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Banking Giant BNY Mellon Expects Significant Revenue From Its Crypto Services: Report

America’s oldest bank is eager to capitalize on the cryptocurrency revolution but remains concerned that the government still has not provided regulatory clarity. According to a new Bloomberg report, Bank of New York Mellon Corporation (BNY Mellon) chief financial officer Emily Portney says the holding company expects digital assets to act as a significant revenue […]

The post Banking Giant BNY Mellon Expects Significant Revenue From Its Crypto Services: Report appeared first on The Daily Hodl.

Former Binance US CEO Catherine Coley is still missing, and no one seems to be talking

Bulls aim to turn the tide in Friday’s $580M options expiry after BTC tops $43K

Regulatory uncertainty and tighter monetary policies continue to weigh on BTC price, but data shows bulls are attempting to provoke a reversal.

Bitcoin (BTC) investors seem uncomfortable with adding positions after the most recent 40% correction from the $69,000 all-time high made on Nov. 10. In addition to the prolonged downtrend, remarks from the United States Federal Reserve on Dec. 15 about rising interest rates are also weighing on risk-on assets.

The Fed signaled that it could raise its benchmark rate three times this year and there are plans to increase the pace of its asset purchasing taper.

Consequently, traders are worried that these plans will negatively impact traditional and crypto markets because liquidity will no longer be "easily" available.

Bitcoin price at Coinbase, USD (right) vs. China stock market MSCI index (left)

Cryptoasset regulation in the U.S. has recently been in the spotlight and recently a member of the Securities and Exchange Commission's Investor Advisory Committee called for the agency to open public comments regarding digital asset regulation.

On Jan. 18, associate law professor J.W. Verret addressed the petition to SEC Secretary Vanessa Countryman and according to Verret, the current path the SEC is taking seems not to recognize that digital assets do not fit within the regulatory framework designed for equity investments.

The professor also questioned what requirements the SEC would consider in approving a Bitcoin spot exchange-traded fund.

$590 million in options expire on Friday

Even though Bitcoin is said to be correlated to traditional markets, BTC derivatives traders were not expecting sub-$44,000 prices according to the Jan. 21 options expiry. Friday’s $590 million open interest will allow bears to score up to $82 million if BTC trades below $41,000 during the expiry.

Bitcoin options aggregate open interest for Jan. 21. Source: Coinglass.com

At first sight, the $380 million call (buy) options vastly surpass the $210 million put (sell) instruments, but the 1.81 call-to-put ratio is deceptive because the recent price drop will likely wipe out most of the bullish bets.

There is no value in the right to buy Bitcoin at $44,000 if it is trading below that price. Therefore, if Bitcoin remains below $44,000 at 8:00 am UTC on Jan. 21, only $64 million of those call (buy) options will be available at the expiry.

Bears are comfortable with Bitcoin price below $42,000

Here are the four most likely scenarios for Friday's $590 million options expiry. The imbalance favoring each side represents the theoretical profit. In other words, depending on the expiry price, the active quantity of call (buy) and put (sell) contracts varies:

  • Between $40,000 and $41,000: 30 calls vs. 3,320 puts. The net result is $132 million favoring the put (bear) options.
  • Between $41,000 and $42,000: 170 calls vs. 2,180 puts. The net result is $82 million favoring the put (bear) instruments.
  • Between $42,000 and $44,000: 1,480 calls vs. 1,130 puts. The net result is balanced between call and put options.
  • Between $44,000 and $45,000: 2,980 calls vs. 630 puts. The net result favors call (bull) instruments by $103 million.

This crude estimate considers put options being used in bearish bets and call options exclusively in neutral-to-bullish trades. However, this oversimplification disregards more complex investment strategies.

Bulls need $44,000 to bag a $103 million profit

Regulatory uncertainty and Federal Reserve monetary policies might be reasons for the recent market weakness, but a mere 5% price pump from the current $42,000 level is enough for Bitcoin bulls to profit $103 million in Friday's expiry.

However, if the current short-term negative sentiment prevails, bears could easily pressure the price below $41,000 and pocket $132 million gains.

Currently, options markets data slightly favor the put (sell) options, but the outcome is yet to be seen.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Former Binance US CEO Catherine Coley is still missing, and no one seems to be talking

SEC Chairman Gary Gensler Stresses Crypto Trading Platforms Must Be Regulated to Ensure Investor Protection

SEC Chairman Gary Gensler Stresses Crypto Trading Platforms Must Be Regulated to Ensure Investor ProtectionThe U.S. Securities and Exchange Commission (SEC) is focusing on bringing cryptocurrency exchanges “inside the investor protection remit,” Chairman Gary Gensler has revealed. “If the trading platforms don’t come into the regulated space, it’d be another year of the public being vulnerable,” he stressed. SEC Focusing on Regulating Crypto Exchanges The chairman of the U.S. […]

Former Binance US CEO Catherine Coley is still missing, and no one seems to be talking

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.

Former Binance US CEO Catherine Coley is still missing, and no one seems to be talking

The SEC has issued $2.4B in crypto-related penalties since 2013

According to a new report, the SEC has launched a total of 97 actions against crypto players since 2013, 20 of which happened in 2021 alone.

The Securities and Exchange Commission (SEC) has issued a total of approximately $2.35 billion in penalties against participants in the digital asset marketplace since 2013 according to a Jan 19 report by Cornerstone Research.

The report, SEC Cryptocurrency Enforcement: 2021 Update, found that the SEC brought a total of 97 enforcement actions worth $2.35 billion between 2013 and the end of 2021.

Fifty eight of the total of 97 were actions litigations and the remaining 39 were administrative proceedings. Of the total $2.35 billion raised by the litigations, $1.71 billion was charged in litigation and $640 million in administrative proceedings.

Allegations in SEC Cryptocurrency Litigations. Source: Cornerstone Research.

The majority of those charged were “firm respondents only,” racking up $1.86 billion of the total $2.35 billion. Meanwhile, individual respondents were charged the remaining $490 million.

Although the SEC doled out the first monetary penalty against a crypto participant in July 2013, the report points out that SEC-initiated litigation in the crypto space didn’t begin to pick up until 2017. Between 2013 and 2017, there was only a total of six SEC-initiated crypto cases.

The agency launched 20 of the total 97 actions in 2021 – 14 litigation actions in U.S. federal courts and six administrative proceedings. Of the 20 total enforcement actions, 70% were related to initial coin offerings (ICOs). The report states:

“Of the 20 enforcement actions brought in 2021, 65% alleged fraud, 80% alleged an unregistered securities offering violation, and 55% alleged both.”

The report’s author Simona Mola wrote in a statement that the SEC’s recent crackdown on crypto may be linked to the appointment of SEC chair Gary Gensler in April 2021, noting that SEC enforcement had been “notably high” between the end of May and mid-September.

“The SEC brought some first-of-a-kind actions against a crypto lending platform, an unregistered digital asset exchange, and a decentralized finance (DeFi) lender. It also imposed one of the largest monetary penalties we have seen in an ICO-related enforcement action after Telegram,” she wrote.

Related: Gensler confirms SEC won’t ban crypto... but Congress could

Cornerstone Research vice president Abe Chernin said that we can expect these tough measures to continue into the new year.

“Given the SEC’s continued focus on this space, in 2022 we may see further scrutiny of certain market participants such as DeFi platforms.”

In the last week of Dec 2021, Gensler added a new staff member Corey Frayer to help advise the agency’s oversight of cryptocurrencies. This came in the wake of news that Elad Roisman would be leaving his position as SEC board member.

Former Binance US CEO Catherine Coley is still missing, and no one seems to be talking

SEC Advisory Committee member calls agency to open for public comment on crypto regulation

"This open call for comment is the only way to appropriately crowd source this issue and appropriately develop a digital asset regulation Genesis Block," said J.W. Verret.

Associate law professor and member of the Securities and Exchange Commission’s Investor Advisory Committee J.W. Verret is calling for the government agency to open for public comment in regards to digital asset regulation.

In a petition addressed to SEC Secretary Vanessa Countryman, Verret said opening the floor to comments on digital assets could function as a Genesis Block for the SEC to reform its regulations on digital assets. Verret said he was a holder of Bitcoin (BTC), Ether (ETH), and “a number of layer 1 and layer 2 tokens readily available on top tier exchanges,” and was concerned how the SEC could potentially crack down on tokens it currently does not consider securities.

“Under the SEC’s ‘strategically ambiguous’ interpretation of the Howey test regarding classification of investment contracts, I cannot be certain that the SEC will not in the future target one of my token holdings, under the guise of the Commission’s investor protection mission, in a manner that would ultimately cause me significant losses as a property owner,” said Verret. “This open call for comment is the only way to appropriately crowd source this issue and appropriately develop a digital asset regulation Genesis Block.”

Since the 1940s, the SEC has used the Howey Test to determine whether certain assets qualify as "investment contracts" and are considered securities. Many experts consider the SEC's 2017 DAO Report, in which it said that digital assets could indeed qualify, as one of the most significant regulatory moments for cryptocurrencies in the United States.

Citing his experience as a law professor, Verret implied that the SEC’s application of the Howey Test on digital assets was inconsistent from the language used in the Supreme Court decision, potentially leading to cases that could result in the highest court overturning the 1946 case:

“The SEC’s present course appears to be one designed to strategically bring cases using the Howey test as a weapon against tokens (and token trading services and technologies) which cannot reasonably be registered as securities (or securities exchanges) under the regulations promulgated pursuant to the ‘33 and ‘34 Acts, even if they wanted to and were required to do so (despite neither necessarily being true). I believe this is ultimately a losing strategy for the SEC as an institution.”

According to Verret, the current regulatory path the SEC is taking seems not to recognize that “digital assets, by their very design, do not fit within the classic framework of regulations designed for equity investments in firms led by boards of directors.” The law professor also criticized SEC chair Gary Gensler’s approach of asking crypto projects to “come in and talk to us,” saying many could be concerned that “engaging with the SEC may make their project the next enforcement target of the SEC.”

In his call for the SEC to open for public comment “to establish a core Digital Asset Regulation Genesis Block,” Verret suggested having the agency address investor protections around crypto, where blockchain-based tokens in decentralized projects could fall within current securities regulations, how federal securities laws might take into account “unique aspects of token offerings,” and Commissioner Hester Peirce’s proposal for a three-year safe harbor for certain crypto projects. In addition, he called for a question on what requirements the SEC will consider in approving a Bitcoin spot exchange-traded fund.

Related: US lawmaker proposes safe harbor for digital tokens in new bill

While the agency has given the green light to BTC futures-linked ETFs, it has repeatedly rejected applications from companies seeking ETFs with direct exposure to crypto. ProShares launched the first BTC futures-linked ETF in the United States on the New York Stock Exchange in October, with a similar crypto investment product from Valkyrie later launching on the Nasdaq.

“All five SEC Commissioners have a unique opportunity to stake this development with their own priorities via the design of the call for comment,” said Verret. “This Digital Asset Reg Genesis Block can commence an interactive process that can make securities regulation more flexible, more robust, and ultimately better protect investors.”

Former Binance US CEO Catherine Coley is still missing, and no one seems to be talking

Bitcoin ETF Launch Hype Fades as Funds Slip in Value, BTC Futures Open Interest Down 38% in 2 Months

Bitcoin ETF Launch Hype Fades as Funds Slip in Value, BTC Futures Open Interest Down 38% in 2 MonthsFollowing the charged-up debut of the Proshares bitcoin exchange-traded fund (ETF), Valkyrie’s bitcoin futures ETF and the Vaneck bitcoin strategy ETF, interest in these types of funds seems to have faded a great deal. After the Proshares bitcoin ETF BITO reached an all-time high on November 10, the ETF is down 39% over the last […]

Former Binance US CEO Catherine Coley is still missing, and no one seems to be talking

A third of Americans to buy Bitcoin by end of 2022, says Ric Edelman

The future’s bright for Bitcoin according to Ric Edelman, founder of financial advisory outfit Edelman Financial Engines.

Bitcoin bull and founder of Edelman Financial Engines Ric Edelman has made some promising predictions about the future of the seminal cryptocurrency.

In an interview on CNBC program ETF Edge on Jan. 10, Edelman said:

“We’re already at a quarter of that number with 24% of Americans owning Bitcoin. It won’t be that much of a stretch for it to get to one-third. Bitcoin is becoming more and more mainstream. People are hearing about it everywhere–it isn’t going away.”

While 2022 got off to a rocky start, In his view, governments corporations, foundations, pension funds are investing in BTC: “there is major institutional involvement.”

As the author of soon-to-be-released “The Truth about Crypto,” Edelman is a long-standing crypto proponent. In 2019, he described Bitcoin as the first “genuinely new asset class” in 150 years, and back in December 2018, he recommended that investors load up on the orange coin.

In a follow-up interview with CNBC yesterday, he lamented that while he has predicted a Bitcoin spot exchange-traded fund (ETF) for the past seven years, he’s convinced that by 2023, there will be spot ETF approval.

Similar to U.S. Securities and Exchange Commissioner Hester Peirce’s thoughts on the matter, Edelman articulates that the SEC is running out of excuses to say no:

“A lot of the concerns the SEC has have been resolved by the industry through their own maturity, innovation and development. I am confident that we will see the SEC say yes because there is no legitimate reason for them not to.”

Matthew Hougan, chief investment officer at Bitwise Asset Management agreed with him in the second interview.

Related: Crypto mainstream adoption: Is it here already? Experts answer, Part 1

Hougan stated that there would be even more investor protections and a better product thanks to the “cumulative weight of the evidence that will force them to move forward with approval.” Consumer protection provided by an SEC-run ETF is the cherry on top of a slick product.

ETF speculation aside, Edelman is clairvoyant about the banality of Nakomoto's invention in the future. He summed it up succinctly; Bitcoin is “going to be as common in the next couple of years as any other portion of a portfolio.”

Former Binance US CEO Catherine Coley is still missing, and no one seems to be talking

SEC Chair Gensler Discusses How Securities Laws Apply to Crypto Tokens — Won’t Say if Ethereum Is a Security

SEC Chair Gensler Discusses How Securities Laws Apply to Crypto Tokens — Won’t Say if Ethereum Is a SecurityThe chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has explained how securities laws apply to cryptocurrency tokens as he outlined the commission’s priorities in regulating the crypto space. “Our role at the SEC is to ensure that the public still gets basic protection,” he stressed. SEC Chair Gary Gensler on Cryptocurrency […]

Former Binance US CEO Catherine Coley is still missing, and no one seems to be talking