Here are the people who will get rich
Coincident Investment Banking: A Case Study of Sam Bankman-Fried and the Enforcement of Anti-Money-Laundering Laws
The U.S. government soon after announced a multibillion-dollar settlement with Binance and its founder, CZ, who pleaded guilty to violating anti-money-laundering laws.
The US Department of Justice won its case against disgraced tech mogul SamBankman-Fried who is expected to be sentenced in March.
The account at the SEC had been compromised, and the commissioners didn’t make a decision. X’s safety team confirmed the account was hacked hours later because it did not have two-factor verification enabled.
A selection of financial institutions, including household names like Fidelity, have been given permission by the US Securities and Exchange Commission to offer spot bitcoins exchange-traded funds. The approval comes after a peculiar incident on January 9, in which a hijacker used the agency’s X account to announce the ETFs prematurely, leading to market chaos and forcing the SEC to publish a retraction.
It continued to rise after the Federal Reserve’s latest estimate of the economy was published at the end of December. When interest rates are lower, investors are more comfortable making riskier bets.
U.S. Says Yes to New Bitcoin Funds, paving the way for More Americans to Buy Crypto: A Response to Markovich’s Concerns
The company has operated a different kind of investment product, called a bitcoin trust, and it had asked the SEC for permission to convert that into an ETF. The judge ruled that the SEC’s decision to reject the application was unfair.
In August, the crypto industry became more optimistic regulators would approve a spot bitcoin ETF after the investment firm Grayscale won a victory in a federal appeals court.
In the years since, the crypto world has evolved and expanded, and the SEC conceded companies had adequately responded to many of Blass’ questions. Regulators were worried about the potential for market manipulation.
“There are a number of significant investor protection issues that need to be examined before sponsors begin offering these funds to retail investors,” she wrote.
According to Henry Hu, who teaches banking and finance at the University of Texas Law School, the involvement of these big investment firms will burnish the perception of cryptocurrencies.
“We’re finally at the point where the regulator is willing to give us clear guidance in terms of what’s legal and what’s not,” says Sarit Markovich, a professor in the Kellogg School of Management at Northwestern University.
The SECRegulatesETFs and that is a big reason why Wednesday’s decision is so significant. The SEC’s imprimatur is very important, and so is regulatory clarity.
Using Cryptocurrencies to Transform Blockchains and Bitcoins: A Case Study on the SEC’s Bang-Up and the Impact of Wall Street Crises
“If you lose your private key to any of your holdings, you won’t be able to sign up or manage a wallet,” he says. It will get the digital currency into more people’s hands.
According to Bryan Armour, director of passive strategies research for North America at Morningstar, these new funds are going to be seen as a safer way to buy and sell cryptocurrencies.
“In the case of virtual currency, it’s difficult to learn how to use it and how to store it on your own,” he says. People are still uncomfortable with technology and want to invest in it. It’s the best method to do that.
In recent years, sites like Coinbase and Kraken have made it easier for people to buy and sell bitcoin and other cryptocurrencies. But according to McClurg, there are still big barriers to entry.
He said it gives them the opportunity to invest in a regulated, structured security. The SEC approved several applications.
The enormous run-up has come on the heels of a number of bad headlines, including the successful prosecution of one of the largest players in the field, and the long list of investors and executives targeted by law enforcement.
Stellar Asset Management in Spot Bitcoin ETFs: The Case of a Globally Distributed Trading Platform and an ETF Associated with Its Custodian
At launch, a small group of service providers will share a space with the issuers of the spot Bitcoin ETFs. Both exchanges will provide custody services for most of the new ETFs. Only JPMorgan, Cantor Fitzgerald, Virtu Financial, and Jane Street, all multinational financial services firms, have signed on as APs to date.
A new breed of financial product that will give people the ability to invest in bitcoins through their broker for the first time, has been approved by the US regulators.
The arrival of the spot bitcoin ETFs has been celebrated among investors as a source of new demand for the asset—now available in a more accessible format—that could push up the price. Yet a significant portion of the financial upside will be captured behind the scenes, not in the open market.
The ETF issuers will take a management fee, as a percentage of the sum people invest. One layer deeper, though, another subset of companies—intermediaries that provide the plumbing necessary for a spot bitcoin ETF to function—stand to earn big. These firms are responsible for storing bitcoin on behalf of the issuers, as appointed custodians, or creating new ETF shares and cashing in existing ones, in the case of authorized participants, or APs. The job of a market maker is to ensure that trades are fair and smooth in the public market.
The pool of firms that perform these trading-related functions is limited, says James Seyffart, ETF research analyst at Bloomberg Intelligence, partly because of the amount of cash required to deal with large quantities of assets flowing in and out the door. With respect to custody, the Venn diagram of willing and qualified candidates is restricted further by the challenges of handling Bitcoins, which sits on different technical rails than regular shares. “It’s a whole different area,” says Seyffart.
