Bitwise Bitcoin ETF
The U.S. Securities and Exchange Commission (SEC) has delayed its decision on the Bitwise exchange-traded fund (ETF) proposal filed with NYSE Arca. According to the new filing,
“On March 29, 2019, pursuant to Section 19(b)(2) of the Act, the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to approve or disapprove the proposed rule change.”
This marks yet another delay by the SEC which has yet to approve any Bitcoin ETFs. Initially submitted in January of 2019, the Bitwise ETF would have become, if approved, the first regulated crypto ETF by the SEC.
The SEC remains open to input from the public and invites more comments, after having received 25 comments following the Commission’s most recent request in March.
“The Commission is publishing this notice and order to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons and to institute proceedings pursuant to Section 19(b)(2)(B) of the Act to determine whether to approve or disapprove the proposed rule change, as modified by Amendment No. 1.”
The filing notes that unreliable crypto trading volumes fuel an inefficient view of the marketplace.
“Unfortunately, in practice, many perceive that the market for bitcoin as disorderly and inefficient, with many unregulated operators running crypto ‘exchanges’ from unknown domiciles.”
The SEC specifically asks the public to comment on Bitfinex and how it believes the recent controversy has affected the market.
“The Exchange represents that, as of April 26, 2019, the Bitwise Crypto Index Committee removed Bitfinex from the list of trading venues that contribute prices to derive the Bitwise Daily Bitcoin Reference Price. The Exchange states that this action was taken ‘pursuant to the New York Attorney General’s claims towards iFinex Inc., operator of Bitfinex.’
What are commenters’ views on whether the removal of Bitfinex—which the Sponsor asserts is a ‘real’ trading venue—from the calculation of the Bitwise Daily Bitcoin Reference Price might affect the reliability or accuracy of that price? Does the removal of the Bitfinex venue from the calculation of this reference price because of regulatory or legal activity affect commenters’ views of the Sponsor’s screening process for bitcoin trading venues or its general distinction between ‘real’ and ‘fake’ bitcoin trading volume? Does the removal of the Bitfinex venue from the calculation of this reference price affect commenters’ views of whether it is appropriate to use the Bitwise Daily Bitcoin Reference Price to calculate the net asset value of the Shares?
Comments are open for the three weeks after the Bitwise ETF document is published in the Federal Register. You can submit your comment here. Comments will be posted here.
BitGo
Palo Alto-based BitGo, a security and custody solutions company holding roughly $2 billion in crypto for its clients, has announced a new service for institutional investors. It will now provide an off-chain settlement and clearing system to minimize the risks associated with trading and moving large volumes of crypto assets.
Given the number of security breaches in the industry, including the most recent high-profile hack of leading cryptocurrency exchange Binance, which sustained losses of roughly $40 million in Bitcoin, BitGo’s new service aims to tackle a major pain point that is reportedly keeping big investors at bay.
Speaking at the blockchain industry expo Consensus in New York about the on and off-chain settlement and security dilemma facing market participants, BitGo CEO Mike Belshe says,
“Until now, in a digital asset trade, one party needed to assume all of the risk and act on the counter-party’s good faith, and this doesn’t really work for institutional investors. We are bringing to market a risk-less, efficient and compliant digital asset clearing and settlement.”
Acting as a middleman during the transaction, BitGo will serve as the custodian for both sides. Its new service is designed to secure and ensure the transfer of crypto assets, reducing counterparty risk. The service addresses the same bridge that upcoming crypto platform Bakkt is aiming to navigate for institutional investors. Bakkt, however, has been hit with a series of delays as it seeks regulatory approval with the Commodity Futures Trading Commission.
BitGo will offer the service to existing clients, primarily exchanges, asset managers, broker-dealers and OTC trading desks. The company currently includes among its clients Craft Ventures, Digital Currency Group, DRW Ventures, Galaxy Digital Ventures, Goldman Sachs, Redpoint Ventures and Valor Equity Partners.
eToro
The social trading platform eToro is adding two new stablecoins pegged to gold and silver to its crypto asset exchange eToroX.
The coins are called eToro Gold (GOLDX) and eToro Silver (SLVX). According to eToro CEO Yoni Assia, reliable stablecoins are key to the future of the crypto market.
“One of the key obstacles that cryptoassets need to overcome for mainstream adoption is price stability. Stablecoins largely eliminate this hurdle, creating a more user-friendly way to interact with the blockchain. By adding eToro Gold and eToro Silver and expanding our fiat-stablecoin range to 10, we are demonstrating the vast potential offered by tokenized assets.”
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