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SEC rejects Skybridge’s application for spot Bitcoin ETF

The commission rejected a rule change allowing listing and trading shares of the First Trust SkyBridge Bitcoin ETF Trust, citing similar reasons for disapproving Bitcoin spot ETFs from VanEck in November and WisdomTree in December.

The United States Securities and Exchange Commission, or SEC, has officially disapproved the application for First Trust SkyBridge’s spot Bitcoin exchange-traded fund after several deferments.

In a Thursday filing, the SEC rejected a proposed rule change from the New York Stock Exchange, or NYSE, Arca to list and trade shares of the First Trust SkyBridge Bitcoin ETF Trust. The SEC said any rule change in favor of approving the ETF would not be “‘designed to prevent fraudulent and manipulative acts and practices” nor “protect investors and the public interest.”

The decision follows SkyBridge first applying to list a Bitcoin ETF on the NYSE in March 2021. The SEC twice designated a longer period to approve or disapprove the proposed rule change for the ETF in July and November before reaching its decision today.

In its rejection, the SEC said that the NYSE had not met the requirements of listing a financial product under its rules of practice as well as those of the Exchange Act. Under these restrictions, exchanges seeking to list a BTC ETF need to have “a comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference bitcoin assets.”

The NYSE Arca used a $10 million market order example to claim that buying and selling large amounts of Bitcoin (BTC) would have an “insignificant market impact.” The exchange also hinted at Tesla’s $1.5 billion BTC purchase in February as an example of gaining exposure to crypto through the company’s shares, arguing for the need for a different investment vehicle with exposure to BTC as opposed to “imperfect bitcoin proxies” which provide only “partial bitcoin exposure paired with additional risks.”

The commission rejected these claims, citing similar reasons for disapproving Bitcoin spot ETFs from asset manager VanEck in November and WisdomTree in December. To date, the SEC has not approved any ETF with direct exposure to crypto, but has given the greenlight to offerings linked to BTC futures, including ones from ProShares and Valkyrie.

Related: ETFs listed — What’s next for Bitcoin?

A separate decision for a Bitcoin ETF application from the New York Digital Investment Group, or NYDIG, is expected by March 16. The application is still under review after being delayed on Jan. 15.

Binance US officially launches trading services in Connecticut

Despite regulatory uncertainty, the United States is one of the world's foremost cryptocurrency markets and dominates daily Bitcoin trading volumes.

United States cryptocurrency exchange Binance.US, which operates separately from the global Binance platform, has officially opened its trading services to residents of Connecticut. 

Beginning Jan. 20, Connecticut residents can register to buy, sell and trade digital assets such as Bitcoin (BTC) and Ether (ETH) on the Binance.US platform, the company announced on Thursday. Residents will also have access to the Binance.US mobile app on Android and Apple devices.

Binance.US launched in 2019 to provide regulated crypto trading services to residents of the United States. Currently, the trading platform is approved to operate in 44 U.S. states and intends to secure approvals across all 50 states and territories.

Binance.US CEO Brian Shroder said his firm’s expansion reflects the growing demand for digital assets in the country. A new survey of Americans conducted by crypto platform Voyager Digital seems to corroborate that view. According to the survey, nearly two-thirds, or 61%, of Americans may purchase digital assets this year. Fifty percent of the survey participants said they would invest more in cryptocurrencies if they understood the asset class better.

Related: Crypto mainstream adoption: Is it here already? Experts answer, Part 3

Meanwhile, separate data from Arcane Research shows that the United States is dominating the Bitcoin trading arena. So far this year, U.S. trading hours account for 43% of Bitcoin’s average 24-hour trading volumes.

As Cointelegraph reported, Binance.US is eyeing a “mega funding” deal through an initial public offering. Binance CEO Changpeng Zhao expressed confidence in the U.S. firm’s ability to raise the funds even after investors reportedly backed out a similar initiative last summer over regulatory concerns.

Witnesses address energy impacts of crypto mining during House hearing

“If policymakers take a cautious approach and foster a pro-innovation environment, the rewards for consumers, investors and all Americans are likely to be great," said Jordan Ramis shareholder Gregory Zerzan.

Five industry experts appearing before the United States House Energy and Commerce Oversight Subcommittee had different views on how lawmakers should address the energy consumption of cryptocurrencies.

In written testimony released before a Thursday hearing on “Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains,” former Comptroller of the Currency Brian Brooks argued that the energy consumption of Bitcoin (BTC) mining was “economically productive” given other assets including gold required roughly the same amount of energy for mining, with the “a host of other environmental concerns.” In addition, Brooks said that the traditional global banking system consumed roughly 2.5 times the amount of power to produce the same amount of value BTC does at its current market capitalization.

John Belizaire, the founder and CEO Soluna Computing and another witness appearing at the hearing, said that from an energy perspective, the miners and computers needed to power crypto are "not a waste" and could encourage the development of renewable energy sources. The CEO said that unlike other banking systems, Bitcoin mining included the option of turning the systems off when necessary, giving miners the ability to absorb excess energy from an area’s electrical grid rather than straining it.

Cornell Tech professor Ari Juels, who has often been a critic of crypto mining as it stands today, was supportive of the crypto space as a whole but argued in favor of “energy efficient alternatives” rather than the proof-of-work common for mining. He added that the Ethereum blockchain’s transition to proof-of-stake would likely consume “far less electricity” and have features including smart contracts and nonfungible tokens — unlike Bitcoin.

“Bitcoin does not equal blockchain,” said Juels. “The tremendous promise of blockchain technology does not require Bitcoin or its energy-intensive component called proof of work.”

Steve Wright, a recently retired former general manager of the Chelan County in Washington, similarly hinted that mining firms should consider "mechanisms to assure cryptocurrency production is encouraged toward efficient outcomes as early as possible." Wright noted that the high value of clean energy costs in the area seems to be pushing many crypto miners towards carbon-emitting, fossil-fired sources of power "at least the near term."

Related: Bitcoin mining becomes more sustainable: Mining Council's Q4 survey

U.S. lawmakers seem to be giving crypto and blockchain a great deal of attention as the space grows. In December, the Senate Banking Committee held a hearing on stablecoins and how the U.S. might participate in the race to adopt digital currencies. Brooks also testified at a House committee hearing that same month on digital assets’ role in the future of finance.

“Although digital tokens are a highly speculative and volatile asset class, they also represent the promise of a more open, more widely shared internet,” said Gregory Zerzan, a shareholder at business law firm Jordan Ramis. “If policymakers take a cautious approach and foster a pro-innovation environment, the rewards for consumers, investors and all Americans are likely to be great.”

Bitcoin shrugs off Russia crypto ban fears as BTC price nears $43.5K

A sharp uptick could have wider implications for the two-month Bitcoin price downtrend, one analyst reveals.

Bitcoin (BTC) surged on the Wall Street open on Jan. 20 as news that Russia was planning to "ban" cryptocurrency failed to impact price performance.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

BTC price climbs $2,500 in 24 hours

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD adding $1,500 over several hours on Thursday, continuing the upside move, which began with a bounce off $41,000.

At the time of writing, the pair was acting above $43,000, having reached highs of $43,468 on Bitstamp.

That peak represented an eclipse of resistance immediately above the $43,000 mark, and investors are now watching to see whether Bitcoin can hit higher targets.

"A weekly close just like this (i.e. above ~$43,100) would be enough for BTC to build on this early bullish momentum and move higher," trader and analyst Rekt Capital argued in his latest Twitter update."

"Still a few days left for the weekly close to confirm this but so far, so good."

Others zoomed out further, with fellow analyst William Clemente noting a possible breakout of a downtrend in place since early December.

The action came despite fresh desires to clamp down on Bitcoin and cryptocurrency more broadly from Russia's central bank, with comments calling for a blanket ban on circulation and usage as well as mining.

Unlike similar announcements — and reiterations of those announcements — by China, the market was entirely unfazed by the plans, something which was not lost on pundits.

"Russia is looking to repeat the mistakes of China," analyst and podcast host Scott Melker, known as the "Wolf of All Streets," reacted.

A $34 million hack of trading platform Crypto.com likewise failed to dent enthusiasm.

Altcoins seize a chance to move

Optimism also extended to altcoins as Bitcoin moved up, with Ethereum (ETH), Solana (SOL) and Terra (LUNA) leading the top ten cryptocurrencies by market cap.

Related: Breaking ‘bear market’ in Bitcoin demand will spark next BTC price surge — Analysts

ETH/USD added around 3% on the day, making the chances of a $3,000 retest at least temporarily less likely.

ETH/USD 1-hour candle chart (Bitstamp). Source: TradingView

"Very good movements on the markets," Cointelegraph contributor Michaël van de Poppe summarized.

Andreessen Horowitz aims to raise $4.5 billion to invest in crypto funds

Last week, A16z reportedly said it would raise $3.5 billion for its VC fund, as well as another $1 billion for Web3 seed investments.

A16z, a VC company with investments in Protocol Labs, Polychain Capital and Opensea among others, is now planning to raise $4.5 billion for its latest fund, which is focused solely on cryptocurrencies, according to a report by U.K newspaper Financial Times.

Last week, Andreessen Horowitz’ venture capital firm reportedly said it would raise $3.5 billion for its VC fund, as well as another $1 billion for Web3 seed investments, with the plans to be announced in March. The firm is ready to eclipse the $2.2 billion it raised in June 2021, which was the crypto industry's largest at the time.

The first fund will be used for investment in crypto start-ups and projects that are seeking investment for initiatives, while the second fund will be focused on investing in digital tokens and currencies.

Andreessen Horowitz, with almost $30 billion in assets under management, is one of Silicon Valley's top venture capital companies. The venture fund was one of the first major investors in companies like Skype, Facebook, Twitter and Coinbase. If a16z is successful in attracting investors to raise $4.5 billion, it would become the industry's largest, surpassing Paradigm's $2.5 billion in November 2021.

Related: OpenSea raises $300M for encrypted digital marketplace

A16z has backed a number of crypto-friendly gaming platforms, most recently Carry1st, which is the firm's first investment in a startup on the African continent. In October 2021, a high-powered delegation from the VC firm engaged with members of Congress and administration officials in the United States to discuss crypto rules.

1inch Network expands to Avalanche and Gnosis Chain

The decentralized exchange aggregator said it hopes to offer users more options for low-costs, high-speed transactions.

The 1inch Network announced on Wednesday its plans to deploy the 1inch Aggregation Protocol on Avalanche and the 1inch Limit Order Protocol on Gnosis Chain, formerly known as the xDai Chain. In a statement shared with Cointelegraph, the 1inch Network expressed its aim to further expand its capabilities within the decentralized finance, or DeFi, industry.

“1inch’s main goal is to offer users the best deals across the blockchain space,” said Sergej Kunz, 1inch Network co-founder, adding that the expansion to Avalanche and Gnosis Chain "will offer 1inch users more options for cheap and fast transactions.”

Avalanche (AVAX) is a quickly growing cross-chain network whose TVL, according to DeFi Llama, stood at $10.4 billion at the time of publication. However, the AVAX token has been subject to vulnerability as part of the Multichain hack this week.

According to the statement, a number of protocols will be immediately available via 1inch on Avalanche, including 1inch Limit Order Protocol, Aave, Baguette, Canary Exchange, Pangolin, SushiSwap and Trader Joe.

Related: 1inch Network concludes $175M Series B led by Amber Group

Gnosis Chain (GNO) had a TVL of $21.5 billion at the time of publication, according to DeFi Llama. The largest DEX on Gnosis Chain is Curve v1, and other protocols immediately available on Gnosis include the 1inch Limit Order Protocol, Elk Finance, Honeyswap, Levinswap and SushiSwap.

Aleph.im raises $10M to develop censorship-resistant data storage

Decentralized storage and computing network Aleph.im raised fresh funds to face Amazon Lambda as a decentralized alternative.

The competition among the computing networks is warming up, with decentralized players coming into the stage with backing from the crypto ecosystem.

Decentralized storage and computing network Aleph.im completed a $10 million funding round led by Stratos Technologies. Zeeprime, NOIA Capital, Theia, Bitfwd Capital, Token Ventures and Seven Capital have contributed to the funding, among others. The cross-blockchain network aims to provide fully decentralized computing power and censorship-resistant data storage, according to the announcement.

Aleph.im scheduled its first computing resource node rollout for January following the funding round. The nodes would eventually become the decentralized network’s main processing power source.

Aleph.im rewards its core channel nodes with the network's native token, ALEPH. The new funding would enable Aleph.im to increase its minimum wage payment capabilities from the current 70 core channel nodes to 150 node operators. This expansion aims to create a distributed virtual machine network to make full-stack decentralization possible for key blockchain and decentralized application (DApp) developers.

After kicking off the network’s computer nodes, Aleph.im also plans to activate storage nodes in 2022, according to Aleph.im founder Jonathan Schemoul. Decentralized storage would enable Web3 developers, DApps and protocols “to fully decentralize up to the last piece of their development stack,” he added.

Related: Solana-based DeFi protocol Hubble raises $10M, prepares for mainnet launch

Stratos Technologies’ Rennick Palley noted that Web3 development would continue to rely on a small number of service providers until the full stack supporting compute and processing power is decentralized.

“Aleph.im’s efforts benefit the industry as a whole, and, for this reason, we are proud to be contributing to the larger effort and movement toward truly decentralized full-stack architecture.”

Last year, Aleph.im introduced a DApp to let users automatically back up the data underlying their nonfungible tokens. Gaming giant Ubisoft picked Aleph.im to participate in the sixth season of Ubisoft’s Entrepreneurs Lab. Despite facing backlash from the gaming community, Ubisoft joined the Aleph.im network as a channel node operator.

Canadian Bitcoin platform Shakepay raises $35M in Series A funding

Bitcoin startup Shakepay raised $35 million ($44 million CAD) in Series A funding round, valuing the company at $251 million.

It’s another shake-up for the finance industry as Montreal-based Bitcoin (BTC) startup Shakepay raised $35 million from investors. The fresh funding from the United States-based venture capital firm QED Investors values the company at $251 million. 

Founded in 2015, Shakepay allows Canadians to buy and sell BTC and pay their friends. It also supports the purchase of Ether (ETH).

The startup aims to use the funds to consolidate growth, focus on bringing on additional products to market such as the recently launched Shakepay Visa Prepaid Card, and expand the team.

Speaking to Cointelegraph, ShakePay CEO Jean Amiouny said:

Shakepay’s seen demand boom for adopting Bitcoin and we’re really excited about this raise to be able to offer more Bitcoin products to our fellow Canadians."

The funding supports a swathe of encouraging stats for 2021. The company surpassed $6 billion in total volume reaching more than 900,000 customers last year. 

According to the Shakepay blog, the company reached 1% of Canada’s population, or 380,000 people, in March last year and 2% of the population in November. The company grew its userbase by 381% in 2021.

Canada is increasingly becoming pro-Bitcoin. A recent survey showed that 62% of Canadians want to get paid in crypto by 2027, while a Bitcoin ETF launched in Canada late last year. 

For Shakepay, it’s all about retail adoption, as the group seeks to make “it easy for Canadians to buy and earn the soundest money to ever exist: Bitcoin.”

Related: Canadian restaurant chain reports earning 300% gains on BTC investment to weather pandemic

Jean Amiouny illustrated the company’s vision in the official announcement:

With our Series A funding, Shakepay is excited to welcome QED Investors, who have deep experience in the financial technology industry, and who will support the continued growth of Shakepay’s vision to be a leader in financial applications that help Canadians achieve financial wealth through investing in bitcoin.”

Russian central bank proposes blanket ban on crypto mining and trading

Russian central bank has demanded reinforcement of the ongoing crypto payment ban and seeks to introduce punishments

In a report published on Thursday, The Central Bank of Russia has called for a blanket ban on domestic cryptocurrency trading and mining.

The report titled "Cryptocurrencies: trends, risks, measures" compares cryptocurrencies to a Ponzi scheme and calls for a complete ban on their use throughout Russia. The authors claim that cryptocurrencies are highly volatile in nature and are being used as a tool for illegal activities. The report also warned that crypto could pose a risk to financial sovereignty and could aid people in taking money out of the national economy. The report read:

“Potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including Russia.” 

The Russian central bank demanded a complete ban on over-the-counter (OTC) trading desks, crypto exchanges as well as peer-to-peer exchanges. The report also called for reinforcing the crypto payment ban and the introduction of strict punishment for any violations.

The central bank report further proposes a complete crypto mining ban in the country, claiming that mining activities create new supply which leads to demand for other crypto services such as exchanges. Crypto mining could undermine the existing green energy agenda and also disrupt Russia’s energy supply. The official paper read:

“Crypto mining creates a non-productive electricity expenditure, which undermines the energy supply of residential buildings, social infrastructure and industrial objects, as well as the environmental agenda of the Russian Federation."

Russia became the third-largest Bitcoin (BTC) mining hub following China’s crypto mining ban in May. If acted upon, the latest proposal for a blanket ban on crypto mining in the country could lead to yet another realignment on the world's crypto mining map.

According to a Bloomberg report, Russia's Federal Security Service (FSB) was instrumental in advancing the ban, having lobbied central bank governor Elvira Nabiullina to pursue a hardline course. The report claims that the FSB is worried about the increasing number of untraceable funding to opposition parties and media via crypto.

The report is framed as an invitation for public discussion, with the deadline for comments and suggestions from interested parties set at March 1, 2022.

Related: Russia prioritizes CBDC ruble as overall crypto outlook seems positive

The central bank of Russia has been skeptical of cryptocurrencies for quite some time. However, what could be seen as signs of president Vladimir Putin’s interest in and understanding of crypto led some to believe that the Russian government might choose to regulate the decentralized industry rather than ban it.

Meta reportedly plans to integrate NFTs on Facebook and Instagram profiles

Meta reportedly plans an integration to allow social media users to display their NFTs on Facebook and Instagram.

Multinational tech conglomerate Meta is reportedly diving into nonfungible tokens (NFTs) by integrating a feature that will let users show off their NFTs on their Facebook and Instagram profiles. According to the report, Meta is currently working on prototypes that will allow users to mint collectible tokens.

Meta is also discussing potentially launching a marketplace that allows the buying and selling of NFTs. However, while the news may excite millions of NFT enthusiasts that use social media, all of the projects are within the earliest stages and may still change accordingly.

The discussions follow a push to onboard more staff to help with Meta’s projects. Back on January 12, Meta initiated a push to hire more employees and got around one hundred people to jump ship from Microsoft. Meanwhile, to avoid staff from ditching them for Meta, Apple offered bonuses from $50,000 to $180,000 along with stock options.

Formerly known as Facebook, Meta’s major rebranding lets the company focus on initiatives beyond social media. Last year, the company announced its plans to create a metaverse that connects physical experiences to online social experiences. The company also released previews of haptic gloves that may be rolled out for use in its future metaverse.

Related: Facebook’s centralized metaverse a threat to the decentralized ecosystem?

Potential earnings in the NFT world are becoming very hard to ignore. Firms even predict that traditional brands will dive into the NFT space and explore how to earn within the market.

Just recently, leading NFT marketplace Opensea surpassed $3.5 billion in monthly transaction volume. This means that over $169 million are being spent each day in NFT trading just within the platform. According to NFT sales tracking statistics, the NFT market has had a total of $25 billion in all-time sales so far.