Dubai to Allow Crypto Trading within Tax-Exempt Economic Zones

The Securities and Commodities Authority (SCA) of the United Arab Emirates (UAE) has signed an agreement with the Dubai World Trade Centre Authority (DWTCA) to support the trading of cryptocurrencies in DWTCA’s free zone, reported the state news agency.

Under this agreement, a framework is established that allows DWTCA to issue approvals and licenses necessary to conduct financial activities relating to cryptocurrencies.

“Dubai poised to become crypto hub,” commented Su Zhu, CEO, and co-founder of Three Arrows Capital. “Crypto bigger epochal shift than the discovery of petroleum itself.”

As part of its efforts to drive innovation and become a digital economy hub, Dubai World Trade Centre Authority also announced on Wednesday that it would support the regulation, offering, issuance, listing, and trading of crypto and related financial activities within its free zone.

SCA meanwhile will be overseeing, monitoring, and inspecting entities operating within this free zone.

As the region’s financial hub and tax haven, Dubai has taken several steps to bolster the use of blockchain within the city.

The Airport Free Zone Authority of Dubai also signed a similar agreement with the SCA back in May. In June, a Bitcoin Fund – the first of its kind in the region – was listed on the Nasdaq Dubai exchange.

According to financial analysts, Dubai is well-positioned to benefit from the growing crypto market in the Middle East as regulators work on favorable rules leading to its acceptance and promotion of blockchain-based technologies.

“With the rise of new technologies such as non-fungible tokens set to play an important role in the future of commerce…DWTCA is also pursuing ways to offer a sustainable home for this ecosystem, in order to stay future ready,” said Helal Saeed Almarri, director-general of DWTCA.

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Author: AnTy

Hong Kong’s Securities Regulator Official Calls for Expanding its Supervision Scope to Crypto

Hong Kong’s Securities Regulator Official Calls for Expanding its Supervision Scope to Crypto

To crack down on unlicensed virtual asset trading due to investors suffering huge losses.

Hong Kong Securities and Futures Commission (SFC) is talking about cracking down on unlicensed cryptocurrency trading in order to strengthen investor education.

Liang Fengyi, deputy chief executive of the Commission, said on Tuesday that in the future, the scope of their supervision should be expanded to virtual assets due to a growing number of virtual asset frauds.

Virtual assets are not securities or payment methods; as such, they do not fall within the jurisdiction of the China Securities Regulatory Commission. But with many investors have suffered huge losses, the agency believes that it is obliged to expand the scope of supervision.

According to the local publication, Fengyi noted that while developing cryptocurrencies, it is also necessary to crack down on unlicensed cryptocurrency transactions.

The SEC will also be working with the police to combat “pump and dump” fraud in the cryptocurrency field to educate the public, she said.

The city government is also expected to propose a bill that would require the service providers to apply for a license, as shared in May. Such a bill, which will be proposed in the 2021-2022 legislative session, would give the agency powers over the virtual asset service providers.

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Author: AnTy

Uniswap Labs, Startup Behind Powerhouse DEX, is Being Investigated by the SEC: Report

The US Securities and Exchange Commission (SEC) is investigating Uniswaps Labs, the startup behind the leading decentralized exchange (DEX), reported The Wall Street Journal on Friday, citing people familiar with the matter.

According to the report, enforcement attorneys are seeking information about how people use the DEX and how it is marketed.

The agency, however, didn’t confirm or deny the investigations to the news outlet. But the report says the investigation appears to be in its early stages and may not even result in any formal allegations of wrongdoing.

This comes as regulators probe further into the cryptocurrency market, going for the decentralized protocols which don’t have any middleman and provide direct access to investors without any broker.

SEC Chair Gary Gensler recently said that decentralized finance (DeFi) projects are not immune from oversight. He also called on lawmakers to give the SEC more power to oversee these platforms.

The absence of clear investor protection obligations means “the investing public is left vulnerable,” said Gensler this week.

Gensler has repeatedly said that the agency could regulate DeFi, and they even have a “fair amount of centralization” in terms of governance, fees, and incentives and called DeFi a “bit of a misnomer.”

Uniswap Labs, however, is “committed to complying with the laws and regulations governing our industry and to providing information to regulators that will assist them with any inquiry,” a Uniswap Labs spokesperson told The Journal.

“They went after a company building software. They don’t operate the exchange. It’s a very shitty precedent,” commented Banteg, a lead developer of DeFi blue-chip Yearn Finance. “Probably every DeFi project got hit at this point, even NFTs and full decentralization didn’t protect Uniswap.”

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Author: AnTy

Morgan Stanley Discloses Holding More than 5.8 Million GBTC Shares

In its filing with the US Securities and Exchange Commission (SEC), banking giant Morgan Stanley revealed that it owns a large amount of Grayscale Bitcoin Trust (GBTC) shares, currently trading at $39.12, at a 13.36% discount to Bitcoin, which is hovering around $47k.

Morgan Stanley owns GBTC shares across multiple portfolios, with the largest 928,051 shares held by its Insight Fund.

Twelve separate mentions of Morgan Stanley Institutional Fund Inc show a collective 4,772,064 GBTC shares, while two of the three Morgan Stanley Variable Insurance Fund Inc. owns a total of 179,703 GBTC shares.

Overall, the bank owns 5,879,818 GBTC shares worth $230 million.

Additionally, all of the Morgan Stanley Institutional Fund Trust shows 611,868 GBTC shares in the filing.

Back in late June, when BTC was trading in the below $30,000s, Morgan Stanley had also disclosed a position worth $1.3 million in GBTC via their Europe Opportunity Fund.

With trillions of dollars in assets under its management, Morgan Stanley is one of the biggest traditional participants to explore cryptocurrencies and investing in crypto infrastructure.

Competitors Wells Fargo, JPMorgan, and Goldman Sachs, are also investing in the crypto space and planning to offer their clients access to cryptocurrencies.

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Author: AnTy

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

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

Stock Tokens, Even on Decentralized Platforms, Must Adhere to Securities Laws: SEC Chair

Stock Tokens, Even on Decentralized Platforms, Must Adhere to Securities Laws: SEC Chair

The US Securities and Exchange Commission (SEC) is renewing its efforts to impose “long overdue” rules for the registration and regulation of security-based swap execution facilities, including tokenized stocks, said Chair Gary Gensler on Wednesday.

In his prepared speech, Gensler said he wanted the SEC to coordinate such derivatives rules with those already in place at the Commodity Futures Trading Commission (CFTC), which has the bulk responsibility for overseeing derivatives.

When it comes to the cryptocurrency industry, Gary Gensler emphasized that any crypto token priced off the value of securities, be it a stock token, a stablecoin backed by securities, or any other product providing synthetic exposure to securities; must adhere to securities laws, even if offered on a decentralized platform.

“These platforms — whether in the decentralized or centralized finance space — are implicated by the securities laws and must work within our securities regime,” he said in a speech at the American Bar Association Derivatives and Futures Law Committee Virtual Mid-Year Program.

While the SEC has brought some cases involving retail offerings of security-based swaps, “there may be more,” added Gensler.

Regarding tokenized stocks, the leading cryptocurrency exchange Binance has been asked by authorities in Germany and Hong Kong to stop offering these products.

Last week, the exchange announced that they are “winding down” support for these tokens on Binance.com effective immediately and would no longer be available on its website after October 14.

In other news, the US Banking, Housing, and Urban Affairs Committee will be conducting an open session called “Cryptocurrencies: What are they good for?” next week on July 27.

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Author: AnTy

SEC Extends Decision On WisdomTree’s Bitcoin ETF Application

The U.S Securities and Exchange Commission (SEC) has postponed its decision on WisdomTree’s Bitcoin exchange-traded fund (ETF) application.

SEC Seeks Public Comments On WisdomTree’s Application

The SEC pushed back its decision to get feedback from the public on WisdomTree’s application. According to the federal securities regulator, public comments would help ascertain whether the ETF would be safe for investors.

The public would be required to communicate their position on whether the ETF should be approved or denied.

The SEC also wants to know if the public thinks that the proposed Bitcoin ETF would be susceptible to market manipulation. It also intends to determine if the ETF is designed to prevent fraudulent and manipulative acts and practices. The SEC explained,

“The Exchange asserts that the manipulation concerns previously articulated by the Commission are sufficiently mitigated to the point that quantifiable investor protection issues outweigh them.”

Members of the public are expected to submit their comments to the Federal Register within 21 days, while rebuttals would be filed 35 days from publication.

The SEC is still struggling to decide on whether to approve an ETF or not. This is the second time the regulator is asking for public comment on the same WisdomTree’s application.

The first time the commission asked for public comments was in April this year, a month after WisdomTree first filed its Bitcoin ETF application. On May 26, the SEC designated even a longer time to approve or disapprove WisdomTree’s proposed rule change.

WisdomTree has been working on ETFs since last year.

In June 2020, the firm applied for an ETF focused majorly on agriculture, energy, and metals, in which 5% of the assets would be invested in Bitcoin futures contracts. In addition to its Bitcoin ETF, the firm also filed for an Ethereum ETF in May this year.

WisdomTree Investments was founded in 2006 as an asset management firm based in the US. The company has subsidiaries in Canada, Europe, and Japan and was established by Jonathan Steinberg.

The SEC Continues Stalling ETF Applications

The SEC is still reviewing several applications for both Bitcoin and Ethereum ETFs. Some of the applications have come from firms like VanEck, Kryptoin, and Fidelity. The regulator is yet to approve any crypto ETF within the US.

Proponents claim that a Bitcoin ETF can help investors by creating a more regulated market. Yet, the SEC continues to stall while citing volatility and market manipulation as key concerns in rejecting the ETF applications.

Former chairman of the US Commodity Futures Trading Commission (CFTC), Timothy Massad, recently urged the SEC to approve a Bitcoin ETF. In a Bloomberg opinion piece, Massad said the SEC should look into approving an ETF in a way that would enhance transparency and integrity in the industry.

SEC Commissioner Hester Peirce has also made solid points supporting the approval of a Bitcoin ETF. According to CNBC, Peirce said a Bitcoin ETF approval is overdue and argued that the rejections for such funds are a kind of double standard.

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Author: Jimmy Aki

SEC Delays VanEck Bitcoin ETF Decision Again, Another 45 Day Wait Period

The US Securities and Exchange Commission (SEC) seems to be struggling to make its mind up about Bitcoin exchange-traded funds (ETF). The agency has once again extended the review period for the VanEck Bitcoin ETF application by 45 days.

This is the second time the SEC is delaying its decision on the VanEck Bitcoin exchange-traded fund (ETF) application. The regulator first extended its decision in April 2021.

SEC To Accept Comments On The VanEck Bitcoin ETF Application

According to the order filed on Wednesday, the SEC said it would now accept public input on the proposed rule change surrounding the VanEck Bitcoin ETF. This would help guide its decision on whether to approve the fund or not.

The regulator asked the public for comments on the vulnerability of the ETF to market manipulation and if Bitcoin is suitable as an underlying asset for an ETF.

The commission also wants to know commenters’ views on whether the regulatory landscape relating to Bitcoin and other digital assets has changed since 2016.

The regulatory answer to that question could have deep implications for Bitcoin and other cryptocurrencies like Ethereum, which is also yet to get approval to be used in exchange-traded funds.

Interested people who wish to comment on the proposed Bitcoin ETF have until 21 days after the order is published in the Federal Register and 35 days after publication in the same register for rebuttals.

VanEck had filed for the Bitcoin ETF in December 2020. In March, the Chicago Board Options exchange (Cboe) pleaded for VanEck when it filed a request to list and trade shares of the VanEck Bitcoin fund, thereby putting the SEC on the 45-day clock.

The SEC’s 45-days window, which started in April 2021, was expected to end on June 17, 2021. The latest extension means we don’t know the fate of the VanEck Bitcoin ETF until August 3, 2021.

The SEC typically renders a decision on future applications within 45-day windows but can also take up to 240 days to decide.

The US Continuous Delay In Approving A Bitcoin ETF

Despite the change in leadership at the SEC, the agency has so far shown no sign of approving any Bitcoin ETF anytime soon.

The agency has often cited fraud and market manipulation as obstacles to its approval, but applicants have made arguments as to why those issues are blown out of proportion.

Apart from VanEck, there have been at least seven other applications of firms seeking to launch competing funds but none has been approved.

Given the SEC’s continued delay in approving the ETFs of firms like VanEck, WisdomTree, Kryptoin, and Fidelity Investments, many do not expect approval soon.

However, Canada remains one of the most progressive countries in terms of ETFs. Over the past few months, the North American nation has approved both Bitcoin and Ether ETFs.

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Author: Jimmy Aki

SEC’s 2021 Regulatory Agenda Does Not Include Bitcoin or Crypto

With cryptos like Bitcoin deemed not securities, they fall out of the SEC’s jurisdiction, and the agency has no legal authority to regulate the crypto space while continuing to postpone the decision on Bitcoin ETFs.

The US Securities and Exchange Commission (SEC) has released its regulatory agenda for 2021, but Bitcoin is not part of it.

Its focus is rather on short-selling, a topic that gained momentum after the retail mania with meme stocks GameStop and AMC Theaters.

The SEC’s agenda shows the regulator will focus on climate risks, market structure modernization, and transparency around stock buybacks, short sale disclosure, securities-based swaps ownership, and the stock loan market.

Investment fund rules, enhancing shareholder democracy, special purpose acquisition companies, and mandated electronic filings are other things on the agenda. SEC Chair Gary Gensler said,

“To meet our mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation, the SEC has a lot of regulatory work ahead of us.”

“I look forward to collaborating with my fellow commissioners and the dedicated staff to propose and finalize rules that will strengthen our markets, increase transparency, and safeguard investors.”

The fact that the SEC deems cryptocurrencies like Bitcoin, not securities, fall out of the SEC’s jurisdiction. Basically, SEC has no legal authority to regulate the crypto space, and there’s no clarity around which regulatory body non-security crypto assets fall under.

“Laws need to change before the SEC has authority over bitcoin,” said Jeff Dorman, CIO at Arca.

Meanwhile, the approval of a Bitcoin exchange-traded fund (ETF) is in no way close to being done despite several companies having filed for both Bitcoin and Ether ETFs.

SEC has already postponed its decision on VanEck’s Bitcoin ETF, and on Monday, it delayed another one, Kryptoin ETF, by 45 days to July 27.

SEC’s new chairman Gary Gensler, who has taught blockchain classes at MIT and was expected to be crypto-friendly, recently said that cryptocurrencies are a “highly volatile asset class” and that the public would benefit from more investor protection on the crypto exchanges.

“There’s a lot of authority that the SEC currently has in the securities space, and there are a number of cryptocurrencies that fall within that jurisdiction but there are some areas, particularly bitcoin-trading on large exchanges, that the public is not currently really protected.”

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Author: AnTy