Is The SEC Lawsuit a Blessing in Disguise for Ripple & XRP Investors?

The Trump administration’s parting shot pushes XRP down 46% this week but small XRP addresses continue being created at a fast pace while trading is suspended on three exchanges.

A day after Ripple CEO Brad Garlingouse intimated the crypto community about the upcoming lawsuit against XRP over the sale of unregistered securities, the US Securities and Exchange Commission (SEC) did just that.

SEC has charged Ripple and its two executives, co-founder Chris Larsen and CEO Garlinghouse for raising more than $1.3 billion through “an unregistered, ongoing digital asset securities offering.”

Not just this, Ripple has allegedly distributed billions of XRP in exchange for non-cash consideration. Additionally, both Larsen and Garlinghouse “effected personal unregistered sales of XRP” totaling at $600 million.

“We allege that Ripple and its executives failed over a period of years to satisfy these core investor protection provisions, and as a result, investors lacked information to which they were entitled,” said Marc P. Berger, Deputy Director of the SEC’s Enforcement Division.

The SEC’s complaint is filed in the federal district court in Manhattan and charges the defendants with violating the Securities Act.

Immediate Effect

The legal case in itself will take years to come to a conclusion but in the immediate future, the price of the digital asset took a beating. This week, XRP has lost 46% of its value, currently trading at $0.354. XRP actually hit a new low against BTC which continues to surge higher and higher.

“Bag holders want to see .304 hold on a weekly close to establish topside HTF support,” said trader Mr. Anderson. Another trader, CryptoYoda noted,

“Tightening stops. worried about potential of XRP imploding if support doesn’t hold and the resulting repercussions in the overall markets. might be a non-event, just making sure I don’t stand on the beach when the tsunami hits.”

Since the news broke, while the number of large tier addresses is shrinking, small XRP addresses being created haven’t skipped a beat in its uptrend, as per crypto data provider Santiment.

And with this, the digital asset dropped one step and Tether retook the place of the third-largest digital asset by market cap.

In the meantime, 133,152,655 XRP (48,850,963 USD) has been transferred from the Ripple founder Jed McCaleb’s Settlement account to his wallet, noted Whale Alert.

Additionally, crypto exchange OSL has suspended all XRP trading services on its platform, effective immediately. The exchange is well known in Asia for its OTC services but isn’t much for retail exchange trading.

Two smaller crypto trading platforms, Beaxy and CrossTower have also halted trading for XRP already.

Is it Security?

After avoiding this level of intervention for years, SEC Commissioner Jay Clayton seems to be ticking off one last thing from his to-do list before his departure from the office.

“For XRP hodlers, this could be a blessing in disguise,” because the question of whether XRP is a security has been dangling over the early investors, wrote Mati Greenspan in his daily newsletter Quantum Economics.

But that is if it is not deemed security because if it is XRP will be basically “useless,” making it difficult for anyone to use it for settling transactions. Jake Chervinksy, General Counsel at Compound Finance said,

“Alleging violations through present-day is a kill shot. Charging individual executives is remarkable. This is the SEC playing hardball.”

However, Messari founder Ryan Selkis, a known XRP antagonist believes the argument of XRP being security is “silly.” However much “unethically marketed and distributed” XRP was, “that still doesn’t mean it’s a security,” he wrote.

According to Selkis, USG is going to lose because they are outclassed on legal as Ripple has a lot of money to put into action, and USD should lose because the Howey test is broken, SEC’s restrictions on non-accredited investors is outdated and un-American, and because “it’s incumbent upon industry to self-police.”

Not to mention, regulators get to fine and tax Ripple, so no gain in killing a “domestic golden goose,” he said.

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Author: AnTy

Former Goldman Sachs President Not a ‘Strong Believer’ in Bitcoin; It ‘May Fail’

Gary Cohn, former economic chief to Donald Trump, says Bitcoin may fail, despite the digital asset having more than a decade long history, growing adoption, and increasing value from mere cents to $19,550 today.

On being asked about his views on Bitcoin, which is on a tear, and how the digital asset and cryptocurrency fundamentally transform our economy, Cohn had the typical ‘love blockchain but hate bitcoin’ reply. Former Goldman Sachs President and Chief Operating Officer in an interview with Bloomberg on Tuesday said,

“When we talk about blockchain we come back and talk about the infrastructure, that’s the highways and the pipes that are necessary for bitcoin but they’re necessary for many other applications and I think they’re very useful and I’m very bullish on them.”

As for Bitcoin, he doesn’t have a “strong opinion” on the flagship cryptocurrency, which has a market cap of $360 billion. He said,

“In essence, I’m not a strong believer in bitcoin… it is a developing asset potentially and for all the reasons it’s a strong developing asset class it may fail.”

He further explains that part of an asset class’s integrity to a system is knowing who owns it, why it’s being transferred, and if it is used for legitimate causes or corrupt practices. The 60-year old said,

“The bitcoin system today has no transparency to it, so there are a lot of people that question why would you need a system that does not have an audit trail, does not have integrity.”

According to him, Bitcoin “lacks some of the basic integrities of a real market” because “you don’t know who owns it, you don’t know exactly how much exists today, how much has been mined how much has been lost, how much has been thrown away on hard drives because they don’t exist anymore so it.”

This is the weakest argument ever for starters, he is talking about cash, and second, if Cohn had bothered to get himself acquainted with Bitcoin, he would have known the most extensive network is a transparent one, and that’s why the different government agencies have been able to catch people trying to route their funds in BTC to avoid authorities.

Haters are just going to hate and miss being part of this revolution until it’s too late.

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Author: AnTy

Former Coinbase Exec Nominated by President Trump to Lead US Comptroller of the Currency

President Trump has made several nominations, amongst them being that of the Office of the Comptroller of Currency (OCC), where former Coinbase Chief Legal Officer Brian Brooks is currently at the helm acting capacity. He has now been nominated to serve in a permanent position for the next five years, should the lame-duck senate approve his appointment.

Brooks assumed his acting role at the OCC in May after Joseph Otting resigned from the position, prompting Treasury Secretary Steven Mnuchin to replace him. Before this, he had served as Coinbase’s general counsel, a background that made stakeholders optimistic of a more crypto-friendly OCC. Unsurprisingly, Brooks has introduced significant changes in line with Fintech and crypto services.

One of his office’s most popular moves was the announcement that regulated U.S banks could offer crypto custodial services. Since then, U.S banks have loosened their gun-shy approach towards crypto with some launching services in this niche. The OCC also announced in September that these financial institutions could further extend their services to stablecoin providers.

In a recent Forbes interview, the acting OCC head elaborated some options that payment companies, including crypto, can pursue to receive a federal bank charter. Per the breakdown by Brooks, firms can acquire this charter by applying for a non-depository bank charter, National Trust Bank Charter, or buying a depository institution.

Confirmation Still Uncertain

With the U.S elections just recently concluded, the Brooks appointment by outgoing President Trump could face some challenges if the senate does not act before Jan 20. This is when President-elect Joe Biden is expected to assume office, which means he could nominate another person for the position.

Notably, Brooks has faced a backlash from the Democrats in the past, especially with handling the COVID-19 pandemic. His appointment will first go through the U.S banking senate committee, which will hold a confirmation hearing before a decision is voted in the senate.

Meanwhile, Brooks has already welcomed the nomination by President Trump, noting that he will continue to advance the mission of the OCC if confirmed,

“As Acting Comptroller of the Currency, I am proud to contribute to this 157-year-old mission.

If confirmed, I will work ceaselessly to ensure the agency continues to fulfill its critical mission and the men and women of this agency have the resources, training, and leadership they need to succeed in their duties.”

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Author: Edwin Munyui

Bitcoin Seeing New ‘Macro Bullish’ HODLers; Traders Call Out Short Term Sell-Off Before New High

Yesterday, we managed to get back above $10,800 before President Donald Trump sent the BTC price tumbling by announcing that he broke off the additional coronavirus relief fund negotiations with the Democrat.

Unsurprisingly, Bitcoin’s drop of 2% was in tandem with the equity market, which fell nearly 1.8%. But interestingly, it was gold that got hit the hardest, about 2.6%.

Markets are still wobbly, despite Trump backtracking, with altcoins continuing to drown in losses.

With notable losers including CREAM (24%), SWRV (20%), YFI (14%), SUSHI (13%), CRV (12%), and Aave (10%) DeFi tokens continue to bleed the most.

Micro Scenario

While the leading digital asset’s price remains subdued, bitcoin realized volatility has hit a three-year low at 20%.

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As we reported, this could result in a bout of volatility. Although network activity calls for bulls, bears can’t be called off altogether as the last time bitcoin realized volatility hit the lowest was right before the crash of November 2018 started.

“Bitcoin 30-day historic volatility has been falling fast and is in the ’20s. In the past, it has hit 20% vol 7 times. 6 times prices exploded higher immediately, and vol hit 80% in a few months. 1 time (Nov 2018) prices fell sharply. Either way, a big move is coming soon,” noted Raoul Pal of Real Vision Group.

Before BTC could jump higher in the near term, many are waiting for the price to take a dip first.

“I remain bearish for the time being. 10k support was tested, but lack of strength is apparent, price action is weak, no volume. breaking last low of $9,882 would likely trigger massive selling across the board. bearish until convinced otherwise by bull strength,” said Trader Crypto Yoda.

And while trader Loomdart is also looking for a downwards move, he doesn’t see BTC breaking the important $10,000 level before hitting the 2019 high of $14,000.

Macro Bullish

Amidst this, the coins on the spot exchanges are dropping, which is even more exaggerated with global exchanges.

According to on-chain analyst Willy Woo, this is “very macro bullish,” because “it’s a sign that new buyers are coming in to scoop coins off the markets and moving them into cold storage HODL, we are seeing new HODLers right now.”

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The analyst also points out how the 2017 bull market was fueled by the first scoop up of the coin at that time, which coincided with Wall Street Journal covering Bitcoin as a legitimate investment vehicle off the back of the Winklevoss ETF news. This time, the latest coins moving off the exchanges coincides with MicroStrategy buying Bitcoin.

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Author: AnTy

Pres. Trump’s Ex-Chief Of Staff Launches A Hedge Fund; Will It Invest in Cryptocurrencies?

Mick Mulvaney, who served as chief of staff under President Trump, has launched a hedge fund. From 2014 after Mulvaney has been acknowledged as a pro-Bitcoin crusader calling for crypto-friendly regulations in the country.

Mulvaney has partnered with ex Sterling Capital Management top manager Andrew Wessel to launch the new fund known as Exegis Capital. The new hedge fund was revealed at a podcast with S&P Global Market Intelligence.

During the Bitcoin Demo Day conference held in 2014, Mulvaney urged the government not to rush to regulate Bitcoin. At the time, Mulvaney stated that the king coin could easily become a crucial medium of trade as well as a vital means of payment. He explained:

“My interest in it is just to try and make sure that the government doesn’t act too soon in such a fashion that curbs the potential for Bitcoin. Because I see the potential for Bitcoin as a medium of trade and as a transactional tool, and I’d hate to see the government make decisions early that sort of retard its growth.”

From that day, Mulvaney has vigorously urged the government to regulate the crypto sector prudently. After Mulvaney was appointed as White House chief of staff, the crypto industry executives generally supported the move.

However, it remains unclear whether Mulvaney’s optimistic view of Bitcoin will lead the newly launched fund to be active within the crypto market.

In the last few weeks, the Bitcoin market has witnessed a surge in institutional investors. The recent entrant is Fidelity Investments, which is seeking approval from the U.S. Securities and Exchange Commission to launch a Bitcoin fund.

The surge in institutional players within the Bitcoin market has led to speculations on whether other hedge fund players are set to enter into the crypto space.

Although Mulvaney has long left his White House appointment, he still holds a special envoy post. Trump’s administration has maintained a negative stance on cryptos, and it is unlikely that Exegis Capital will immediately jump into the crypto market.

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Author: Joseph Kibe

Fintech Investment Firm, Ribbit Capital, Seeks $350M In ‘Blank Check’ Public Offering

Former Trump administration advisor, Sigal Mandelker, teams up with top profile investors in a $350 million public offering in Ribbit Capital, a SPAC firm that invests in fintech firms, including blockchain technology projects. The IPO will raise $350 million for a “blank check” company that invests in the unspecified business at the moment.

Ribbit LEAP, short for Ribbit Capital Long-Term Equity Acquisition Pool, is a unique purpose acquisition company (SPAC) looking to join the increasingly popular blank check model that allows the company to effect a merger, acquire assets, purchase stocks, or reorganize a similar business in a prospectus filed with the U.S. Securities Exchange Commission (SEC).

According to the prospectus, the SPAC has yet to define its planned businesses despite raising the multi-million IPO. Blank checks structures allow companies a vast ground for investment and business operations without any interference from shareholders, who are not allowed to vote on any decisions. The S-1 form reads:

“Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination.”

Ribbit LEAP is one of the first investors in the U.S’ largest crypto exchange, Coinbase, and over 75 other fintech startups, including Robinhood Markets, CreditKarma, MercadoLibre, Inc., Sea Limited, Next Insurance, and Zillow. Other top crypto companies in the Ribbit LEAP portfolio include U.K based Revolut, Xapo, and Chainalysis.

The prospectus further states that the company offered $402.5 million in class A shares at $10 per share to begin, but fees rose to approximately $52 million, bringing the total IPO to raise close to $350 million. Out of the total available shares, the SPAC has pledged a minimum of $100 million in a forward purchase commitment.

According to Reuters, the company is aiming to list the SPAC on the New York Stock Exchange in the coming days with JP Morgan, the only book-manager running the securities.

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Author: Lujan Odera

Hope for Bitcoin ETF Approval? SEC Chairman Jay Clayton’s Departing Will Be ‘Massive’ for Crypto

On late Friday night, US President Donald Trump said he will nominate the Securities and Exchange Commission (SEC) Chairman Jay Clayton to serve as the next United States Attorney for the Southern District of New York.

“For the past three years, Jay has been an extraordinarily successful SEC Chairman, overseeing efforts to modernize the regulation of the capital markets, protect Main Street investors, enhance American competitiveness, and address challenges ranging from cybersecurity issues to the COVID-19 pandemic,” said Attorney General William P. Barr

On Clayton’s nomination.

This appointment will be effective on July 3.

Clayton will be replacing Geoffrey Berman as the top federal prosecutor in Manhattan who said he will not resign from his position and will only step down when a successor is confirmed by the Senate.

Berman oversaw several prosecutions of Trump’s top allies including his personal lawyers.

This may, however, turn out to be a good thing for bitcoin.

“The SEC chair is one of the most important U.S. officials for crypto regulation. Chairman Clayton’s replacement will have a massive impact on the industry (for better or worse). Our chance at ETF approval & clarity on a wide range of issues for years to come hangs in the balance,” said Jake Chervinksy, general counsel at Compound Finance.

Under Clayton, all the Bitcoin ETF application has been rejected on the ground of market manipulation. Just this week, a new proposal from WisdomTree is filed for an exchange-traded fund (ETF) with 5% exposure to bitcoin.

A Bitcoin ETF is expected to protect retail investors from paying a drastic premium to get crypto exposure. Grayscale retail investors are currently paying a 20% premium on BTC and a whopping 750% premium on ETH products.

Moreover, it means investors won’t have to get a wallet or go through a miner. An ETF would broaden the scope of potential Bitcoin investors which could serve as a hedge during volatility in the equity market.

“It would broaden the breadth of investors in BTC. This is important because some investors view Bitcoin as a safe haven when equity markets become volatile and/or move into a bear market environment. A Bitcoin ETF would be an easy and inexpensive way to hedge various market conditions,” Richard Keary, the founder of Global ETF Advisors LLC, told OKEx.

Galaxy Digital CEO Mike Novogratz also shared a hope over a possible Bitcoin ETF approval in the future if we get a crypto-friendly chairman or chairwoman.

There is even a possibility that SEC commissioner Hester Peirce aka ‘Crypto Mom’ may also move up the ranks to fill the position. The moniker ‘Crypto Mom’ came after she dissented on the SEC’s decision to reject a Bitcoin ETF application.

Just this month, Peirce was tapped for a second term that will last through 2025. She has been one of the most prominent crypto advocates who proposed a safe harbor for crypto startups looking to issue tokens.

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Author: AnTy

Bitcoin Is ‘Trading’ Like a Risk-On Asset But Gold’s Also Feeling the Selling Pressure

  • Bitcoin, oil, overseas equities, Treasury yields plunging
  • US President Donald Trump promises fell short of what investors were hoping
  • Gold also feeling the pinch from the fall in financial markets

Bitcoin started the day at a deeply red note, tanking to $5,713, a level last seen in May 2019. Overall the crypto market lost more than $50 billion, as altcoins followed bitcoin down.

The rout deepened on Thursday for the stock market as well as S&P 500 opened the market at 6.6% losses and the Dow Jones Industrial Average plunged 1,700 points.

CME Group meanwhile is closing its Chicago trading floor on Friday “at the close of business,” as a precaution due to the coronavirus.

Coronavirus also led the National Basketball Association to suspend its season indefinitely after Utah Jazz players tested positive for the new virus. Academy Award-winning actor Tom Hanks and his wife Rita Wilson also tested positive for the coronavirus.

Investors’ expectations not met

From bitcoin, oil, overseas equities to Treasury yields everything plunged today after the World Health Organization declared Coronavirus a “pandemic”. Coronavirus (Covid-19) has infected 126,000 people globally while the US death toll was at 38 early Thursday with over 1,310 confirmed cases.

On Wednesday, US President Donald Trump restricted travel from Europe to the US for 30 days starting Friday. Trump pledged to provide financial aid and promised liquidity and capital but offered few details.

“Donald Trump’s public address fell short of what investors were hoping for,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Today, European Central Bank decided not to cut interest rates despite the market expectations for a 10 basis point cut to stimulate the euro economy amid fears that a recession is about to hit the region. Both the Bank of England and the Federal Reserve cut rates over the last week.

Though the rates weren’t cut, the central bank did expand its asset purchase program by 120 billion euros ($135 billion) and announced measures to support bank lending.

Investors looking to de-risk

Gold, on the other hand, rose on worries about the economic impact of the coronavirus. Spot gold rose 0.5% to $1,642.46 per ounce, but down from the 7-year high $1,702 hit on Monday.

However, on the flip side, traders are selling gold to fund margin calls which are capping the yellow metal’s gains. Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade said,

“Gold is now feeling the pinch from the fall in financial markets and travel ban. So, investors will keep money out of the markets for some time or book profits from the high levels, because of which we’ve seen some selling pressure in gold.”

Bitcoin meanwhile continues to follow the stock market which indicates the cryptocurrency is a risk-on asset.

“Bitcoin is trading like a risk-on asset. Not a safe haven, but the exact opposite,” said economist and trader Alex Kruger. However, the trader explained that the flagship cryptocurrency is trading like a risk-on asset and not being one as “investors are now looking to de-risk.”

However, Gabor Gurbacs, a digital asset strategist at VanEck maintains that both bitcoin and bullion are “safe-haven competitors against negative yielding government debt.”

The recently turned negative-yielding government bonds are relatively new, and “the next decade may redefine fundamental investment axioms about safe-haven assets.”

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Author: AnTy

Will Trump’s Stimulus Package Include BTC Investments As Part Of The Tax-Incentives?

One of the senior officials for President Donald Trump came with the proposal of a new economic package that stimulates people to make tax-free investments, Bitcoin (BTC) included.

It seems that the President’s administration is seriously taking new tax incentives into consideration, incentives meant to give the stock market a boost by allowing Americans to buy shares, stocks and cryptocurrencies like Bitcoin.

Tax-Free Household Income for Employees

According to what a number of sources have told on Friday to CNBC, the new proposal wants to make a part of the household income tax-free so that people invest outside a traditional 401 (k) plan that allows employees to divert a sum from their salary towards long-term investments. Larry Kudlow, President Trump’s senior adviser and the National Economic Council director, said the approach is focused on developing tax-free savings accounts, so the capital gains wouldn’t be taxed.

The Tax-Free Proposal Would Benefit Crypto Investors

Many who have invested in cryptocurrencies have been worried about tax liability, so the investment plan that wants to make a part of the income tax-free would greatly help them. As what sources told CNBC, in a household that gets $200,000 as income per year, $10,000 would be invested in the tax-free scheme. The proposals to cut taxes are to be formally announced in September and regarded as a way for President Trump to stand out from the crowd, especially when compared with his Democratic rivals.

Americans Are Investing in the Stock Market More than Ever

The White House has these policies through which it wants to accelerate the rise of the owning stocks trend. Last year, 55% of all Americans, which is a record percentage and the greatest number since the Great Depression, were playing the stock market. However, since the US House of Representatives is currently in the Democrats’ hands, the Trump administration’s tax legislation is very likely not to pass, at least not in the near future.

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Author: Oana Ularu

Bakkt CEO Expected to Be Appointed to Senate, But President Donald Trump Isn’t Too Happy

  • Bakkt is a platform developed by the Intercontinental Exchange.
  • President Donald Trump is wants to appoint U.S. Representative Doug Collins instead.

Kelly Loeffler is the CEO of Bakkt, the institutional Bitcoin futures platform launched by the Intercontinental Exchange. As Georgia Governor Brian Kemp aims to appeal to Republican women, reports indicate that he is expected to appoint Loeffler to a seat in the Senate next week. If she is nominated, Loeffler will make history for the state, becoming only the second woman in Georgia to ever serve with the US Senate. Local news outlet AJC reported on November 29th that it is even possible for Loeffler to finance GOP activities with her own funds alone, which could mean that some fundraising records will be broken.

Working to get the Republican vote in her favor, Loeffler expressed that strengthening the border is a goal of hers, as well as shutting down the trafficking of humans and drugs. Loeffler wants to see healthcare costs lowered for the public, and she has shown the desire to protect the national interests of citizens. In her own statement, Loeffler added,

“If chosen, I will stand with President Trump, Senator David Perdue, and you to Keep America Great.”

Presently, the seat that Loeffler would occupy is possessed by Johnny Isakson, who is facing health problems that are forcing him to step down. Officials from the Republican Party, though unnamed, stated that a public announcement on Loeffler’s appointment is expected from Brian Kemp at an upcoming press conference, planned for next week.

Despite Kemp’s apparent intentions, Trump and other party leaders reportedly are set on appointing U.S. Representative Doug Collins, rather the Loeffler. Collins has strongly supported Trump, as well as anti-abortion efforts and gun rights, which have been many of the deciding factors for Republican leaders getting behind the representative.

Loeffler, as the president and many loyal followers, see her, is too moderate. Though Kemp recently met with both Loeffler and the president last week for approval, he was unsuccessful in his efforts.

Even with this setback, Bakkt recently set a new record for daily volume of their Bitcoin futures contracts at $42.5 million on November 28th.

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Author: Krystle M