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

‘Warning Shot’ for DeFi: BitMEX Charges are ‘Incredible Bearish’ for this Burgeoning Sector

Prosecutors in the United States filed criminal charges against BitMEX, accusing it of violating the federal Bank Secrecy Act.

The CFTC has been investigating one of the biggest derivatives exchanges for some years now. Still, the effect of this news on the prices of digital currencies is expected to be bearish but only in the short term.

It will actually be bullish in both medium and long term and “likely be a boon for other regulated futures exchanges that offer significant leverage. Gambling is gambling,” said Bill Barhydt, co-founder & CEO at Abra.

But while regulation will help the market at large, it may not be such a good thing for the decentralized finance (DeFi) sector.

Time for DeFi Providers to Wake Up

According to Barhydt, it is actually a “warning shot” for DeFi service providers who think registrations don’t apply to them, “That’s pure nonsense. Lawyer up now.”

With the DOJ talking about the BitMEX co-funders to “soon learn the price of alleged crimes,” which will be paid in “fines, restitution, and federal prison time,” — it’s time for DeFi providers to wake up.

“DeFi services are not sufficiently decentralized today to have no central off switch. That means the companies behind them are at risk. Oracles are another problem…Set your alarms for the moment of truth,” Barhydt said.

As we saw only recently during the KuCoin hack, several crypto projects froze the stolen funds, putting a big question mark on the decentralized nature of them all, which wasn’t even the first time.

Given that DeFi has the highest beta, “flight to safety” is another reason why the BitMEX incident is not bullish for DeFi, said trader and economist Alex Kruger.

Moreover, while the authorities are going after managers individually over the criminal allegations, for the market, smart contract creators and promoters won’t be far fetched, regardless if it is even true, he added. And what the market thinks matters.

A Small Winter for DeFi

Over the past few months, the DeFi sector grew immensely, from about $1 billion in mid-June to $14.6 billion earlier this week, as per Debank.

For the past few weeks, DeFi tokens have been cooling down, with yields significantly lower than they were a month ago.

While the impact of the news on the price of Bitcoin and altcoin might be over, we could see “relative weakness across DeFi.”

As seen in the past 24 hours, the cryptos lost 4% to 12% compared to the DeFi ones, which are down 10% to 25%.

As we reported, a small DeFi winter has also been expected.

“Most DeFi bluechips trade like classic bubbles bursting,” said trader Qiao Wang who sees it more like the spring 2013 bubble, meaning this won’t be a multi-year nuclear winter, because of the strong and improving fundamentals, total market cap of these tokens still small, and more brrrr likely to come next year.

“2021 will be great, IMO,” he added.

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Author: AnTy

ECB Files for a ‘Digital Euro’ Trademark as Central Banks Turn Focus to CBDCs

The European Central Bank (ECB) filed an application last week to trademark the name ‘digital euro’ as the CBDC craze gains momentum. A report by Bloomberg revealed that the ECB applied for the ‘digital euro’ trademark through its German-based legal representatives, Bock Legal. This development comes barely a week since ECB president Christine Lagarde confirmed that the regulatory body is exploring the potential benefits and downside risk of issuing a ‘digital euro.’

Speaking at the European Parliament, Lagarde highlighted that the EU is yet to make a decision on whether it will issue a digital euro. However, she was also keen to note that the bank is actively exploring the CBDC space as per its mandate in monetary oversight,

“We are exploring the benefits, risks and operational challenges of doing so … We have a duty to play an active role in balancing the risks and benefits of innovation in payments, so that money continues to serve Europeans well.”

While a practical digital euro phase may take some time, the move by ECB to trademark this name further shows the underlying potential of CBDC disruption. A newly released report by Deutsche bank estimates that around 80% of the world’s central banks have already embarked into some CBDC activity, even if its minimal research. In Europe for instance, Italy and France have already committed to participating in a digital euro-pilot.

China on the other hand is setting the pace for a tokenomics dominance, having begun the digital yuan pilot back in April. This initiative had been ‘under the hood’ for close to five years but was only piloted post-lockdown. People’s Bank of China (PBoC) is in charge of the digital yuan ‘e-RMB’ and intends to gradually replace fiat currency in circulation as part of scaling its monetary effectiveness in the age of cryptocurrencies.

Other jurisdictions that are likely to be at par or slightly behind China include the Bahamas and Thailand. The former is set to launch its CBDC ‘Sand Dollar’ this month while Thailand has partnered with Hong Kong to build a cross-border CBDC. This initiative is currently in the second phase where ConsenSys is set to lead product development, working alongside PWC and Forms HK.

Also Read: Fed Researching CBDC & Planning to Deposit ‘Digital Dollars’ Directly To the Digital Wallets of Americans

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Author: Edwin Munyui

Epic Games Sues Apple for Preventing Fortnight from Using Bitcoin as Alternative Payment Option

Epic Games, the maker of Fortnite has filed a lawsuit against Apple after the company removed the popular video game from their app stores after it implemented its own in-app payments.

According to the lawsuit, Apple’s anti-competitive conduct eliminates alternative payment options like Bitcoin to be used in the game.

Epic Games wants to use alternative payment processing tools beyond Apple’s In-App purchase to spur innovation and provide its users with lower prices and better service. The document reads:

“These innovations could include, for example, alternative means to pay for in-app purchases of in-app content—which Apple does not offer—such as billing to the customer’s cellular carrier, using Bitcoin or other cryptocurrencies, offering rewards points to customers, or providing more than one in-app payment processor.”

Besides the antitrust lawsuit that sought to establish Apple’s App store as a monopoly, Epic also aired a protest video on YouTube calling on gaming fans to support its fight against Apple.

Apple confirmed in a statement to The Verge that they removed the game from their app because it violated the App store guidelines regarding in-app payments. The company also said that they would work with Epic to “resolve these violations” but has no intention to create a “special arrangement” for the company.

Epic also implemented its own payment system in the Android version of Fortnite, leading Google to remove the game from the Play Store as well. However, Android users can still download the game from Epic’s own app launcher as the “open Android ecosystem lets developers distribute apps through multiple app stores.”

As for the iOS users, those who have already downloaded Fortnite can still access the game, but new downloads are disabled. Users meanwhile can still use Epic’s in-app payment system.

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Author: AnTy