEC Chair Gary Gensler is more open to futures-backed ETF for greater investor protection, four of which have been filed in less than the last two weeks.

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Author: AnTy

4 Bitcoin Futures-backed ETFs Filed Since SEC Chair Gary Gensler Signaled His Openness to Them

4 Bitcoin Futures-backed ETFs Filed Since SEC Chair Gary Gensler Signaled His Openness to Them

Grayscale’s global head of ETF reads Chair Gensler’s comments to be “very positive,” while ProShares’ head of investment strategy says, “the advantage of this approach is clear.”

Valkyrie Investments is the latest company to file with the US Securities and Exchange Commission (SEC) for a Bitcoin futures exchange-traded fund (ETF).

The crypto trading firm that raised $10 million in a Series A capital round to drive its ETF plans is also awaiting SEC’s decision on its physically-backed Bitcoin ETF.

The Fund, Valkyrie Bitcoin Strategy ETF, however, won’t be investing directly in Bitcoin. Instead, it will seek to purchase Bitcoin futures contracts so that the total value of the crypto asset underlying the futures contracts in it is as close as possible “to 100%” of the fund’s net assets, according to the proposal.

This proposal comes in the wake of SEC Chair Gary Gensler’s comments at the Aspen Security Forum, where he signaled that he is open to an ETF that Bitcoin futures offered by CME backs.

“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.”

Ever since Gensler’s comments, four such filings have been made by VanEck, Proshares, Invesco, and now Valkyrie that aims to provide exposure to Bitcoin Futures, Canadian ETFs, exchange-traded products (ETPs) invested in it, and Trusts like Grayscale Bitcoin Trust (GBTC).

“We read Chair Gensler’s comments to be very positive … because the story is no longer if there’s going to be a bitcoin ETF but when there’s going to be a bitcoin ETF,” said David LaValle, Grayscale’s global head of ETF in an interview with CNBC this week. Grayscale itself is “100% committed” to convert its GBTC into an ETF.

Meanwhile, ProShares’ head of investment strategy, Simeon Hyman, said, “the advantage of this approach is clear,” in terms of the futures market is regulated, CME and CFTC acting as the clearinghouse, people already having the understanding of a mutual fund, and the ability to get in and out every day at net asset value (NAV). Hyman said in a separate interview,

  • “I want exposure to the changing price of bitcoin. I don’t need to access bitcoin in the same way as someone who’s using it for one of its core attributes.”
  • “The futures approach in a mutual fund will absolutely have an important audience out there.”

There are about twenty crypto-specific filings made this year in the US, with the majority of them to hold BTC, while some include Ether and a basket of cryptos.

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Author: AnTy

VanEck Files for a “Bitcoin Strategy ETF” After SEC Chair’s Positive Signal

VanEck has filed for a “Bitcoin Strategy ETF” with the US Securities and Exchange Commission (SEC), which will hold bitcoin futures and other bitcoin funds.

In 2017, VanEck unsuccessfully attempted to list such a fund with the SEC, but now that SEC Chair Gary Gensler has signaled that he is open to an exchange-traded fund backed with Bitcoin futures, four such filings have been made under the 40 Act.

The investment firm, as such, is now resubmitting the application with some amendments and is hopeful for approval, given that future markets have matured significantly in the past four years.

Much like Invesco, which filed its Bitcoin ETF last week, VanEck clarified that “the Fund does not invest in bitcoin or other digital assets directly.”

The fund will be an actively managed ETF that will provide exposure to Bitcoin Futures, pooled investment vehicles including ETFs listed and traded in Canada, and exchange-traded products (ETPs) invested in bitcoin, according to the filing.

These investments will be made through a Cayman Islands-based wholly-owned subsidiary of VanEck.

In June, the firm also filed a similar prospectus for a bitcoin futures mutual fund, managed by Gregory Krenzer, just like the latest fund.

While the Bitcoin, Ether, and crypto ETF applications continue to pile on the SEC’s desk, running in double-digits, the SEC has yet to approve a single crypto ETF. But with Gensler’s recent comments, a product with futures products may finally get approved.

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Author: AnTy

9th Bitcoin ETF Filed in the US; Mike Novogratz’s Galaxy Digital Joins the BTC Race

Billionaire Investor Mike Novogratz’s Galaxy Digital has filed with the US SEC for a Bitcoin exchange-traded fund (ETF).

In the ongoing race to get the first Bitcoin ETF in the US, several companies, nine including Fidelity, VanEck, and NYDIG, have filed applications. Two applications are currently under review of the Securities and Exchange Commission while other applications have yet to have their exchange partners file their corresponding ones as well before the review process can be started by the SEC.

Galaxy is already a sub-advisor to the CI Galaxy Bitcoin ETF listed on Toronto Stock Exchange, which currently has just under $200 million in assets. Canada is actually leading North America in Bitcoin ETFs, with the first one ever Purpose Bitcoin ETF (BTCC) already holding 17,013 BTC ($1.24 billion CAD). In Feb., Novogratz said that,

“Crypto is being institutionalized at an accelerating rate, and now an ETF product is showing up in Canada first, it will show up in the U.S. next. It’s all part of this accelerating evolution of being a store of value.”

Last week, after a year and a half of hiatus, Kryptcoin also filed an amended application for a Bitcoin ETF.

“The Trust will hold bitcoin, process all creations and redemptions in-kind, and accrue its management fee solely in bitcoin,” reads the S-1 filing, which also mentions Gemini as custodian.

This time, the company plans to issue its shares on Cboe BZX Exchange; previously, it was NYSE Arca, just like WisdomTree and VanEck. Cboe has already filed its paperwork with the SEC to provide its services to VanEck’s offering.

There is a growing sense that a Bitcoin ETF might finally arrive in the US thanks to the nominated SEC Chairman Gary Gensler, who has taught courses on cryptocurrency.

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Author: AnTy

NYDIG Files for a Bitcoin ETF with the SEC with Morgan Stanley as Authorized Participant

Bitcoin trading and custody services provider NYDIG has filed for a Bitcoin exchange-traded fund (ETF) with the US Securities and Exchange Commission (SEC).

Morgan Stanley will serve as the proposed authorized participant, as per the NYDIG’s S-1 filing published on Tuesday. Authorized Participants are expected to sell shares to the public at prices that reflect the value of the Trust’s assets, supply and demand for the shares, and market conditions at the time of a transaction reads the document.

If approved, it will trade on the NYSE Arca exchange.

The investment objective of the Trust is to “reflect the performance of the price of bitcoin less the expenses of the Trust’s operations,” but won’t seek to mirror the performance of any index, says the filing.

The subsidiaries – NYDIG Asset Management LLC is the sponsor of the trust, and NYDIG Trust Company LLC would be the custodian of the digital asset.

“Shareholders who decide to buy or sell Shares of the Trust will place their trade orders through their brokers and may incur customary brokerage commissions and charges. Such trades may occur at a premium or discount relative to the net asset value (“NAV”) of the Shares of the Trust.”

NYDIG is the latest in the line of firms filing for a Bitcoin ETF [Accelerate and VanEck], which many are expecting to be approved this year, while JPMorgan strategists believe a Bitcoin ETF approval would have negative implications for the price in the short-term by eroding Grayscale’s GBTC’s effective monopoly status and causing a cascade of GBTC outflows.

No Bitcoin ETF has been approved by the SEC to date.

Just last week, the first publicly traded Bitcoin ETF was approved in North America by Canada’s financial regulator, the Ontario Securities Commission (OSC).

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Author: AnTy

Bitwise Files Application to Launch Exchange Traded Fund (ETF) for ‘Crypto Innovators’

  • Bitwise has filed to launch a new investment product, tracking performances of crypto companies.
  • Investment firms are expanding their operations as crypto demand continues to grow.
  • Asset managers and investment firms in the crypto industry are getting more creative as they look to attract new investors and grow their business.

This week, Bitwise Asset Management, a premier cryptocurrency fund manager, announced plans to launch a new product.

Tracking Crypto-Loving Companies

In its filing with the United States Securities and Exchange Commission (SEC), Bitwise confirmed plans to launch a Crypto Innovators Exchange-Traded Fund (ETF).

The filing explained that the new product would track performances of projects on the Bitwise Crypto Innovators Index. Bitwise describes “Crypto Innovators” firms with services and transactions in blockchain and crypto-facing sectors. These companies include asset custodians, digital trading services, wallet providers, and others.

The Bitwise Crypto Innovators Index will include firms that derive over 75 percent of their revenues from the crypto sector. Eligible companies are required to hold at least 75 percent of their net assets in cryptocurrencies. Bitwise is also looking into large-cap firms that have “dedicated business initiatives” focused on cryptocurrencies.

It is worth noting that Bitwise’s proposed ETF won’t invest in any cryptocurrencies or crypto-based derivatives firms. The company will also not participate in any Initial Coin Offerings (ICOs).

Good Times for Crypto Investment Companies

Bitwise has seen tremendous growth in its core business recently. Thanks to investors’ focus on cryptocurrencies, the firm has seen significant growth in its business. Earlier this year, the company’s assets under management (AUM) surpassed $500 million – a considerable increase from the $100 million in AUM that it held in October 2020.

In a press release, the investment firm explained that most of its new demand came in the fourth quarter of 2020 – a quarter where it surpassed inflows for 2018 and 2019 combined. Most of its new demand came from large investment houses – including hedge funds, financial advisers, family offices, and other institutions.

Bitwise’s most popular product remains its 10 Crypto Index Fund, which provides exposure to the ten largest digital assets by market cap. As the press release showed, the fund drew in $400 million from investors, with the Bitcoin and Ether-focused funds seeing exceptionally high demand. Now that it is launching a new fund, the company hopes to increase its business ventures beyond just cryptocurrencies themselves.

While Bitwise continues to grow in the institutional market, one company that’s in hot demand right now is Grayscale Investments. The New York firm is the industry’s largest asset management firm, and it is making significant expansion plays. It recently filed with the Delaware corporate registry to launch several investment trusts focused on the decentralized finance (DeFi) space.

According to its filing, Grayscale hopes to launch funds targeting top DeFi tokens, including DOT, AAVE, and ATOM. The company is looking to capitalize on the growing DeFi space, which has seen over $20 billion in new assets locked this year alone.

Grayscale is also looking to open investment trusts in top-performing altcoins ADA and XMR, allowing it to expand its current count. The company, which has over $25 billion in AUM, has also seen significant growth in its business as institutions tend to choose it as their go-to source for crypto exposure.

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Author: Jimmy Aki

Here’s Why Coinbase Exchange IPO is ‘Huge’ News for the Crypto Market

The largest cryptocurrency exchange in the US, Coinbase, announced Thursday that it had filed confidentially with regulators to go public. It did not specify whether the exchange plans to go with an initial public offering (IPO) or other listing routes.

The day Coinbase divulged the information, the Bitcoin price also hit a new record of $23,800.

As per the official announcement, Coinbase Global, Inc. has confidentially submitted a draft regeneration statement on Form S-1 with the Securities and Exchange Commission (SEC), which is currently under the process of review.

The news of the San Francisco-based exchange going public is significant for the cryptocurrency market. Coinbase has long been rumored for a public listing for one of the best-known companies in the industry. Jake Chervinsky, the General Counsel at Compound Finance, said,

“If it wasn’t obvious, this is huge news.”

“Sure, there are other publicly-traded companies in the USA with a stake in crypto, but none remotely like Coinbase. The fact that a crypto exchange is suitable for public listing sends a massive signal of legitimacy to the finance world.”

Founded in 2012, Coinbase has been slowly growing its suite of tools, catering to both the retail and institutional investors.

The company is “spiritually” built to go public via an offering that involves digital tokens on a blockchain, said Coinbase co-founder Fred Ehsram in a recent interview with Fortune.

During the company’s last fundraising round for $300 million in 2018, Coinbase was valued at nearly $8 billion, which in the current hot crypto market, has now swelled to $28 billion on the back of an estimated 13,000 retail customers a day and custodying $25 billion of customer funds across 35 million customers. Mira Christanto of crypto data provider Messari noted,

“Following Coinbase’s IPO announcement, we value the company at $28 billion. Coinbase is one of the most prominent exchanges with $1 billion daily volume in Dec-20.”

This IPO will be an opportunity to cash out not only for the early shareholders, including CEO Brian Armstrong and the backers, venture firm Andreessen Horowitz, Y Combinator, and Greylock Partners but also for the employees the means to start their startups. MacroScope, involved in institutional trading and asset management, said,

“Getting major flashbacks right now to Amazon’s IPO in the 1990s, when I was a trader on a big sell-side desk. Feels very similar in several ways including industry backdrop and public sentiment, the latter of which included a huge amount of skepticism and scorn.”

Besides legitimizing the crypto industry, the Coinbase IPO is expected to present another opportunity to jump on the cryptocurrency bandwagon. Some feel this “watershed moment” may even clear how the SEC can approve a Bitcoin ETF.

However, the crypto market wants Coinbase to go public early in the bull run and not run the risk of the top the market.

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Author: AnTy

Binance Files a Defamation Lawsuit Against Forbes to ‘Protect its Hard-Earned Reputation’

The leading spot cryptocurrency exchange Binance has filed a defamation suit against Forbes and its two writers for publishing a story —“Leaked ‘Tai Chi’ Document Reveals Binance’s Elaborate Scheme To Evade Bitcoin Regulators” — last month.

The lawsuit mentions Binance as “a limited company organized under the laws of the Cayman Islands,” which is in contrast with CZ’s comments on the company not having a physical entity rather being decentralized, just like Bitcoin.

Filed in US District Court in the District of New Jersey, the complaint says the article “contains numerous false, misleading and defamatory statements about Binance.”

Forbes staff writer Michael del Castillo, who wrote the article, and Jason Brett, who contributed to it, are named alongside Forbes in the lawsuit.

According to the lawsuit, the false public statements and innuendo by the defendants that the exchange seeks to evade regulators and is engaged in money laundering are “highly damaging to Binance.”

Before filing the lawsuit, Binance asked the Defendants to “remove, retract, and apologize” for the false statements. Still, Forbes’ refusal has led the exchange to take this step to,

“Protect its hard-earned reputation and business, which has been severely damaged by Defendants’ false and defamatory statements and wrongful conduct.”

Binance, whose CEO has previously said they would sue the media publication The Block, has hired Charles Harder as one of the attorneys. Harder represented Hulk Hogan in a privacy invasion against Gawker Media and won the wrestler a $31 million settlement leading Gawker to file for bankruptcy. Bitcoin proponent Andreas Antopolous believes Binance is unlikely to win it as,

“The bar for defamation in the US is, rightly, exceptionally high. There has to be malice and statements of fact, not opinion.”

“In my opinion, this will fail, quickly, and Binance will probably end up paying the court costs too.”

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Author: AnTy

BitMEX & Founders Sued Again for Market Manipulation, Racketeering, and Money-Laundering

BitMEX legal woes appear to be far from over after another lawsuit was filed against the crypto derivatives exchange. The lawsuit filed in a California court by a Romania resident Păun Gabriel-Razvan claims that BitMEX parent company, HDR Global Trading Limited, and its founders engaged in illegal activities, including market manipulation, racketeering, and money-laundering.

With the company’s former CEO Arthur Hayes still at large, it has been a couple of rough months for BitMEX since the DoJ and CFTC initiated lawsuits against the firm. The trend is now picking on an individual scale as more people seek to sue BitMEX for ‘alleged’ manipulation tactics through the exchange’s internal trading desk.

The New Lawsuit Against BitMEX

The lawsuit by Păun Gabriel-Razvan comes barely a month since a Moscow based resident filed a similar complaint by the name Dmitry Dolgov. Interestingly, both plaintiffs are being represented by the same counsel who goes by Pavel Pogodin; this attorney works at Consensus Law. The latest filing claims that BitMEX facilitated illegal finance activities by skipping crucial KYC and AML practices hence,

“Hackers, tax evaders, money launderers, smugglers, drug dealers all flocked to BitMEX flooding the platform with hot money,”

It goes to highlight that BitMEX directly benefited from market manipulation through its internal trading desk, giving the following example;

“A money launderer (Defendant) would open two exchange accounts – a helper account on one or more exchanges used by BitMEX to calculate its index price (Coinbase Pro, Kraken, and BitStamp) and a winner account on BitMEX.”

The court filing details,

“The money launderer would then enter into a large leveraged derivatives position on BitMEX and immediately execute market orders from the helper account with maximum slippage to move the index price in a favorable direction.”

According to Pogodin, who spoke to the Block, his client lost 247.94 BTC as a result of these malpractices. They are now seeking 3 times compensation, translating to around $12.8 million as per prevailing market prices. The suit also seeks punitive damages worth $50 million per California’s law coupled with attorney fees, costs, and interest on the defrauded Bitcoins. Pogodin further noted that more lawsuits against BitMEX would probably follow as more ‘victims’ are coming forward.

BitMEX to Fight the Issue in Court

However, BitMEX appears unbothered by Pogodin’s lawsuits against the firm, according to a spokesperson who shared sentiments with the Block. The spokesperson said that they will pursue the issue through litigation and are optimistic that the courts will rule in the favor,

“As we’ve said before, regrettably, Mr. Pogodin operates just like a patent troll, filing ‘copy and paste’ complaints against us based on rehashed information culled from the internet.”

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Author: Edwin Munyui

Cryptocurrency Lending Firm Cred Files For Bankruptcy After ‘Irregularities in Funds’

Cred, a united States-based crypto lending firm, has filed for chapter 11 bankruptcy protection giving a rude shock to its customers. The legal team of Cred filed the bankruptcy papers on November 7th in the District of Delaware. The legal filings revealed that the crypto lending firm had estimated assets worth $50-$100 million while their liabilities stand at $100-500 million.

Looking at customers’ reactions who are now worried about their funds, it is apparent that the firm did not keep customers in the loop of things. The bankruptcy announcement comes in the wake of the October 28 announcement about stopping the inflow and the outflow of funds from the platform for two weeks.

In its official statement, the firm noted that the decision to file for bankruptcy was finalized to safeguard the funds and maximize the value of the platform for its creditors.

Customers Suspect Criminal Proceedings

The customers who have their funds locked with Cred believe that the firm is hiding something and believe it could be under investigation for financial fraud. These rumors were fueled by the statements made in a tweet from the official Twitter account of the company. After prohibiting the inflow and outflow of funds, the crypto lending platform on Twitter said that the suspension was because of an ongoing criminal investigation about possible “irregularities in the handling of specific corporate funds by a perpetrator.”

The suspension, along with the shady explanations, hardly convinced anyone, and shortly before their bankruptcy announcement, their trading and wallet partner Uphold terminated all associations with the lending firm.

Cred later cleared that the fraudulent activity that led to the criminal investigation did not compromise any customer info or their funds. However, many users complained about not being able to access their funds in the wake of funds inflow and outflow suspension. Cred wrote on Twitter,

“No Cred systems or customer information have been compromised. We are on track to deliver a more comprehensive update in the next 7 – 10 days.”

To which a user replied,

“The funds we invested with Cred still safe with this chapter 11 bankruptcy?”

The consumers now have to wait for the court proceedings to complete the Chapter 11 bankruptcy filing before getting their hopes high.

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Author: Rebecca Asseh