Read in the Digest:
- SEC rejects spot bitcoin ETF proposal—Grayscale answers with lawsuit.
- Bitcoin (BTC) dips below $19,000 – Deutsche Bank predicts $28k 2022 end.
- British Virgin Islands court orders Three Arrows to liquidate.
- Cardano submits Vasil hard fork proposal – network upgrade countdown commences.
- Coinbase renews Europe expansion plans – EU sets AML rules for crypto.
SEC Rejects Spot Bitcoin ETF Proposal—Grayscale Answers with Lawsuit
On Wednesday, June 29th, the U.S. Securities and Exchange Commission (SEC) rejected the proposal to launch a Bitcoin Spot ETF. In October 2021, Grayscale its announced plans to convert its bitcoin trust (GBTC), into a bitcoin exchange-traded fund (ETF).
The SEC says Grayscale’s proposal did not meet standards to prevent fraudulent and manipulative market practices. The SEC listed wash trading, whale manipulation, exchange and network hacking, and stablecoin manipulation as some of the manipulative practices risked.
In response to the rejection of its Bitcoin ETF proposal, Grayscale revealed that it had submitted a “petition for review” against the SEC. The lawsuit was filed with the United States Court of Appeals for the District of Columbia.
Grayscale CEO Michael Sonnenshein wrote that the firm was “deeply disappointed”, and vehemently disagrees with the SEC’s decision to reject the proposal. He also alleges that the SEC has violated the ‘Administrative Procedure’ and ‘Securities Exchange’ Acts.
- The European market has become more favorable, with Jacobi Asset Management announcing that it would be launching Europe’s first bitcoin ETF on the Euronext exchange
Why You Should Care
With analysts stating that the SEC has failed to “apply consistent treatment to similar investment vehicles,” Grayscale is taking to court, seeking the potential reversal of the decision.
Bitcoin (BTC) Dips Below $19,000 – Deutsche Bank Predicts $28k 2022 End
Despite showing promising signs of recovery throughout the last week, the price of Bitcoin (BTC) has ruptured its support zone, dipping below $19,000. The recent development marks the fourth time Bitcoin has dipped below $20k in June.
The 7 day price chart for Bitcoin (BTC). Source: CoinMarketCap
Bitcoin has taken a hit of ∼5% over the last 24 hours, as its price fell to as low as $18,993.40. The latest decline comes amidst rumors of Three Arrows Capital’s liquidation, the rejection of the Bitcoin Spot ETF, and the ever-present concerns over inflation.
The 24 hour price chart for Bitcoin (BTC). Source: CoinMarketCap
Regardless of the irksome downtrend, Deutsche Bank, a German multinational investment bank, has predicted that the price of Bitcoin could recover and trade as high as $28,000 by the end of 2020.
Deutsche Bank believes that Bitcoin’s strong correlation with the stock market, especially the Nasdaq 100, is likely to spur its recovery to $28k. With Bitcoin losing its title of ‘digital gold’, the bank now sees the leading crypto as a ‘digital diamond’.
- Despite the seemingly unending market decline, Michael Saylor-led MicroStrategy has acquired additional bitcoin worth $10 million.
The British Virgin Islands Court Orders Three Arrows to Liquidate
Singapore-based crypto-focused hedge fund Three Arrows Capital Ltd. has received a liquidation order from a British Virgin Islands court. The demand came on Wednesday, June 29th, after creditors sued the cryptocurrency hedge fund for its failure to pay back its debts.
According to reports, the court has appointed two executives, senior managing directors Russell Crumpler and Christopher Farmer of global advisory firm Teneo, to help manage the liquidation of the assets.
Insider reports that Teneo plans to launch a website in the coming days to enable 3ACs potential creditors to submit claims and obtain more information about insolvency. 3AC’s asset holdings will then determine the period over which its obligations will be settled.
The liquidation order comes after Voyager Digital served 3AC a default notice on Monday, June 27th, for failing to repay a $665 million loan.
- The liquidation order contradicts 3AC’s recent claims that the firm was resolving its issues, and looking into potentially selling assets or accepting bailouts from other firms to repay its debts.
Why You Should Care
The liquidation of Three Arrows Capital is a direct result of the ongoing crypto winter, and the loss of its investment of more than $200 million in Luna as a result of its implosion.
Cardano Submits Vasil Hard Fork Proposal – Network Upgrade Countdown Commences
In addition to submitting the update proposal to hard fork the blockchain’s testnet, IOG, the lead developer behind the Cardano blockchain, also commenced the countdown for the upcoming mainnet upgrade.
Last week, IOG released Cardano node 1.35.0, the final candidate for the update. With over 75% of stake pool operators now onboard, IOG has secured a sufficient level of chain density to move forward with the Vasil testnet.
IOG has set the end of July for the expected deployment the Vasil hard fork on the Cardano mainnet. The developers have stressed the need to ensure that Vasil’s rollout is “safe and secure.”
- Despite being primed for a huge rally following the launch of Vasil, on-chain analysis has revealed a huge decline in Cardano’s ADA token.
Why You Should Care
Cardano’s previous hard fork, Alonzo, introduced smart contract functionality, while Vasil looks to improve the network at a fundamental level by increasing throughput – the blockchain’s efficiency.
Coinbase Renews Its Europe Expansion Plans – EU Set AML Rules for Crypto
Coinbase, the largest U.S. based cryptocurrency exchange, is looking to expand its reach outside of the United States, and has applied for regulatory approval from various European countries.
Vice President of Coinbase Nana Murugesan said, as part of an interview in London, that the exchange is focusing its efforts on taking a portion of the European market. Coinbase is seeking licensing in countries like Spain, France, Italy, and the Netherlands.
Murugesan added that the exchange recently hired its first employee in Switzerland, and is already registered in the UK, Germany, and Ireland. Coinbase also intends to have retail and institutional products offerings in each of these markets.
- On Wednesday, June 29th, the European Council announced the launch of a dedicated ‘Anti-Money Laundering Authority’, or ‘AMLA’. The body will supervise designated crypto asset service providers, or ‘CASPs’.
- European Parliament member Ernest Urtasun remarked that the rules wouldn’t apply to P2P transfers, where no obliged entity is involved.
Why You Should Care
For Coinbase to successfully set up shop in these countries, the exchange must adhere to the growing number of crypto regulations being put in place by local authorities across the continent.