Bitcoin ETFs Hit Another Speedbump | SEC Targets Nearly 70 Cryptos

SEC CALLING BITCOIN ETF FILINGS INADEQUATE IS NOT A STOP SIGN

Feedback from the Securities and Exchange Commission (SEC) that bitcoin spot exchange-traded fund (ETF) applications filed by Nasdaq and Cboe on behalf of investment giants BlackRock and Fidelity as inadequate is “not an indication that the product is not viable,” a person familiar with the applications, who requested anonymity, told Forbes.

Although the agency has allowed numerous ETFs based on bitcoin futures to trade on regulated exchanges, it has denied every one of the dozens of spot applications that have been submitted to date. It often cites a belief that the underlying bitcoin spot market is subject to fraud and manipulation.

SEC SIGNALS THAT MOST TOKENS ARE SECURITIES

In the last few months, the U.S. Securities and Exchange Commission has labeled dozens of cryptocurrencies as securities but provided very little explanation for how it came to that conclusion. There is no question that these and many other cryptos are being purchased as investments, but the SEC is alleging that they also fall within the legal definition of a security. This would require the issuers to register the tokens with the agency or meet the requirements for an exemption.

The clampdown has been costly to the digital-assets industry. The 19 cryptocurrencies named in the SEC’s cases against Binance and Coinbase have lost a combined $5 billion in value since the filing of the complaints in early June. With the addition of tokens named in its lawsuits against the two prominent crypto exchanges, the number of assets the agency deems securities is at least 65. These include major cryptocurrencies such as bnb, busd, cardano, solana and matic and collectively account for more than a $100 billion in market value—a sizable chunk of the $1.2 trillion industry. Some believe stablecoins and DeFi could be next.

Source: Forbes Digital Assets. Prices as of 12:15 p.m. on June 30, 2023.

HITS KEEP COMING FOR BINANCE

The world’s largest crypto exchange continues to face setbacks following the SEC lawsuit:

German regulators have reportedly told Binance they will not grant it a cryptocurrency custody license

Belgium’s securities regulator ordered the company to cease offering crypto trades in the country

Binance has also pulled its license application in Austria

Paysafe Payment Solutions, Binance's European banking partner, said it will stop supporting the crypto exchange after September 25

SPAIN’S LARGEST BANK EDUCATES INVESTORS ABOUT BITCOIN

Santander has recently announced the start of a Digital Assets 101 series for customers and prospective investors. Bitcoin advocates were impressed with the bank’s writing, latching onto Santander’s introduction to Bitcoin’s Lightning Network as an example. Lighting is a layer built on top of the Bitcoin Network that facilitates instant and cheap payments using the cryptocurrency.

ELSEWHERE

FTX Begins Talks on Reboot Amid Regulatory Crackdown On Crypto Exchanges [The Wall Street Journal]

Coinbase Files Motion To Dismiss SEC’s Suit, Branding It ‘An Extraordinary Abuse Of Process’ [The Block]

Three Arrows Liquidators Seek $1.3 Billion From Fund’s Founders [Bloomberg]