BITCOIN, BLOCKCHAIN

CBOE Withdraws VanEck Bitcoin Exchange-Traded Fund Proposal

The Chicago Board Options Exchange’s (CBOE) BZX Equity Exchange withdrew its bitcoin exchange-traded fund (ETF) proposal before the U.S. Securities and Exchange Commission (SEC) on Tuesday.

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The SEC published a notice confirming the application withdraw for the VanEck/SolidX bitcoin ETF.

The SEC had already delayed their decision but faced a new final deadline of Oct. 18 to either approve or deny the recently withdrawn proposal. No explanation was given regarding the decision.

Gabor Gurbacs
Gabor Gurbacs

“We are committed to support Bitcoin and Bitcoin-focused financial innovation,” stated Gabor Gurbacs, Director of Digital Asset Strategies at VanEck.

“Bringing to market a physical, liquid and insured ETF remains a top priority. We continue to work closely with regulators & market participants to get one step closer every day.”

VanEck Associates CEO, Jan Van Eck, stated the company has financial products with exposure to bitcoin, but the products are not currently available to the public.

The VanEck SolidX Bitcoin Trust 144A Shares product will trade over-the-counter and not on a national securities exchange.

The new trust has only garnered the support of a total evaluation of roughly 4 BTC since its launch in the beginning of September.

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BITCOIN, BLOCKCHAIN

Van Eck, SolidX Begin Bitcoin ETF-Like Product to Institutional Investors

Van Eck Securities Corp. and SolidX Management LLC will begin selling shares in a limited version of a bitcoin exchange-traded fund (ETF).

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The latest move is an attempt to mature and regulate the cryptocurrency sector to attract mainstream investors.

The companies will implement a rule exempting the shares from securities registration but will allow investors to sell their shares to certain institutional buyers.

The Securities and Exchange Commission (SEC) has so far rejected every attempt to sell a bitcoin ETF.

The SEC believes the cryptocurrency markets do not have enough protections against fraud and market manipulations.

The new limited shares will be sold under the SEC’s Rule 144A, allowing the sales of privately placed securities to “qualified institutional buyers.”

Van Eck and SolidX applied for a bitcoin ETF in 2018 and expects an eventual approval.

The company hopes this limited version will prove to the SEC that a bitcoin ETF can work.

According to research firm XTF, ETF’s have grown into a $3.9 trillion market.

Most in the crypto community believe an approved ETF would make it easier for mainstream investors to buy cryptocurrencies.

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BLOCKCHAIN

U.S. SEC Charges Russian ICO Rating Company Over Alleged Violations

The Securities and Exchange Commission announced today that Russian entity ICO Rating has agreed to pay $268,998 to settle charges that it failed to disclose payments received from issuers for publicizing their digital asset securities offerings.

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“The securities laws require promoters, including both people and entities, to disclose compensation they receive for touting investments so that potential investors are aware they are viewing a paid promotional item,” said Melissa Hodgman, Associate Director of the SEC’s Enforcement Division.

“This requirement applies regardless of whether the securities being touted are issued using traditional certificates or on the blockchain.”

The SEC’s order found that between December 2017 and July 2018, ICO Rating produced research reports and ratings of blockchain-based digital assets, including “tokens” or “coins” that were securities, and published this content on its website and on social media.

ICO Rating billed itself as “a rating agency that issues independent analytical research,” and stated that its mission is “to help the market achieve the necessary standards of quality, transparency and reliability.”

However, ICO Rating failed to disclose that it was paid by certain issuers whose ICO offerings it rated.

The SEC’s order finds that ICO Rating violated the anti-touting provisions of Section 17(b) of the Securities Act of 1933.

Without admitting or denying the SEC’s findings, ICO Rating agreed to cease and desist from committing or causing any future violations of these provisions, to pay disgorgement and prejudgment interest of $106,998, and a civil penalty of $162,000.

The SEC’s investigation was conducted by J. Ashley Ebersole and Louis J. Gicale, Jr., in the SEC’s Washington, DC Office and supervised by Melissa Robertson.

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BITCOIN, BLOCKCHAIN

U.S. SEC Delays Three Bitcoin ETF Decisions

The U.S. Securities and Exchange Commission (SEC) has delayed its decision regarding three bitcoin exchange-traded fund (ETF) proposals.

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The three ETF’s provided by Wilshire Phoenix, VanEck/SolidX, and asset managers Bitwise Asset Management were published in the Federal Register in February and June, allowing regulators the legally mandated 240 days to make a decision.

The Wilshire Phoenix ETF decision is scheduled for Sept. 29.

Final decisions regarding the Bitwise and VanEck/SolidX ETF’s are projected to be announced by Oct. 13 and Oct. 18 correspondingly.

U.S. regulators have not yet approved any bitcoin ETF’s over fears of market manipulation, and potential divergence with futures trading.

Recently, Bitwise published reports to perused regulators that regulations and surveillance of bitcoin is increasing.

According to Bitwise, the bitcoin market is “extremely efficient” after removing data on wash trading and fake volume.

The SEC has received reassurance for Bitwise’s ETF proposal from more than 30 industry leaders, including Blockchain Capital’s Spencer Bogart, Castle Island Ventures’ Matthew Walsh, Coinbase Custody’s Sam McIngvale, and the Blockchain Association’s Kristin Smith.

Founded in 2017, Bitwise Asset Management pioneered the first cryptocurrency index fund and is the leading provider of rules-based exposure to the crypto asset space.

Based in San Francisco, the team combines modern software expertise with decades of asset management experience – coming from firms including Facebook, Wealthfront, BlackRock, NYLife Investments, IndexIQ, US Commodity Funds, Goldman Sachs, JPMorgan, and ETF.com.

The firm’s advisors and backers have experience as investors, executives, and board directors at companies including PayPal, BlackRock, Square, Coinbase, Stripe, Western Asset, Royal Bank of Scotland, Chain, Twitter, Palantir, and McKinsey.

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ALTCOIN, BLOCKCHAIN

U.S. SEC Files Lawsuit Against Kik’s 2017 ICO

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against messaging mobile application Kik for allegedly operating an unregistered securities sale during its 2017 initial coin offering (ICO) of its kin token.

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“By selling $100 million in securities without registering the offers or sales, we allege that Kik deprived investors of information to which they were legally entitled, and prevented investors from making informed investment decisions,” said Steven Peikin, co-director of the SEC’s Division of Enforcement.

“Companies do not face a binary choice between innovation and compliance with the federal securities laws.”

According to the SEC, Kik had reported losses for years. The company’s management predicted internally that it would run out of money in 2017.

The company’s average losses totaled about $30 million a year.

Kik sold its kin token to the public, with discounts available to larger purchases, raising more than $55 million from U.S. investors.

The SEC alleges the tokens traded recently at approximately half of the value public investors purchased them for during the ICO.

Last month, Kik CEO Ted Livingston stated the company had already spent $5 million, later launching a “Defend Crypto” crowdfunding campaign, raising $5 million to support a possible lawsuit.

In a statement Tuesday, Livingston said:

“This is the first time that we’re finally on a path to getting the clarity we so desperately need as an industry to be able to continue to innovate and build things.”

The price of the kin token has fallen more than 25 percent after the lawsuit’s announcement.

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