SEC asks judge to reject Coinbase’s motion to dismiss lawsuit

October 4, 2023 Coin Telegraph

The regulator has asked a federal judge to deny Coinbase’s motion to dismiss its lawsuit, claiming the exchange knew the cryptocurrencies it sold were securities under the Howey test.

The United States Securities and Exchange Commission has asked a federal judge to deny Coinbase’s motion to dismiss a lawsuit by the regulator.

In an Oct. 3 filing in a New York District Court, the SEC hit back at claims in Coinbase’s dismissal motion and reiterated its belief that some of the cryptocurrencies listed on its platform were investment contracts under the Howey Test subject to SEC registration.

“Each crypto asset issuer invited investors — including purchasers on Coinbase’s platform — reasonably to expect the value of their investment to increase based on the issuer’s broadly-disseminated plan to develop and maintain the asset’s value,” the SEC wrote.

The SEC asserted Coinbase has “known all along” that cryptocurrencies it sells are securities if they meet the Howey Test and alleged the exchange recognized this in its filings with the SEC.

The regulator also scrubbed Coinbase’s argument invoking the “major questions doctrine” which claimed the SEC has no authority over the crypto market until Congress says so.

“The SEC has not assumed for itself any new power to do what the federal securities laws do not already expressly authorize it to do,” the SEC said.

In an Oct. 3 X (Twitter) post, Coinbase legal chief Paul Grewal said the SEC’s arguments were “more of the same old same old” and asserted the assets it lists “are not securities and are not within the SEC’s jurisdiction.”

The @SECgov just filed its opposition to our motion to dismiss their case against @Coinbase. It’s more of the same old same old. But don’t just take my word for it – take a look for yourself. 1/7 https://t.co/QMdkRoiq0V
— paulgrewal.eth (@iampaulgrewal) October 3, 2023

Grewal claimed the SEC’s arguments in its response would mean “everything from Pokemon cards to stamps to Swiftie bracelets are also securities.”

Miles Jennings, a16z crypto' general counsel, claimed in an X post that the SEC’s motion “has a lot of holes.”

The SEC's opposition to @coinbase's motion has a lot of holes. Even if the court were to agree with the SEC's main contention (that investment contracts don't require legal contracts), the SEC's case should still fail.

As we discussed in our brief in August, the SEC's theory of… https://t.co/RTzlutSM9t
— miles jennings (@milesjennings) October 3, 2023

Jennings added even if the court were to agree with the regulators main argument around investment contracts then the case “should still fail” as he believes the SEC’s definition of an investment contract has “endless breadth.”

Magazine: Are DAOs overhyped and unworkable? Lessons from the front lines

US Treasury sanctions crypto wallets as authorities crack down on fentanyl

October 3, 2023 Coin Telegraph

Coin Telegraph

According to Deputy Treasury Secretary Wally Adeyemo, the sanctioned wallets "received millions of USD funds over hundreds of deposits" used for illicit drugs.

The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury has sanctioned crypto wallets allegedly connected to individuals and companies involved in the production of fentanyl.

In an Oct. 3 notice, the U.S. Justice Department announced indictments against several China-based chemical manufacturers as well as many of their employees, who allegedly used crypto transactions as part of an illegal fentanyl precursor distribution scheme. According to the U.S. authorities, the companies “tend to use cryptocurrency transactions to conceal their identities and the location and movement of their funds”, identifying at least 3 individuals who held crypto wallets for payments.

OFAC added wallets for Bitcoin (BTC), Ether (ETH), USD Coin (USDC), Tether (USDT) and Tron (TRX) connected to Chinese nationals and Valerian Labs to its list of Specially Designated Nationals along with companies including Hanhong Pharmaceutical Technology and Hebei Crovell Biotech. According to Deputy Treasury Secretary Wally Adeyemo, the enforcement action was aimed at disrupting an illicit drug network.

‘[W]e have identified and blocked over a dozen virtual currency wallets associated with these actors,” said Adeyemo. “The blocked wallets, which received millions of USD funds over hundreds of deposits, illustrate the scope and scale of the operation targeted today.”

Justice Department Announces Eight Indictments Against China-Based Chemical Manufacturing Companies and Employeeshttps://t.co/f37okHaa6z
— Justice Department (@TheJusticeDept) October 3, 2023

Many lawmakers have urged action on cracking down on the distribution of fentanyl in the United States, where the drug was estimated to be responsible for more than 67,000 deaths in 2021. Massachusetts Sen. Elizabeth Warren — an outspoken critic of digital assets — called out potential links between crypto payments and drug trafficking in a May hearing.

The first week in October also marked the 10th year in prison for Ross Ulbricht, the founder of the online marketplace Silk Road. Many criticized the platform for facilitating the drug trade by allowing payments with digital assets, but Ulbricht still has his supporters in the crypto space.

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

Bitcoin drives digital asset inflows for the first time in 6 weeks: Report

October 3, 2023 Coin Telegraph

Australia

But Solana was the only other major asset to show inflows for the week.

Cryptocurrency assets experienced inflows for the first time in six weeks during the week of Sep. 22-28, according to the latest Digital Asset Fund Flows Weekly Report from European digital assets management firm CoinShares.

Bitcoin was the biggest gainer with inflows in the amount of $20.4 million for the week.

Good week, everyone. Here are the latest #FundFlows and observations by CoinShares Head of Research @JButterfill.

This week inflows: US$21m (after 6 weeks of outflows)

We believe these inflows are a reaction to a combination of positive price momentum, fears over US… pic.twitter.com/0VHHBh1n50
— CoinShares (@CoinSharesCo) October 2, 2023

Solana took second with $5 million as the only other asset to show inflows. Per CoinShares, this is its 27th week of inflows with only four weeks of outflows for 2023, making it “the most loved altcoin this year.”

On the flip side, Ethereum experiences outflows in the amount of $1.5 million. This marks its seventh consecutive week of outflows and, according to CoinShares, solidifies its status as “the least loved altcoin.”

Flows for other altcoins, including XRP after it saw more inflows than Solana in the previous week, were negative and minimal.

CoinShares analysts attributed the the lack of altcoin movement alongside Bitcoin’s trend-breaking momentum to a combination of factors:

“We believe the inflows are a reaction to a combination of positive price momentum, fears over US government debt prices and the recent quagmire over government funding.”

The quagmire referenced by CoinShares involves the ongoing negotiations over U.S. government funding. Earlier in the previous week’s cycle, fears over a republican-wrought stalemate led to predictions that the U.S. government would shut down on Oct. 2. However, a last-minute effort by senate leaders allowed for the passage of a stopgap that ensures funding through November 17. Whether congress and the president can come to terms to fund the government beyond the current measure’s expiration remains to be seen.

Geographically, Germany, Canada, and Switzerland lead the charge for the week with inflows amounting to $17.7 million, $17.2 million, and $7.4 million respectively. Australia and France held the line, metaphorically speaking, with $0.1 million for the former and a nil push for the latter.

The United States played foil to Europe and Canada’s inflows, registering $18.5 million in outflows with Sweden and Brazil following suit at $1.8 and $0.9 outgoing respectively.

Alex Mashinsky’s jury trial scheduled for September 2024

October 3, 2023 Coin Telegraph

Sam Bankman-Fried FTX trial — five things you need to know

October 2, 2023 Coin Telegraph

Coin Telegraph

The long awaited trial of former FTX CEO Sam Bankman-Fried gets underway on Oct. 4 - here’s what you need to know.

Sam Bankman-Fried will face his first day in court over a litany of charges less than a year after the calamitous collapse of cryptocurrency exchange FTX.

The former CEO of the bankrupt exchange is set to face 21 days in court during his criminal trial scheduled from Oct. 4 to Nov. 9. Bankman-Fried has been in pre-trial detention at the Metropolitan Detention Center since Aug. 11 and has filed several unsuccessful motions seeking his release to prepare for his trial.

United States District Judge Lewis Kaplan denied the former FTX CEO’s latest motion for release, citing concerns that Bankman-Fried was a flight risk given the severity of charges being faced and the potential length of time he could spend behind bars if convicted. The former FTX CEO has been granted permission to meet with his legal team at 7 am on active court days.

Proceedings will begin with jury selection on Oct. 3 before the trial itself gets underway on Wednesday, Oct. 4. Cointelegraph has highlighted five major talking points ahead of one of the biggest cryptocurrency-related trials in history.

What happened to FTX?

Once hailed as the darling of the cryptocurrency industry, FTX was co-founded in 2019 by Bankman-Fried and Gary Wang and went on to become a household name in the United States due to its high-profile sponsorships and campaigns.

Over the next three years, the company carried out a series of fundraising rounds that included a preliminary $900 million raise in July 2021 and another $420 million raise in October 2021. 2022 promised to be fruitful for the exchange as it kicked off the year with a further $400 million fundraising round headed up by the likes of SoftBank and Temasek, valuing the company at an estimated $32 billion.

FTX signed several major sponsorship deals during those two years. These included Mercedes’ Formula 1 team, as well as a reported $135 million deal for the naming rights of the Miami Heat’s NBA arena.

The company appeared to be in sound standing as the wider cryptocurrency ecosystem wavered after the implosion of the Terra/LUNA stablecoin. Several high-profile cryptocurrency lending firms were caught in the fallout, which led to FTX making a $240 million offer to acquire BlockFi as well as a failed bid to bailout Voyager Digital.

Things began to unravel in November 2022, with rumblings of trouble at FTX related to its relationship with Bankman-Fried’s quantitative trading firm Alameda Research and the latter’s dependence on FTX’s native exchange token FTT.

1) Hi all:

Today, I filed FTX, FTX US, and Alameda for voluntary Chapter 11 proceedings in the US.
— SBF (@SBF_FTX) November 11, 2022

The house of cards came crumbling down as Binance CEO Changpeng ‘CZ’ Zhao announced that the exchange would sell its FTT token holdings, which played a role as a catalyst for the liquidity crisis at FTX as the value of FTT plummeted.

Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs. Onwards.
— CZ Binance (@cz_binance) November 6, 2022

On Nov. 11 2022, FTX, FTX US and Alameda Research began bankruptcy proceedings, with Bankman-Fried resigning as CEO. John Ray III, the man who handled the infamous Enron bankruptcy, was appointed as acting CEO to review and monetize remaining assets of the FTX group.

Seven counts

Bankman-Fried stands accused of seven counts of conspiracy and fraud relating to the collapse of the exchange.

The U.S. Justice Department had originally announced an eight-count Indictment with fraud, money laundering, and campaign finance offenses in December 2022. This included two counts of wire fraud conspiracy, two counts of wire fraud, and one count of conspiracy to commit money laundering.

An excerpt from the Justice Department's indictment of Sam Bankman-Fried on Dec. 13, 2022.

Bankman-Fried was also charged with conspiracy to commit commodities fraud, conspiracy to commit securities fraud, and conspiracy to defraud the United States and commit campaign finance violations.

The latter campaign contributions charge was subsequently dropped by the Justice Department in July 2023, due to an extradition agreement with The Bahamas from whence Bankman-Fried had been deported.

Who will testify?

The Justice Department informed presiding Judge Kaplan that it would call up several witnesses for the trial, including former FTX clients, investors and staff.

The U.S attorneys noted that they expected FTX customers who had deposited funds on the defunct exchange to testify regarding their expectations and understanding of the exchange’s deposit policy and the ability to withdraw funds at any time.

Investors that purchased shares in FTX are expected to testify about their expectations of the company being a custodian of user funds as well as the full scope of custodianship in regard to cryptocurrency exchanges.

Lastly, the Justice Department expects cooperating witnesses, who pled guilty to participating in a conspiracy to commit fraud alongside Bankman-Fried, to testify about their interactions with the former CEO, as well as about statements and actions he carried out in the months leading up to the bankruptcy.

Among the cooperating witnesses expected to appear are Wang, FTX engineering director Nishad Singh and Bankman-Friend's ex-girlfriend and former Alameda Research CEO, Caroline Ellison.

How long could SBF be in jail?

According to the Justice Department, Bankman-Fried’s alleged crimes carry significant prison time.

The counts of wire fraud conspiracy, wire fraud, and money laundering all carry a maximum sentence of 20 years. Meanwhile, charges of conspiracy to commit commodities fraud, conspiracy to commit securities fraud and conspiracy to defraud the United States carry five-year maximum sentences.

According to CNN, the 30-year-old could face over 100 years in prison if he is found guilty of a multitude of charges brought against him by the U.S. government.

Biggest fraud case in U.S. history?

Legal experts have already suggested that Bankman-Fried’s trial could signify one of the most significant fraud cases in U.S. history. $8.9 billion of customer deposits and investor funds went missing in the wake of FTX’s collapse, while an estimated $7.3 billion of liquid assets have since been recovered through bankruptcy proceedings.

Bernie Madoff arguably remains the most enigmatic fraud case in America, as the recent rendition of his $19 billion Ponzi scheme in a Netflix documentary highlights the grand scale of his influence and shadowy scheme.

While Bankman-Fried may not have caused as significant a level of financial harm as Madoff, his own image and that of FTX’s brand as a visibly active cryptocurrency proponent has thrust the story into the spotlight as a modern-day parallel of the late Madoff’s 17-year fraud.

Bankman-Fried also became involved in the U.S. political landscape, donating over $40 million to democratic committees and candidates in 2022. The former FTX CEO reportedly even considered paying Donald Trump $5 billion to not run for president in the United States, according to author Michael Lewis's upcoming biography.

Bankman-Fried maintains his innocence, having pleaded not guilty to all charges brought against him in Aug. 2023.

Magazine: Blockchain detectives: Mt. Gox collapse saw birth of Chainalysis

DOJ readies witnesses in Bankman-Fried trial, spotlight on FTX assets

October 1, 2023 Coin Telegraph

Coin Telegraph

This initiative also encompasses their comprehension of Sam Bankman-Fried's remarks and conduct, particularly regarding FTX's asset management.

The Department of Justice (DOJ) has affirmed its plan to summon former FTX clients, investors, and staff as witnesses in the upcoming trial involving Sam Bankman-Fried, the former FTX executive. This will shed light on how these individuals viewed their interactions with Bankman-Fried and his company.

The DOJ submitted a letter motion in limine on Sept. 30, to enable them to get the interpretation of the witnesses on FTX’s treatment of customer assets, which will hold significant importance.

Importantly, these testimonies are intended to provide valuable perspectives on the interactions between the accused and these witnesses. This initiative also encompasses their comprehension of Bankman-Fried's remarks and conduct, particularly regarding FTX's asset management. The DOJ intends to emphasize the experiences of both retail and institutional clients who entrusted substantial assets to FTX with the belief that the platform would safeguard them securely.

*Court filing in the U.S. District Court for the Southern District of New York. Source: CourtListener*

Furthermore, a distinctive situation has emerged concerning one of the DOJ's witnesses, referred to as "FTX Customer-1," who resides in Ukraine. Given the ongoing conflict, there are difficulties associated with traveling to the United States to provide testimony. Consequently, the DOJ has suggested using video conferencing as a viable alternative. However, Bankman-Fried's defense has not yet approved this proposal.

Nonetheless, the legal team representing Bankman-Fried, led by lawyer Mark Cohen, has voiced concerns about the jury questions put forth by the DOJ. According to Bankman-Fried’s defense, these interrogations insinuate guilt on Bankman-Fried's part, potentially undermining the principle of "innocent until proven guilty."

Additionally, the defense contends that these inquiries may not effectively uncover the jurors' inherent biases, especially if related to their personal encounters with cryptocurrencies. Moreover, certain questions could inadvertently guide the jury's perspective instead of eliciting authentic insights, possibly compromising the trial's impartiality.

With the jury selection scheduled to start on Oct. 3, closely followed by the trial, the spotlight is firmly on this high-stakes legal confrontation. This case underscores not only its immediate consequences but also underscores the vital importance of transparent communication and unbiased questioning in upholding the principles of justice.

Magazine: Deposit risk: What do crypto exchanges really do with your money?

Industry leaders and policymakers weigh in on a potential US gov’t shutdown

September 29, 2023 Coin Telegraph

Coin Telegraph

A U.S. government shutdown was not inevitable, but even if one were to last for a matter of hours or days, lawmakers' priorities on their return may not be digital assets.

The United States House of Representatives has rejected a bill passed on by the Senate aimed at funding the government, and Speaker Kevin McCarthy’s proposals have so far failed to gain traction with far-right lawmakers in the House — all actions suggesting that the U.S. government is heading toward at least a partial shutdown starting on Oct. 1.

A U.S. government shutdown, which occurs when Congress fails to pass legislation for funding for the next fiscal year, would effectively stop all federal agencies and departments from doing anything considered “non-essential”. Even if the shutdown were to only be a matter of hours — one in February 2018 lasted less than a day — crypto bills may take a backseat to other policies among lawmakers once activities resume.

Bills for the good or ill of digital assets would be halted amid a shutdown, and financial regulators including the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission would be running on a skeleton crew. Following a 2019 shutdown, Cointelegraph reported SEC officials had limited capabilities for enforcement and oversight.

“[I]n the aftermath of a shutdown, it is unclear what issues will rise to the top of the priority list in terms of gathering Congressional interest,” Sheila Warren, CEO of the Crypto Council for Innovation told Cointelegraph. “Apart from funding the government, Congress faces a number of statutory deadlines which will require additional legislative action before the end of the year.“

In July, lawmakers with the House Financial Services Committee voted to pass the Financial Innovation and Technology for the 21st Century Act (FIT), the Blockchain Regulatory Certainty Act, the Clarity for Payment Stablecoins Act and the Keep Your Coins Act. Should a shutdown occur, no action can be taken on these crypto-focused bills — no amendments, no floor votes.

Warren suggested that congressional priorities could easily shift from crypto to any number of issues arising amid the shutdown, and there will likely be additional distractions as the 2024 elections approach. Treasury Secretary Janet Yellen also voiced her opposition to “House Republicans’ failure to act” in a Sept. 29 speech, claiming a shutdown was “dangerous and unnecessary” and could “cause economic headwinds” in the future.

If we have a government shutdown, a lot of vital work in science and health could be impacted—from cancer research to food safety.

The American people need House Republicans to do their job: fund the government.
— Joe Biden (@JoeBiden) September 28, 2023

Prior to any bills being put forward in the House, many Democratic members of the House Financial Services Committee staunchly criticized Republicans at a Sept. 27 hearing, though the focus was intended to be on oversight of the SEC. Virginia Representative Don Beyer was one of the few Democrats pushing a crypto-related bill amid concerns over government funding, but lawmakers will be unlikely to address the legislation before Oct. 1.

“It is seeming more and more likely there will be a shutdown with the fractured House [Republican] divisions and Senate going in their own direction,” said the Blockchain Association director of government relations Ron Hammond on a Sept. 25 X thread. “For crypto the longer the shutdown goes on, the more various bills including FIT/market structure and stables get pushed.”

At the time of publication, the price of Bitcoin (BTC) had dropped below $27,000 but did not appear to be correlated with any news of congressional spending bills or the SEC moving ahead of schedule on delaying decisions for spot Bitcoin exchange-traded funds. In contrast, the price of Ether (ETH) moved above the $1,600 level in the last 3 days as firms announced their intention to launch ETFs tied to Ether futures the first week of October.

Magazine: US gov’t messed up my $250K Bitcoin price prediction: Tim Draper, Hall of Flame

Invesco Galaxy applies for spot Ether ETF

September 29, 2023 Coin Telegraph

Coin Telegraph

Investment firms Invesco and Galaxy Digital allegedly filed for a spot Ethereum ETF with the U.S. SEC on Sept. 29.

Asset managers keep pursuing digital asset products, with Invesco and Galaxy Digital allegedly filing for a spot Ether (ETH) exchange-traded fund (ETF) on Sept. 29.

Bloomberg ETF analyst James Seyffart disclosed the filing on X (formerly Twitter), even though the application hadn’t been uploaded to the SEC’s public database at the time of writing.

Invesco Galaxy just filed for a spot Ether ETF, I think this is the 3rd of 4th one of these, have to check tho.. pic.twitter.com/SIJVu8VzFk
— Eric Balchunas (@EricBalchunas) September 29, 2023

A spokesperson for Invesco declined to confirm the application, stating that products still being registered cannot be commented on. Cointelegraph reached out to Galaxy but did not immediately receive a response.

With the Sept. 29 filing, Invesco and Galaxy join a growing line of investment managers seeking regulatory approval for a spot ETH ETF. On Sept. 27, the SEC delayed decisions on previous applications from ARK 21Shares and VanEck, extending the deadline until Dec. 25–26. “The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein,” said the SEC.

Although a spot Ether ETF may not be available for a while, futures-based Ether ETFs should be available as soon as next week. On Sept. 28, investment firms started gearing up to add ETH futures vehicles to their portfolios. VanEck, for instance, published a statement about its upcoming Ethereum Strategy ETF — tickered EFUT — which will be listed on the Chicago Board Options Exchange in the coming days.

Another company debuting a futures crypto ETF is Valkyrie. The asset manager will begin offering exposure to Ether futures through its existing Bitcoin Strategy ETF, now rebranded as Valkyrie Bitcoin and Ether Strategy ETF. A Valkyrie spokesperson told Cointelegraph that the firm’s Bitcoin Strategy ETF will allow investors access to Ether and Bitcoin (BTC) futures “under one wrapper.”

Likewise, Bitwise submitted an updated prospectus for their equal-weight Bitcoin and Ether futures ETF on Sept. 28, which is also expected to go live next week. According to Seyffart, Proshares also applied and Kelly ETFs partnered with Hashdex to deliver futures Ether ETFs in the coming days.

Ether is trading in the green at the time of writing at $1,666, driven by euphoria over the debut of futures ETFs.

Magazine: Are DAOs overhyped and unworkable? Lessons from the front lines

3AC’s Su Zhu arrested in Singapore

September 29, 2023 Coin Telegraph

Coin Telegraph

Su Zhu was arrested at Singapore Changi Airport while attempting to leave the country after a court granted a committal order.

The co-founder of Three Arrows Capital (3AC), Su Zhu, was arrested in Singapore when attempting to leave the country, Cointelegraph has learned from Teneo, the joint liquidator of the bankrupt hedge fund.

In a statement, Teneo announced that Zhu “was apprehended at Changi Airport whilst attempting to travel out of Singapore following a committal order granted by the Singapore Courts against him.“

A committal order is used to send someone to prison for contempt of court. On September 25, Teneo was granted its committal request in Singapore, claiming Zhu failed "to comply with a court order".

The investigation is related to efforts to recover funds for creditors of 3AC. The $10 billion hedge fund collapsed in 2022 following the implosion of the Terra ecosystem. 3AC had excessive leverage on long positions across a sort of cryptocurrencies, and borrowed hundreds of millions of dollars from crypto lending protocol.

Since its failure, co-founders Zhu and Kyle Davies have been on the run from liquidators, although very active on social media. The committal order granted in Singapore sentenced Zhu to four months’ imprisonment. A similar committal order was granted against Davies, said Teneo.

"As a result, Mr Zhu will be held in prison to serve his sentence of 4 months under the committal order, during which time the liquidators will seek to engage with him on matters relating to 3AC, focusing on the recovery of assets that are either the property of 3AC or that have been acquired using 3AC’s funds. The liquidators will pursue all opportunities to ensure Mr Zhu complies in full with the court order made against him for provision of information and documents relating to 3AC and its former investment manager during the course of his imprisonment and thereafter, and may make applications for further court orders as required."

Davies’ whereabouts remain unknown. The Monetary Authority of Singapore prohibited Zhu and Davies from conducting regulated investment activity for nine years each.

Magazine: Are DAOs overhyped and unworkable? Lessons from the front lines

CoinShares says US not lagging in crypto adoption and regulation

September 29, 2023 Coin Telegraph

Coin Telegraph

CoinShares, a provider of crypto exchange-traded products in Europe, is optimistic about spot Bitcoin ETFs in the United States.

European cryptocurrency investment firm CoinShares is optimistic about cryptocurrency regulation in the United States as the firm enters the new market.

On Sept. 22, CoinShares officially announced the launch of its new division, CoinShares Hedge Fund Solutions, marking the first time the firm introduce its offerings to qualified U.S. investors.

CoinShares’ entrance into the U.S. market comes at a time when many U.S. crypto firms are looking at expanding their businesses outside the country due to regulatory hurdles at home. One such firm, cryptocurrency exchange Coinbase, has been actively pushing expansion in Europe and the United Kingdom amid facing a lawsuit from the U.S. Securities and Exchange Commission over an alleged violation of securities laws.

Many crypto industry observers and participants have claimed that the U.S. government's approach to crypto regulation has been making the country “less attractive” for crypto firms.

But unlike many U.S. crypto regulation critics, CoinShares believes that the U.S. is a global leader in terms of digital asset development, a spokesperson for CoinShares told Cointelegraph, stating:

“Contrary to the belief that the U.S. lags in crypto adoption and regulation, our perspective is shaped by the U.S. regulators' approach to treating digital assets akin to traditional asset classes. This stance, we believe, will encourage and expedite the fusion of the two industries.”

CoinShares’ representative went on to say that the U.S. is home to 50% of globally managed assets and is a dominant financial market. “Our assertion on its leadership in the digital assets space is influenced by observable integrations between legacy and emerging financial players,” the spokesperson said, citing industry collaborations of BlackRock with Circle and Coinbase.

The expansion of CoinShares in the U.S. comes just a few months after CEO Jean-Marie Mognetti in July 2023 declared that Europe’s approach to crypto has been “even more problematic when compared to the financial might of U.S. institutions.”

“These financial behemoths — such as BlackRock and Fidelity, who each announced recently the filing of a spot Bitcoin ETF — are well-positioned to provide widespread crypto exposure,” Mognetti wrote in an op-ed a few months ago.

But while being specifically bullish about the crypto regulatory climate in the United States, CoinShares continues to be loyal to Europe. “CoinShares remains committed to Europe; our HFS is registered both in the U.S. and the United Kingdom,” the spokesperson for the firm told Cointelegraph, adding:

“Our perspective stems from the observation that in the US, there is a more apparent merging of traditional finance — TradFi — and crypto, which isn't as pronounced in Europe where the two sectors aren't as interconnected.”

One of the world’s largest crypto investment firms, CoinShares is a major provider of crypto exchange-traded products or ETPs. The firm debuted its first Bitcoin (BTC) exchange-traded product (ETP) in 2015. CoinShares is yet to disclose whether it plans to join the spot Bitcoin ETF race in the United States, though.

“We must adhere to strict regulations regarding the disclosure of forward-looking information. Therefore, we cannot provide specific details on CoinShares' future product launches,” CoinShares representative stated. CoinShares has been registered with the SEC as an exempt reporting adviser, with CoinShares Limited acting as general partner for the private investment funds created by CoinShares Hedge Fund Solutions.

Magazine: Magazine: Blockchain detectives — Mt. Gox collapse saw birth of Chainalysis

United States

What happened to FTX?

Seven counts

Who will testify?

How long could SBF be in jail?

Biggest fraud case in U.S. history?

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