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Securities and Exchange Commission [SEC]

Gary Gensler’s Crypto Warning: 90 Years of Rules Apply

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Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), issued a stern warning to crypto exchanges. He emphasized that they must follow the rules set in place. His comments came during an interview with CNBC on Wednesday, where Gensler made clear that protecting the public from bad actors remains a top priority.

“This is a field filled with fraudsters and scammers,” Gensler said. He pointed to some of the biggest names in crypto now facing legal consequences. Former FTX CEO Sam Bankman-Fried, ex-Binance chief Changpeng Zhao, and Terra’s Do Kwon are either in jail or awaiting extradition. Gensler used their cases as examples of why stronger oversight is needed.

The SEC is currently locked in legal battles with major exchanges like Coinbase, Kraken, and Binance. These companies have pushed for more regulatory clarity, but Gensler argues that the rules are already clear. He believes that securities laws, which have worked for nearly 90 years, apply to crypto just the same. “If you store something on an accounting ledger…investors still need basic protections,” Gensler said.

Industry Claims Crypto Growth Stifled by Decades-Old Laws

Many in the crypto industry disagree. They argue that innovation is being stifled by outdated regulations. Still, Gensler remains firm, stating that the current framework is sufficient.

The SEC’s actions have drawn criticism from both sides of the political aisle. However, Gensler has found support from prominent figures like Senator Elizabeth Warren, who is known for her tough stance on Wall Street and crypto. Next week, Gensler and other SEC commissioners are expected to face tough questions from Congress.

Metrics highlight the growing tension. Coinbase saw a 10% drop in trading volume after news of the SEC’s lawsuit. Binance, meanwhile, recorded a 15% decline in user activity. Kraken faces mounting legal fees, reportedly exceeding $50 million. These numbers reflect the uncertainty hanging over the crypto market as regulators tighten their grip.

Gensler’s message is clear: crypto exchanges are not above the law, and the SEC is ready for battle.

Ripple Faces 2026 Appeal Delay, Legal Expert Reassures Investors

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Attorney Fred Rispoli has offered insight into the ongoing Ripple case, easing concerns about a potential SEC appeal. According to Rispoli, even if the regulatory body does appeal, a ruling likely won’t be reached before 2026. This long delay offers breathing room for Ripple and XRP to continue thriving.

Rispoli also pointed out that the SEC’s broader crackdown on exchanges and tokens has reduced the pressure on Ripple. He emphasized, “If Ripple and XRP don’t make it now, it’s not because of the SEC’s case.” His message is clear stating that the SEC’s pursuit of other crypto assets has diverted attention away from the firm.

The favorable court ruling for Ripple has given institutional partners confidence in using XRP. Rispoli notes that this ruling won’t change, at least until 2026, offering a sense of security for the company’s growth. He also predicts that federal legislation could outpace the SEC lawsuit, potentially reshaping the regulatory landscape.

Ripple’s Recent Moves

Ripple has taken proactive steps, requesting the monetary portion of the court’s final judgment in anticipation of the SEC’s potential appeal. The company’s leadership remains strategic, seeking to protect their victory while awaiting the SEC’s next move.

Jeremy Hogan, a partner at Hogan & Hogan, adds another layer to the discussion. Hogan believes the SEC has not yet decided whether to appeal, but time is running out. He states that if the SEC had already made a decision, they would have filed by now. Hogan gave a 60% chance of an appeal, noting that the SEC “doesn’t operate like a normal litigant.”

Hogan also warned that an appeal could backfire on the SEC. But with the SEC’s unpredictable behavior, the crypto community waits for the next move.

With XRP holding strong at $0.50 and Ripple ranking within the top 10 cryptocurrencies, its market cap remains around $26 billion. The future looks promising for the firm, with institutional support and the timeline of the appeal extending into the distant horizon.

Ethereum ETF Approval: SEC’s 2nd Massive Delay Disrupts Market

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Issuers of prospective spot Ethereum exchange-traded funds (ETFs) are still in limbo, waiting for the Securities and Exchange Commission (SEC) to provide feedback on their S-1 filings. According to two sources, these drafts were initially submitted on May 31, with the issuers anticipating comments from the SEC by June 7. Yet, at least two issuers have reported receiving no feedback as of now. One source mentioned that they now expect the SEC’s comments to arrive later this week.

This delay follows a statement by SEC Chair Gary Gensler on CNBC, where he indicated that the approval process for the S-1 forms would “take some time.” The uncertainty over the timeline remains, with one source previously suggesting that the S-1 forms might need at least two more rounds of draft filings before being ready for final approval.

Ethereum ETF Launching Process

The path to launching these spot Ethereum ETFs involves a two-step process. The initial step was the approval of the 19b-4 forms, which was completed on May 23. The current focus is on the S-1 filings, which, once approved, will pave the way for the ETFs to start trading.

The draft filings have revealed some intriguing details about the upcoming products. Notably, BlackRock is seeding its ETF with $10 million, indicating strong initial capital backing. Meanwhile, Franklin Templeton has outlined a competitive fee structure, planning to charge a 0.19% fee.

As the market eagerly awaits the launch of these spot Ethereum ETFs, a significant question lingers: Can they replicate the success of the spot Bitcoin ETFs? Bitfinex’s Head of Derivatives, Jag Kooner, offers a tempered outlook, estimating that the Ethereum ETFs will attract around 10-20% of the inflows that have been directed towards their Bitcoin counterparts.

The potential launch of these Ethereum ETFs marks a significant milestone for the cryptocurrency market, offering investors a new avenue to gain exposure to Ethereum. However, the timeline remains uncertain as issuers and investors alike wait for the SEC’s next move. The ongoing wait underscores the regulatory complexities involved in bringing innovative financial products to market, reflecting the cautious approach of the SEC in navigating the evolving landscape of digital assets.

Consensys Hails Ethereum ETF, SEC’s Surprising Good 180-Degree

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In a significant development for the cryptocurrency market, the U.S. Securities and Exchange Commission (SEC) has approved the first Ethereum (ETH) Spot ETFs, marking a pivotal shift in regulatory stance. Consensys, a leading blockchain technology company, hails this decision as a critical step forward, although it underscores ongoing regulatory inconsistencies.

Consensys CEO Joe Lubin remarked, “Today’s approval signals that the SEC views ETH as a commodity and not a security, contradicting their previous position. This is a vital clarification for the industry and a victory for the bipartisan Congressional effort pushing for clear and sensible regulation.”

Despite this positive development, Consensys remains cautious. The approval, which came at the eleventh hour, exemplifies what they describe as the SEC’s ad hoc and often inconsistent approach to digital assets. This regulatory uncertainty, according to Consensys, stifles innovation and creates an uneven playing field for market participants.

Ethereum Lawsuit Challenges SEC’s Regulatory Overreach

Consensys has recently filed a lawsuit against the SEC, challenging its authority to regulate Ethereum as a security. The company argues that Ethereum, a decentralized platform, should not fall under SEC jurisdiction. “The SEC’s attempt to regulate Ethereum and similar blockchain technologies as securities is not only overreach but jeopardizes the U.S.’s leadership in technological innovation,” said Lubin.

The implications of the SEC’s overreach, Consensys warns, extend far beyond the cryptocurrency market. It threatens the broader blockchain ecosystem, including various non-financial applications in sectors like healthcare, energy, and transportation. Such regulatory moves could undermine the U.S.’s ability to compete globally in the burgeoning blockchain industry, potentially leading to significant economic and job losses.

Consensys emphasizes the importance of Ethereum as a transformative technology that democratizes access to financial services and shifts control of digital data and identity back to users. They advocate for a regulatory framework that fosters innovation while ensuring market integrity.

Headquartered in Fort Worth, Texas, Consensys remains committed to its mission of empowering people and communities through blockchain technologies. The company views today’s SEC approval as a step towards preserving access to the Ethereum blockchain and promoting permissionless innovation.

As the regulatory landscape for digital assets evolves, Consensys continues to fight for clarity and fairness, ensuring that the future of blockchain technology in the U.S. remains bright and innovative.

Surge in Ethereum ETFs: 5 Issuers File Amid Rapid Developments

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On Monday, Bloomberg analyst James Seyffart provided an update on the anticipated launch of spot Ethereum ETFs, suggesting that their listing might still be weeks, or even longer, away despite recent developments. This announcement came amidst a flurry of activity from at least five potential Ethereum ETF issuers who have amended their filings.

Among the issuers who filed their amended 19b-4 forms through the Chicago Board Options Exchange (CBOE) are Fidelity, VanEck, Invesco/Galaxy, Ark/21Shares, and Franklin. The primary change in these amendments was the removal of staking-related content, clearly stating that the fund’s Ethereum (ETH) cannot be staked by anyone.

Seyffart took to Twitter to highlight the significance of these filings, stating,

“It’s happening. We have at least 5 of the potential Ethereum ETF issuers that have submitted their Amended 19b-4’s in the last 25 min. Fidelity, VanEck, Invesco/Galaxy, Ark/21Shares, & Franklin all submitted via CBOE.”

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Despite this progress, Seyffart cautioned that the actual launch of these ETFs could still be a considerable time away. He elaborated,

“Still a potentially long way from a launch. But these filings prove that all of the rumors and speculation and chatter have been accurate. Need to actually see SEC approval orders on all the 19b-4s AND THEN we need to see S-1 approvals. Could be weeks or more before ETFs launch.”

The removal of the staking language was the only substantial change noted in the revised filings. Seyffart remarked,

“This is the only meaningful & substantial change that I can find? Removing the staking language and adding very clear language that the Fund’s ETH cannot be staked by anyone.”

Despite these updates, Seyffart estimated the approval odds at 75%, though he acknowledged the unpredictable nature of the SEC’s decision-making process.

Ethereum ETFs Face Lengthy SEC Review Process

Adding to the complexity, Scott Johnsson of Van Buren Capital highlighted the extensive review period typically undertaken by the SEC. He pointed out that the SEC’s review of Bitcoin spot and futures S-1 forms took several months, suggesting a similar timeline could apply to Ethereum ETFs. Johnsson explained,

“SEC spent nearly 4 months reviewing and iterating BTC spot S-1s and 5 months reviewing BTC futures S-1s. If Division of Corporation Finance indeed was told about this potential approval yesterday, then they’re likely just getting started.”

In summary, while the recent filings mark a significant step forward, the actual launch of Ethereum ETFs remains uncertain and potentially weeks away.

Ethereum Approval: SEC’s Explosive Verdict Expected on May 23 Spurs Optimism

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The cryptocurrency world is on edge as the U.S. Securities and Exchange Commission (SEC) is expected to make pivotal decisions regarding spot Ethereum (ETH) exchange-traded funds (ETFs) this week. The regulatory body will either approve or reject several high-profile applications, starting with VanEck’s proposal on May 23, followed by the joint application from ARK Invest, led by Cathie Wood, and 21Shares on May 24.

The roster of applicants hoping to launch a spot ETH ETF includes financial giants such as BlackRock, Fidelity, Bitwise, Galaxy Digital, Franklin Templeton, and Hashdex. Despite the enthusiasm from these prominent players, industry insiders widely anticipate that the SEC will reject these applications. The primary reason cited is the apparent lack of meaningful dialogue between the SEC and the ETF issuers.

Experts Question SEC’s Stance on Ethereum Data Requirements

Industry experts are keenly interested in the rationale the SEC will provide for any rejections. Bitwise’s Chief Investment Officer, Matt Hougan, speculates that the SEC might point to insufficient data as a key reason. On the other hand, legal analysts like Scott Johnsson suggest the SEC could classify the underlying asset—Ethereum itself—as an unregistered security.

These decisions come at a crucial time for Ethereum. On May 16, the flagship altcoin hit a new yearly low against Bitcoin, trading at 0.044 BTC. Since then, ETH has rebounded by approximately 6%, yet bearish sentiment prevails due to the looming ETF verdict. As of now, Ethereum is trading at $3,104, according to CoinGecko data.

The implications of the SEC’s decisions extend beyond just the applicants. Approval of a spot Ethereum ETF would mark a significant milestone for the cryptocurrency industry, potentially leading to increased institutional investment and greater mainstream acceptance. Conversely, another round of rejections could stymie market sentiment and lead to further regulatory scrutiny.

For now, all eyes are on the SEC’s upcoming announcements. Whether the agency opts to approve or reject these spot Ethereum ETFs, the decisions will undeniably influence the future trajectory of Ethereum and the broader cryptocurrency market.

Bitcoin ETFs Limited to Elite Investors in Thailand

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Bitcoin Exchange-Traded Funds (ETFs) take center stage as Thailand’s Securities and Exchange Commission (SEC) approves private funds. This decision marks a pivotal moment in the country’s financial landscape, but with a catch—only institutional investors and ultra-high-net-worth individuals will have access to these funds.

The announcement, made by SEC secretary-general Pornanong Budsaratragoon, follows the US SEC’s approval of trading spot Bitcoin ETFs, reclassifying them as securities assets. Consequently, Thai securities firms can now engage in investments in these ETFs, albeit with limitations.

The rationale behind restricting access to institutional and high-net-worth investors stems from the inherent risk associated with digital assets, particularly Bitcoin. Ms. Pornanong highlighted the need for cautious consideration due to this risk factor, emphasizing the importance of aligning with existing regulations while venturing into this burgeoning sector.

Riding the Bitcoin Wave

As Bitcoin prices surge to record highs, surpassing the $71,500 mark per coin, the timing of the SEC’s approval couldn’t be more opportune. This move opens avenues for Thai investors to capitalize on the cryptocurrency’s momentum while ensuring regulatory compliance and investor protection.

Moreover, alongside facilitating Bitcoin investments, the SEC has also approved measures proposed by the Stock Exchange of Thailand (SET) aimed at bolstering market supervision and enhancing investor confidence. These measures encompass tighter oversight on short-selling transactions, naked shorting, program trading, and high-frequency trading, all geared towards curbing stock price volatility.

The SEC’s proactive stance not only reflects Thailand’s commitment to fostering innovation in its financial markets but also underscores its dedication to upholding market integrity and investor interests. By striking a balance between facilitating access to emerging asset classes like Bitcoin and implementing robust regulatory frameworks, Thailand aims to position itself as a progressive hub for financial innovation while safeguarding the stability of its markets.

In essence, the SEC’s approval signifies a significant milestone in Thailand’s journey towards embracing digital assets, offering a glimpse into the future of finance while ensuring responsible and regulated investment practices.

Ethereum ETF Approval Odds Plummet to 35% Amid SEC Silence

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The anticipation surrounding the approval of Ethereum exchange-traded funds (ETFs) is intensifying as the Securities and Exchange Commission (SEC) remains notably silent on the matter, leaving prospective fund issuers in limbo. According to senior Bloomberg ETF analyst Eric Balchunas, the prospects for Ether ETF approval are dwindling by the day, with chances now pegged at a mere 35%.

Balchunas expressed concerns over the lack of communication from the SEC to ETF issuers, citing it as a significant red flag just 73 days shy of the final deadline. He emphasized that the SEC’s feedback is crucial for issuers to address any concerns and navigate through the approval process effectively.

Moreover, Balchunas hinted at a deliberate silence from the SEC, speculating that SEC Chair Gary Gensler’s stance on Ethereum as a security might influence the decision-making process. Gensler’s previous scrutiny and political backlash surrounding Bitcoin ETFs and Grayscale’s SEC court loss in August 2023 could further complicate the approval of Ethereum-based products.

Ethereum’s Regulatory Outlook

The analyst’s observations suggest a departure from the dynamics observed during the Bitcoin ETF race, creating an atmosphere of uncertainty and apprehension among market participants. Despite industry optimism stemming from discussions between crypto giants Coinbase, Grayscale, and SEC officials, doubts loom large, fueled by experts’ cautious assessments.

Matt Corva, General Counsel at Consensys, even suggested that an Ethereum ETF denial could serve as a positive development in the long run, potentially eliminating regulatory obstacles for other cryptocurrencies.

Balchunas and other industry insiders also pointed to significant upcoming events, such as the U.S. Presidential election, as potential catalysts for regulatory shifts. The outcome of the election could reshape the regulatory landscape and influence the SEC’s approach towards Ethereum ETFs.

Nevertheless, amidst the uncertainty, Balchunas remains optimistic about the eventual approval of a spot Ether ETF. He believes it’s not a question of if, but when, underscoring the evolving nature of regulatory processes in the crypto sphere.

As stakeholders eagerly await further developments, the Ethereum community remains vigilant, recognizing that regulatory clarity is crucial for broader market participation and the continued maturation of the crypto ecosystem.

Ethereum ETF Saga: SEC’s 2nd Delay Spells Frustration for Investors

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The Securities and Exchange Commission’s repeated delays in deciding on spot Ethereum ETFs have left investors in limbo. BlackRock’s proposed iShares Ethereum Trust faces another setback as the SEC extends its deadline yet again. This second delay, after the initial postponement in November, underscores the regulatory uncertainty surrounding cryptocurrency-based investment products.

The SEC’s reluctance to approve Ethereum ETFs isn’t limited to BlackRock; similar applications from industry giants like Fidelity, Invesco, and Galaxy Digital are also in limbo. Analysts speculate that these delays could persist until May 23, the final deadline for VanEck and Ark Invest’s applications. Such delays reflect the cautious approach regulators are taking toward novel investment vehicles tied to digital assets.

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Source: James Seyffart

Ethereum as a Commodity

Earlier in February, it came to light that Coinbase stepped up to support Grayscale’s Ethereum spot ETF listing application, responding to the SEC’s call with a comprehensive 27-page document. The aim is to transition the Grayscale ETH Trust into a Spot ETF, highlighting ETH as a commodity rather than a security, aligning with regulatory requirements.

Paul Grewal, Coinbase’s Chief Legal Officer, outlined the case through his Twitter handle, citing 96 sources. The document delves into legal, technical, and economic aspects, emphasizing ETH’s non-security status and its robust Proof of Stake (PoS) governance model. This model ensures ownership decentralization, consensus, liquidity, and governance, bolstering ETH’s resilience against fraud or manipulation risks.

Economic analysis within the letter parallels ETH with BTC, demonstrating Ethereum’s adherence to the SEC’s ETP approval standards. Coinbase’s proactive stance reflects its commitment to fostering innovation and transparency in the cryptocurrency realm. By engaging in informed regulatory dialogue and research, Coinbase aims to navigate the evolving regulatory landscape while advocating for ETH’s recognition as a legitimate asset class.

Despite the growing interest in ETH and other cryptocurrencies, regulatory hurdles continue to impede their mainstream adoption. Investors eagerly await the SEC’s decision, hoping for clarity and a potential avenue to gain exposure to the burgeoning Ethereum ecosystem. Until then, the fate of Ethereum ETFs remains uncertain, leaving investors to navigate an uncertain landscape in the digital asset market.

Terraform’s Aggressive Legal Standoff: SEC’s $166M Allegations Not Sturdy Enough

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Terraform Labs, embroiled in a legal battle with the U.S. Securities and Exchange Commission (SEC), asserts its right to retain Dentons U.S. LLC as its counsel amidst objections from the regulatory body. The dispute centers on Terraform’s payment of $166 million to legal representatives, with the SEC alleging dubious fund transfers to evade potential liabilities.

In response, Terraform filed a robust defense in a Delaware court, challenging the SEC’s objections as baseless and accusing the regulatory body of overreach. The company emphasizes the necessity of legal representation to navigate both the SEC litigation and a concurrent Department of Justice investigation.

Highlighting what it perceives as government interference, the firm contends that the SEC’s objections aim to divert attention from the impending trial. Furthermore, the company refutes the SEC’s allegations, asserting erroneous legal interpretations and false claims.

As the legal saga unfolds, Terraform’s battle against the SEC underscores the complexities and tensions inherent in corporate bankruptcy proceedings. The outcome of this confrontation will not only shape the firm’s future but also set precedents in regulatory oversight and corporate governance.

SEC Concerns Over Terraform’s Finances

The U.S. Securities and Exchange Commission (SEC) has taken a firm stance against Terraform Labs’ retention of Dentons U.S. LLC as its special counsel, citing concerns over dubious financial transactions. In a filing submitted to the Delaware bankruptcy court, the SEC raised alarm over the firm’s transfer of a substantial $166 million to Dentons, labeling the move as “suspicious.”

Of particular concern to the SEC is the transfer of $122 million within 90 days before Terraform’s bankruptcy filing, which the agency alleges was intended to deplete the company’s assets and hinder potential payouts resulting from SEC enforcement actions. The SEC further accused Terraform of utilizing an “opaque slush fund” within Dentons to finance legal battles against the regulatory body, branding it a “war chest” for ongoing disputes.

Despite a significant portion of the funds already being exhausted on litigation expenses, $81 million remains in the Dentons Advance Payment Retainer, according to SEC filings. The agency contends that Dentons should not continue representing Terraform unless the remaining funds are returned.

Moreover, the SEC highlighted the purported misuse of funds, alleging that Denton’s retainer was utilized for legal fees related to Terra’s former CEO’s unrelated criminal actions in Montenegro. Requesting court intervention, the SEC seeks the appointment of a fee examiner to investigate the suspicious timing and amount of the retainer payment, signaling a deepening rift between Terraform Labs and regulatory authorities.