Showing posts with label sec. Show all posts
Showing posts with label sec. Show all posts

Ethereum ETFs Next to Be Approved?

ETH ETF

As BTC ETF anticipation gripped the market last year, traders have been looking at ether as the next likely candidate to get spot ETF approval in the U.S.

Will the SEC Approve an ETH ETF? Let's look at the arguments both ways...

Why Some Believe the SEC will DENY The Applications...

JPMorgan's analysts are skeptical. “While we are sympathetic... we are skeptical that the SEC will classify ether as a commodity as soon as May” lead analyst Nikolaos Panigirtzoglou said in a note to clients on Jan. 18, adding that the chances of approval of a spot ether ETF by May this year is “not higher than 50%.”

The main reason - Ethereum’s transition from the proof-of-work to proof-of-stake consensus mechanism in 2022 and the negative impact this has had on decentralization.  

Ether now looks similar to altcoins the SEC has classified as securities.

Why Some Think an ETH ETF Will Soon be APPROVED...

The SEC recently sued virtually every major US crypto exchange for selling unlicensed securities, providing all with a list of which coins they believe violate regulations - Ethereum was missing from all of them. 

Another potentially positive sign is the approval of ether futures-based ETFs in September last year, which implies the SEC has officially deemed Ethereum a commodity.

Note that the ETH Futures ETF's that were approved last year are generally used for speculative or hedging purposes - with a 'futures' ETF no party involved needs to actually purchase any crypto. Investors instead buy contracts where they attempt to guess what the price will be on preset dates the contract expires. A true ETF, like what was just approved for bitcoin, requires the company selling shares of the ETF it to truly own the coins the ETF represents, and the only price that matters is the actual price it is trading at.

What You Can Do Now...

Both sides have some very valid points/concerns, so what does that mean? In my opinion, the main takeaway is that there are legitimate reasons to speculate ETH ETF's may be approved.

Sure, same goes for it being denied, however, current ETH holders did not invest because they believed an ETF was eventually coming, so the potential of one being denied won't cause current investors to sell. However, the potential an ETF being approved brings in new buyers and causes existing investors to buy more.

This scenario where existing investors see no reason to sell if the ETF news is bad, while the potential for good news becomes a reason for people to buy, can only result in gains as anticipation builds. Of course, a non-ETF related story that overshadows everything could happen as well - but unless it does, there may be a great short-term opportunity regardless of the final outcome.

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Author: Justin Derbek
New York News Desk
Global Crypto Press Association / Breaking Crypto News

Ripple Team MOCKS The SEC Following Another Legal Win "This is not a settlement - This is a surrender by the SEC"...

SEC vs Ripple

The SEC's legal battle against Ripple involved coming after them on 2 fronts - first was their claim the company illegally profited by selling an unlicensed security (XRP Tokens) violating the Securities Act of 1933. The second targeted the company's co-founders Christian Larsen and Bradley Garlinghouse, saying they were the ones who made the decisions at the company, so they were charged with "aiding and abettting”.

Today, the SEC's targeting of Larsen and Garlinghouse has officially come to an end as District Judge Analisa Torres announced that the US securities regulator notified the court that it would not continue in the case and has issued a “voluntary dismissal”.

Ripple's lead lawyer Stuart Alderoty shared the news first saying;

"The SEC made a serious mistake going after Brad & Chris personally – and now, they’ve capitulated, dismissing all charges against our executives. This is not a settlement. This is a surrender by the SEC.

That’s 3 consecutive wins for Ripple including the July 13 decision ruling that as a matter of law XRP is NOT a security, the Oct 3 decision denying the SEC’s bid for an interlocutory appeal, and now this." on X.

Current CEO Brad Garlinghouse responded saying;

"In all seriousness, Chris and I (in a case involving no claims of fraud or misrepresentations) were targeted by the SEC in a ruthless attempt to personally ruin us and the company so many have worked hard to build for over a decade.

The SEC repeatedly kept its eye off the ball while secretly meeting with the likes of SBF – failing again and again to protect US consumers & businesses. How many millions of taxpayer $ were wasted?! Feels good to finally be vindicated."

FTX a Massive Blemish On An Already Troubled SEC...

The SEC's 'crack down' on crypto has targeted companies like Coinbase, Binance and Ripple - but where are the investors accusing these companies of wrongdoing? Who did Coinbase, Binance, or Ripple scam? You would think reddit and other crypto related forums would be full of these complaints, but when searching for terms that should lead to them, nothing is found.

While the SEC was busy targeting these companies, FTX was actively misusing users funds and behaving suspiciously fearless of being caught.  Ironically, it was one of the people under SEC investigation who brought the FTX issue to light - Binance CEO 'CZ'.

This means if CZ had not exposed Sam Bankman-Fried, FTX would still be freely spending their users funds, while their top 2 competitors faced SEC harassment - suspicious to say the least.

It makes you wonder - could SEC deliberately be hiding corruption by appearing ignorant and disorganized? 

The Strangest Contradiction...

The most alarming and confusing factor in the SEC's current actions has to be the fact that the SEC evaluated Coinbase just a couple years ago, when they approved the company to go public and sale shares of their stock.  This process involves a deep evaluation of the business, and obviously, if a business's main source of income was unlawful, they would not have been approved.

But they were approved. Coinbase even passed a phase where the SEC asked questions about any parts of the business they wanted clarification on, Coinbase answered them, and they were approved. 

Nothing has changed since Coinbase was worthy of SEC approval. There's no new leadership at the SEC since they deemed Coinbase's business legitimate just two years ago, Coinbase isn't offering anything now that they were not then. But seemingly out of nowhere, suddenly Coinbase is operating outside of the law. 

So SEC saying;  just because they approved a company seeking approval to go public and sell share shares on the stock market, it does not mean that company is legitimate - no one has been able to make sense of why the SEC is now undermining themselves in such an extreme way.

Next For Ripple...

While the charges against company founders are dropped, the case against the company itself is still considered ongoing.  While the SEC lost on their first attempt, the last statement from them was that they are appealing that decision.

But some say dropping the charges against the founders is a sign they may do the same with the charges against the company - because if the company is guilty, those running it would be as well - it would be odd to drop one and not the other.

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Author: Mark Pippen
London Newsroom
GlobalCryptoPress | Breaking Crypto News


The TRUTH About The SEC's Lawsuit Against Binance - Why The SEC Has NOT Been Telling The FULL Story...


SEC sues Binance

Just a month ago, the scent of a showdown was in the air when Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), expressed his distaste for Binance during an interrogation by Congress. Labeling the cryptocurrency exchange as a deceiver of customers and a circumventor of U.S. securities laws, Gensler signaled a storm brewing on the horizon.

Fast forward to today, Binance finds itself squarely in the SEC's sights. A formal lawsuit against Binance, its CEO, and associated parties has been filed, alleging severe breaches of federal securities laws. According to the SEC, these supposed violations jeopardized investors' assets and enabled the accused to unlawfully accumulate profits totaling billions.

Before diving into the lawsuit, it's important to understand how things got here...

There are some vital details that set the stage for the ensuing legal battle. This is not your regular SEC operation.

- SEC Chairman Gary Gensler is one of the most contentious leaders to date.

His leadership style significantly deviates from his predecessors, instigating a tense atmosphere between the SEC and regulated firms.

Formerly, the SEC used to handle compliance issues in a manner that fostered dialogue between enterprises and regulators. However, attempts to uphold this tradition of open communication under Gensler's leadership were met with silence. A notable point of concern is Gensler's often refusal to respond to inquiries, even when he is the sole authority capable of answering.

His silence speaks volumes when firms, after being overlooked, find themselves on the receiving end of an SEC lawsuit. "Leveraging enforcement actions to interpret law in a burgeoning industry is neither an effective nor equitable regulatory approach," argues a congressional representative.

SEC Chair Gary Gensler takes questions from Congress.

- Under Gensler we have witnessed a large number of disgruntled employees leaving the SEC, and unhappy businesses leaving the country...

Gensler's management style has been controversial, eliciting criticism from within the SEC. Commissioner Hester Pierce described his leadership as 'lethargic,' critiquing the reliance on enforcement actions for legislative interpretation in an emerging industry as inefficient and unfair.

- The most concerning illustration of the SEC's broken leadership: its interaction with Coinbase.

Despite obtaining SEC approval and listing on the stock exchange following detailed disclosure of operations, Coinbase, without any operational changes, received a Wells Notice stating an impending lawsuit for potential violations.

Essentially, after SEC approval and US investors buying hundreds of millions of dollars of coinbase stock, that stock is now at risk of the agency that approved it, now out to crash it - all with no changes in business operations since it was approved. 

*Update* - One day after this article was published the 'impending lawsuit' referenced above was executed.

- Criticized for Missing in Action When the SEC was Actually Needed - FTX Debacle Occurred on Gensler's Watch.

While firms seeking guidance were ignored, then slapped with lawsuits for violating undisclosed rules, FTX, under Gensler's supervision, ascended to be the #2 global exchange free of any interference. Ironically, the Binance CEO, now facing a lawsuit, exposed FTX's underlying fraud.

The SEC nowhere to be found as users traded assets that were non-existent or misplaced due to FTX's deficient and fraudulent accounting.

- These are not criminal charges.

The lawsuit seeks financial penalties for regulation violations. No criminal incarceration can result from the legal actions taken thus far.

- A recurring name you will see in the charges 'BAM Trading'.

Listed as the 'owner' of Binance.us, BAM Trading was purportedly created to comply with U.S. laws. However, the SEC alleges that Binance.com CEO CZ controls both Binance.com and Binance.us, implying that BAM Trading is merely a facade for Binance's U.S. operations.

Armed with this background, let's delve into the lawsuit:

The SEC accuses Binance and BAM Trading of deceptive practices, enticing U.S. investors into buying, selling, and trading crypto assets through their unregistered online platforms, Binance.com and Binance.US. The defendants are alleged to have offered unauthorized crypto asset securities, imperiling investor wealth.

The charges extend to Binance and BAM Trading's operations, helmed by Zhao Changpeng, for providing securities market services—trading, brokering, and clearing—on their platforms without SEC authorization.

Moreover, the lawsuit alleges that Binance and BAM Trading partook in illegal, unregistered offers and sales of crypto asset securities, concealing crucial investment-related information.

Another accusation centers on BAM Trading and BAM Management's deceitful promises about the Binance.US Platform's controls, while allegedly accumulating about $200 million from private investors and billions in trading volume.

The lawsuit goes on to accuse Binance of an underground operation, alleging a multi-step strategy since 2018 to evade U.S. laws. The scheme involved the establishment of BAM entities in the U.S. under Zhao and Binance's control, disguised as independent operators of the Binance.US Platform.

Furthermore, the defendants are accused of circumventing U.S. regulatory oversight while providing securities-related services to U.S. clients. The defendants also reportedly failed to implement vital trading surveillance or manipulative trading controls, leading to 'wash trading' and self-dealing on the Binance.US Platform.

The lawsuit portrays Binance and BAM Trading as willful evaders of key disclosure requirements and other investor and market protections, thereby violating the Securities Act of 1933 and the Securities Exchange Act of 1934.

Yes, 1934 is when the laws they are applying to crypto trading in the US were authored.  Many point out 'that's decades before blockchain tech was invented' - I point out that color TV's were still 20 YEARS away.

Binance Vows to Stand Its Ground...

As this report was in preparation, both Binance.com and Binance.US responded.

Binance.US's response emphasized that "the lawsuit is baseless, and we intend to defend ourselves vigorously." The full statement is available on their Twitter account.

Binance.com denounced the SEC's actions on their website, asserting the SEC has "zero justification" to suggest customer assets were at risk. They stated that instead of engaging in a productive dialogue about the platform's safety and security, the SEC preferred to "make headlines."


CEO and Founder of Binance 'CZ' also took to Twitter, sarcastically polling "Who protects you more?" between the SEC and Binance—with Binance has an 85% lead, but obviously this isn't an accurate polling method. He also retweeted the SEC Chairman's lawsuit announcement, provocatively asking "Wonder if he ever reads the comments under his post, from the consumers he is suppose to protect?" 


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Author: Mark Pippen
London News Desk | Breaking Crypto News


MAJOR FALLOUT: Congressman Wants SEC Head Gary Gensler UNDER INVESTIGATION + Review of Actions Leading up to FTX Collapse...

Gary Gensler SEC

In a sign of how seriously this is being taken, the investigation into Biden's appointed head of the SEC comes from a member of his own party, Representative Ritchie Torres (D-NY) is requesting the Government Accountability Office (GAO) to conduct review of the SEC’s actions leading up to FTX’s collapse last month.

The letter largely focuses on SEC chair Gary Gensler for exclusively claiming regulatory powers over crypto exchanges, but failing to properly regulate them...

“If the SEC has the authority Mr. Gensler claims, why did he fail to uncover the largest crypto Ponzi scheme in US history?” Torres wrote. “One cannot have it both ways, asserting authority while avoiding accountability.”

Torres continues to drill into the Chairman "The operating principle of the SEC must be protection for the investing public, rather than publicity for the political appointee in charge" a reminder of Gensler's investigation into Kim Kardashian's tweet promoting a cryptocurrency, concerned that Gensler was preoccupied with inconsequential but high-profile acts while ignoring less glamorous but necessary responsibilities.

The letter goes as far as basically accusing Gensler of causing the SEC to fall apart under his leadership...

"Mr. Gensler's leadership has discouraged the SEC's professional personnel to an unprecedented degree, with the SEC Inspector General reporting the greatest turnover rate in a decade... to what extent has Mr. Gensler’s demoralization of his own personnel hamstrung the Commission in the fulfillment of its obligation to protect investors?” Torres asks in his request to the GAO.

One of those demoralized colleagues is SEC Commissioner Hester Peirce, who has remarked in interviews that Gensler's approach to regulation is "not a good way to regulate" and is not surprised to hear that many have "given up on us."

When it comes to crypto, Gensler has consistently avoided explaining the rules or sharing concerns - organizations only discover they violated regulations when enforcement actions are taken against them.

The SEC has the ability to issue a company an 'exceptive order' which basically results from the company's leaders being able to come in and address concerns with SEC officials. If the SEC believes they are operating outside of the rules unintentionally, this exceptive order serves as an agreement that allows the company to fix what is wrong within a limited timeframe, and the SEC agrees to hold off any enforcement actions against them during that timeframe. 

Zero exceptive orders have been issued since Gensler took over, which shows how badly he destroyed what should be a healthy relationship between regulators and the companies they regulate.

Legitimate businesses should never fear requesting the SEC review their plans or practices, to verify they are in compliance with all relevant regulations. Under Gensler, companies fear they'll leave the meeting with an enforcement action against them.

SEC agents who previously believed their role involved providing assistance and guidance, backed by the ability to enforce the rules, have quit in record numbers as their job changed to simply 'punishing people'.

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Author: Oliver Redding
Seattle Newsdesk  / Breaking Crypto News