SEC Charges Crypto Exchange Bittrex With Operating Unregistered Exchange, Broker, and Clearing Agency

April 17, 2023 Bitcoin.com

SEC targets DeFi in vote to revisit proposal concerning the definition of ‘exchange’

April 14, 2023 Coin Telegraph

“It seems perverse to me that we would be encouraging centralization,” said SEC Commissioner Hester Peirce prior to a vote on the proposal.

The United States Securities and Exchange Commission has announced it will be revisiting the proposed redefinition of an “exchange” under the agency’s rules — a move that could include crypto market participants in decentralized finance, or DeFi.

In an April 14 open meeting with SEC commissioners and staff, SEC Chair Gary Gensler said the proposed rule amendments could benefit investors and markets by bringing certain brokers under additional regulatory scrutiny as well as “modernizing” rules that define an exchange. Under the proposal, an “exchange” would be more closely defined as a system that “bring[s] together buyers and sellers of securities through structured methods to negotiate a trade” and explicitly include DeFi.

“This would account for the evolving nature and electronification of trading platforms in the last 25 years,” said Gensler.

*SEC Chair Gary Gensler addressing commissioners in an April 14 open meeting. Source: SEC*

The commission proposed similar amendments in January 2022, keeping the comment period for the public open until June. Some crypto advocacy groups criticized the SEC’s actions at the time, suggesting it was an overreach of the commission’s authority that could jeopardize participation in the space.

Gensler added:

“Given how crypto trading platforms operate today, many of them currently are exchanges regardless of this reopening release we’re considering today. These platforms match orders of multiple buyers and sellers of crypto securities using established non-discretionary methods. That’s the definition of exchange, and today, most crypto trading platforms meet it.”

SEC Commissioner Hester Peirce, also known as “Crypto Mom” by many of her pro-crypto policy positions, raised concerns about the rules regarding trading platforms that do not handle tokens qualifying as securities, or how to address operators that move from securities to non-securities trading. She added there was “so much ambiguity” regarding the SEC’s current treatment of securities.

“It’s possible that operating a system that uses these technologies to perform exchange activities under the proposed rules in a manner that complies with applicable regulations could significantly reduce the extent to which the system is decentralized,” said Peirce. “Have we thought about how forcing centralization would benefit the American public? [...] It seems perverse to me that we would be encouraging centralization.”

Following the meeting, the SEC reiterated that DeFi projects fall under the commission’s current rules. The U.S. Treasury Department also targeted DeFi services in an April 6 warning regarding money laundering and terrorist financing.

The public comment period for the proposed amendment will be open for 30 following publication in the Federal Register.

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April 3, 2023 Bitcoin.com

Former FTX CEO Seeks $10M Insurance Fund for Legal Defense, Request Opposed by FTX Debtors and Unsecured Creditors

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Cathie Wood’s ARK loading up on Coinbase shares again, buying $18M

March 24, 2023 Coin Telegraph

Cathie Wood’s ARK loading up on Coinbase shares again, buying M

10B5-1

ARK Invest purchased 269,928 shares in Coinbase on March 23, only two days after it sold $13.5 million, its first sale of Coinbase shares this year.

Cathie Wood’s investment management firm has gone back to buying Coinbase shares again, just a day after COIN’s stock price dipped amid news of its Wells notice.

On March 23, ARK Invest purchased 268,928 Coinbase shares via its ARKK Innovation and ARKW Next Generation Internet exchange-traded funds. The shares wereworth $17.88 million at the time of writing.

Only two days prior, and before the news of the Wells notice broke, ARK Invest sold 160,887 Coinbase shares from its ARK Fintech Innovation ETF. The sale was the first time any of ARK Invest’s ETFs shed Coinbase shares in 2023.

Cathie Wood and Ark Invest's trade activity from today 3/23 pic.twitter.com/yyubxTegZj
— Ark Invest Daily (@ArkkDaily) March 24, 2023

Coinbase’s share price has failed to recover since it shared news it had received a Wells notice warning of possible enforcement action from the Securities and Exchange Commission, which led to COIN shares dropping around 21%.

Shares in Coinbase dipped to a low of $64.27 after trading began on March 23, and at time of writing were trading at $66.87 in after-hours trading, according to Barron’s.

*Coinbase’s share price from March 17 to March 23. Source:* *Barron’s*

Coinbase CEO Brian Armstrong had also sold shares in his firm between March 17 to March 20 — just days prior to the Wells notice and share price dip.

SEC filings indicate, however, that Coinbase executives and insiders all enter into 10B5-1 selling plans months in advance and that this tranche of sales was pursuant to a trading plan adopted on Aug. 16.

*SEC filing showing the latest shares sold by Coinbase CEO Brian Armstrong. Source:* *SEC Archives*

While the SEC reached a settlement with crypto exchange Kraken on Feb. 9 after alleging its staking services qualified as securities, Coinbase has repeatedly asserted that its staking products are fundamentally different from Kraken’s and they cannot be universally labeled as securities.

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March 22, 2023 Bitcoin.com

Primary vs. secondary markets: Key differences

March 15, 2023 Coin Telegraph

Coin Telegraph

Primary and secondary markets differ in securities, pricing, risk, volume, liquidity, timeframe and more.

Stock and crypto markets are essential components of the global financial system. These markets provide a platform for investors to buy and sell financial assets, which helps companies raise capital for investment and growth. Moreover, the stock and crypto markets play a crucial role in determining the value of an asset. The market price of a stock or cryptocurrency reflects the collective sentiment of investors about its prospects, which can impact its future growth potential.

Lastly, the stock and crypto markets can be used as indicators of broader economic trends and sentiments. For instance, swings in the stock market can indicate changes in investor perceptions of the health of the economy, whereas moves in the cryptocurrency market can be caused by changes in the law, developments in technology or changes in consumer tastes. Investors can learn more about the state of the economy, potential hazards and investment possibilities by keeping an eye on these markets.

Types of markets

The primary market and the secondary market are the two main categories of markets.

Companies first offer new securities to the public on the primary market, including stocks, bonds and other financial instruments. The primary market’s goal is to help the issuer, whether it be a business, a governmental body or another group, raise money. These securities can be bought directly from the issuer by investors, with the money going to the issuer.

On the other hand, previously issued securities are traded between investors on the secondary market. Instead of purchasing securities directly from the issuer, investors buy and sell securities that have already been issued in this market. The secondary market provides liquidity to investors, allowing them to buy and sell securities quickly and easily. This market is also important for price discovery, as the price of a security is determined by supply and demand factors.

In the cryptocurrency world, the primary market is where new tokens or coins are first offered to the public through initial coin offerings (ICOs) or initial exchange offerings (IEOs). The secondary market, on the other hand, is where previously issued cryptocurrencies are traded among investors. An example of the secondary market in crypto is the cryptocurrency exchange Binance, where investors can buy and sell various cryptocurrencies, such as Bitcoin (BTC), Ether (ETH) and others.

Buying and Selling

NFTs can be traded at a fixed price or through an auction.

Trading of NFTs always happens in 2 markets; the primary market (minting website) and the secondary market (NFTs marketplace).
— Henry Imani (@henryimani_) January 13, 2022

Primary vs. secondary markets

There are several key differences between primary and secondary markets.

Purpose

The primary market is where new securities are issued for the first time, while the secondary market is where previously issued securities are traded between investors.

Issuer

In the primary market, securities are issued directly by the issuer, whether it’s a company, government entity or other organization. In the secondary market, investors trade securities among themselves without involvement from the issuer.

Pricing

On the primary market, the price of a security is typically set by the issuer, based on factors such as market demand, supply and the company’s financials. On the secondary market, the price of a security is determined by supply and demand factors, with investors buying and selling based on their own perceptions of the value of the security.

Risk

The primary market carries a higher risk for investors, as the securities being issued are new and have not yet been tested in the market. In contrast, the secondary market carries a lower risk, as investors can evaluate the performance and stability of the security before deciding to buy or sell.

Volume

The primary market typically has a lower trading volume compared to the secondary market, as securities are issued on a limited basis. The secondary market, on the other hand, has a high trading volume, as investors buy and sell securities on a daily basis.

Liquidity

The primary market has limited liquidity, as investors cannot easily sell newly issued securities until they are listed on the secondary market. In contrast, the secondary market is highly liquid, as investors can buy and sell securities on an ongoing basis.

Timeframe

The primary market is generally open for a limited period of time, as securities are issued on a specific date or over a limited period. The secondary market, on the other hand, is open continuously, allowing investors to buy and sell securities at any time.

securities