Bitcoin ETF will not be automatically approved due to US government shutdown, says litigation …

Bitcoin [BTC]’s ETF approval has been a long-standing saga plagued with a lot of ups and downs. While proponents of the cryptocurrency have been …

Bitcoin [BTC]’s ETF approval has been a long-standing saga plagued with a lot of ups and downs. While proponents of the cryptocurrency have been trying hard to get it off the ground, the Securities and Exchanges Commission [SEC] of the United States has ensured that the decision remains postponed.

As it stands, the deadline for the decision is February 27, a date that some think will be reviewed because of the ongoing US government shutdown imposed by Donald Trump. Jake Chervinsky, a recognized lawyer and a government enforcement securities litigation attorney, gave his views on the VanEck/SolidX Bitcoin ETF by tweeting:

“The VanEck/SolidX bitcoin ETF won’t be automatically approved just because the US government is shut down. I’ve seen a lot of confusion & misinformation about how the shutdown affects the SEC and its process for handling ETF proposals. I’ll try to explain here.”

Chervinsky stated that the February 27 deadline is imposed by Federal statute, which means that the government shutdown does not affect it all. Being under the federal statute, the current law imposed on the Bitcoin ETF stands if the government functions or not.

He further stated that another power of the statute is prohibiting the SEC from changing the deadline in any capacity. This caveat theoretically implies that if left undecided, the Bitcoin ETF gets automatically approved.

The lawyer went on to say that such a situation was utopian and that the SEC still had a workforce toiling to carry out its stipulated processes. In his words:

“It’s true that the SEC has stopped nearly all of its work due to the shutdown & furloughed most of its employees. That includes the majority of staff members in the Division of Trading & Markets, which handles proposed rule changes.”

He carried on by saying:

“But the SEC still has a small number of staff members available to handle “excepted” functions, which mostly refers to urgent law enforcement matters, but also includes “activities necessary for a short period in order to ensure an orderly shutdown of operations.”

Jake Chervinsky opined that the remaining officials will ensure commodities such as the Bitcoin ETF will be blocked from being automatically approved, pointing to the January event where the SEC extended a deadline related to Nasdaq PHLX.

He stated that in case the Bitcoin ETF gets approved, then there are two things that could happen; either the SEC will let the auto-approval occur because it had already approved it earlier or the remaining workforce in the SEC will not be allowed to function.

Furthermore, Chervinsky thinks that if the government shutdown extends all the way till February 27, the chance of the Bitcoin ETF getting approved is negligible. This statement was based off the SEC’s rule on Page 18, which says:

“The SEC will discontinue “review and approval of applications for registration . . . with respect to new financial products.”

He closed his argument by stating that due to the shutdown, the odds of the Bitcoin ETF getting rejected was much higher than that of it getting approved. Chervinsky also gave his comment on Intercontinental Exchange’s Bakkt by saying:

“Unlike the SEC, the CFTC has no statutory deadline for making a decision on Bakkt, so it can delay as long as it wants. Don’t expect anything on Bakkt until after the shutdown (maybe months after).”

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US Bipartisan Bills: Can the Proposed Regulations Escalate US Crypto Market Growth?

The first bill, U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018, aims at identifying how price manipulation occurs to inform …

By David Drake

The cryptomarket has been experiencing high volatility in recent months. It has also been prone to risks such as scams, fraud, cyber attacks and price manipulation – mostly targeted towards crypto exchanges. Previously, government agencies have explored ways to identify risks related to cryptocurrency use in illegal activities.

At the beginning of 2018, New York Attorney General noted that crypto-exchanges are susceptible to manipulation and lack measures to safeguard consumers from these risks. Consequently, there have been calls for stricter regulation to curb this practice by various stakeholders.

Taking Action

In a bid to curb price manipulation in the cryptocurrency space, legislators introduced two bipartisan bills to the US Congress. The first bill, U.S. Virtual Currency Market and Regulatory Competitiveness Act of 2018, aims at identifying how price manipulation occurs to inform action on ways to prevent further manipulation.

On the other hand, the second bill, Virtual Currency Consumer Protection Act, 2018, seeks to compare crypto regulations in different countries with a view of identifying ways to grow the cryptomarket without stifling innovation in the country. The task of ensuring recommendations would be provided was left to the Commodity Futures Trading Commission (CFTC), which is responsible for regulating the futures markets.

Since regulatory clarity has been lacking in previous years, these bills will be crucial in determining how virtual assets will be handled in future and the response of both businesses and consumers.

Projected Outcome

The congressmen recognize that virtual currencies could promote economic growth in the country if they are properly regulated to safeguard the interests of consumers and investors. For Joseph Oreste, CEO of Qupon, the proposed legislations will go a long way in facilitating mass cryptocurrency adoption in the US.

He says, “I think the best part, about these two bills, is they signal to institutional investors and consumers that government is accepting cryptocurrency and actively looking for ways to contribute to its security and adoption. Creating consumer protections convey to the public that the technology is being monitored for bad actors and is therefore safe for use. Exchanges are the gateway to crypto and therefore a critical infrastructure to the technology. Regulation and oversight signal to institutional investors sufficient safeguards are being put into place to begin investing. The bills are exploratory, however it is another positive step in the right direction.”

By safeguarding stakeholders from risks associated with cryptocurrencies, the proposed legislation will enhance trust among industry players and encourage the innovation required to improve financial sector infrastructure. It is expected that the cryptomarket will become steady that as more countries develop and implement clear regulations on cryptocurrencies extensively.

The ultimate goal is to make the US a leader in the cryptomarket by creating a clear path for cryptocurrencies in future. By improving its support for blockchain and cryptocurrencies, and providing clear regulations, the US is well on its way to providing an environment that will sustain crypto-related activities.

Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.

If you would like to have your company featured in the Irish Tech News Business Showcase, get in contact with us at [email protected] or on Twitter: @SimonCocking

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Crypto-Friendly Lawyer: US Government Shutdown Curbing Bitcoin ETF Prospects

For the VanEck, SolidX, and CBOE Bitcoin exchange-traded fund (ETF), one of the most-awaited industry developments in crypto’s history, the …

U.S. Government Shutdown & Crypto

Twenty-eight days ago, the entirety of the U.S. government partially shut down. Negotiations between the Democrats and Republican incumbents have yet to procure results, and hundreds of thousands, if not millions of federal workers have had to provide governmental services without pay. The situation is getting from bad to worse, but what does that mean for Bitcoin (BTC) and the broader crypto sector?

Well, as the shutdown entered its first week, many crypto optimists began to speculate what that meant for this industry’s proposals to American agencies, like Bakkt’s crypto futures application submitted to the U.S. Commodity Futures Trading Commission (CFTC).

For Bakkt, it was believed that the shutdown was bearish, as the CFTC was a victim to the shutdown. For the VanEck, SolidX, and CBOE Bitcoin exchange-traded fund (ETF), one of the most-awaited industry developments in crypto’s history, the shutdown was interestingly deemed a positive, as some claimed that the venture could get greenlighted by default.

However, a crypto-friendly lawyer, based in Washington, DC, claims that this belief is nothing more than unbridled, overly cheery hope. Jake Chervinsky, a government enforcement defense & securities litigation attorney at Kobre & Kim, broke down his thoughts on the matter via a Twitter thread.

Shutdown Doesn’t Improve Bitcoin ETF’s Chances Of Approval

Chervinsky started his 17-part thread by flat out stating that the shutdown disallows the ETF to be “automatically approved.”

0/ The VanEck/SolidX bitcoin ETF won’t be automatically approved just because the US government is shut down.

I’ve seen a lot of confusion & misinformation about how the shutdown affects the SEC and its process for handling ETF proposals. I’ll try to explain here.

Thread. 👇

— Jake Chervinsky (@jchervinsky) January 18, 2019

The Kobre & Kim attorney, who has gained a large following from Twitter’s crypto zealots, explained that while the U. Securities and Exchange Commission (SEC) is technically shuttered, there’s still a “skeleton crew” that has the authority to make decisions, like the approval or denial of a financial vehicle application. This isn’t speculation either, as Chervinsky noted that just days ago, the SEC issued a deadline extension on a Nasdaq PHLX-related rule change.

So, Chervinsky noted that if the shutdown somehow extends to February 27th, the skeleton crew “should be around to issue an order approving or denying the ETF.” The crypto enthusiast did note that a question remains about what form a verdict will take, speculating that the “order might have less detail than usual.” Anyhow, the American lawyer made it clear that “there’s no reason to think” that the SEC cannot make a proper verdict.

Yet, he did note that if the shutdown continues until late-February, the chance of approval drops to “near-zero,” citing the SEC’s operations plan, which stipulates that the entity cannot review “new financial products” during a government imbroglio. So, in closing, he wrote:

Don’t get me wrong: the ETF could still be approved, especially if the SEC made its decision before the shutdown started. All I’m saying is that the shutdown doesn’t improve the ETF’s chances of approval at all. In fact, the opposite is probably true.

Chervinsky also commented on Bakkt, which has seen its launch pushed back two or three times. Chervinsky noted that since Bakkt’s approval doesn’t have a statutory deadline, the CFTC can continue to stretch out its verdict for months to come.

This recent news comes just after Brian Kelly, the chief executive at BKCM and a CNBC contributor, claimed that a Bitcoin ETF has “no shot” at going through in 2019. In related news, Bitwise Asset Management recently filed a Bitcoin ETF application. Just days prior to the Bitwise development, the Winklevoss Twins, the two behind one of the first, if not the first BTC ETF proposal (which was denied), made it clear that they expect to see such a product through, whether it takes months, years, or even decades.

Title Image Courtesy of Gianmarco Boscaro Via Unsplash

Crypto Executives Wary of Ethereum Futures, As Talks of a Bitcoin ETF Continues to Mount

“The Request For Information (RFI) seeks to understand the real similarities and differences between Ethereum (ETH) and Bitcoin (BTC), along with …

According to reports in mid-December 2018, when the BitcoinFutures offering by CBOE and CME turned a year old, rumors started to swell regarding a similar initiative for theEthereum (ETH) Blockchain. As per the report, the United States. CommoditiesFutures Trading Commission (CFTC) which is the financial regulatory body thatholds jurisdiction over a section of crypto instruments, started to look intoEthereum (ETH). Via press release, the partially crypto-friendly regulatorwrote that:

“The Request For Information (RFI) seeks to understandthe real similarities and differences between Ethereum (ETH) and Bitcoin (BTC),along with Ether’s specific challenges, opportunities, and risks.

Ethereum (ETH) Price Today – ETH / USD

Name Price 24H (%)



As this innocuous development came to light, many crypto analysts, pundits and commentators alikestarted to speculate that the regulatory entity was looking to receive feedback from the Ethereum project that willprecede a ruling on the ETH-supported vehicles.

Chances of ETH Vehicles Going Live This Year 50/50

Recently it would appear that strides have made behindclosed doors. However, other reports claim that the providers of similar products toEthereum futures are skeptical about suchofferings. Paul Chou who serves as the CEO of LedgerX, while speaking in aninterview, explained that there is only a 50/50 chance that the proposed ETHvehicles will go live in 2019.

The executive went on to back his quip by explaining thatmany proposals for this product are “premature,” as was the case with theBitcoin exchange-traded fund applications two years ago.

Staking May Arouse Suspicion Among Regulators

According to Nelson Rosario, who works as an attorney withhands in crypto jars, noted that staking on these ETH products may raisesuspicion in the eyes of regulators. Referencing physically held futures, thecrypto attorney explained that live staking Ether might complicate products and confuse network developers at thesame time.

Based on previous reports CoinFlex a Hong Kong-based cryptostartup backed by Roger Ver-backed islooking into offering a physical Ether futures.When the vehicle would go live wasn’t divulged, but Mark Lamb CoinFlex founder,seemed optimistic, for his firm and what crypto-related derivatives will offerin the future.

Despite the Skepticism Around Ethereum, Talks of aBitcoin ETF Continues to be Hyped

Talk about an Ether futures product comes following anewfound hype for your Bitcoin ETFs. Interestingly, while futures products are regarded as less demanding compared toETFs, analysts believe that more in the latter, the former.

In a recent report,Bitwise Asset Management put out a Bitcoin ETF application to the SEC via anS-1 Form only days after the Winklevoss Twinsfirst proposed a Bitcoin ETF product was deniedby the apex regulatory body.

Only a few days before that incident, Bloomberg sourcesreported that Japanese regulators were considering paving the way for several Bitcoin ETF product proposals being be filed although these claims were madedownplayed by official spokespeople. Nevertheless, whether these reports are tobe believed or not, they accentuate howdiscussions regarding the matter of ETF products continues to make headlinesamid fears of an extended bearish run.

Law enforcement requests sent to Shapeshift, increased by 175% in the second half of 2018

The report Shapeshift stated that typically they receive requests from law enforcement data, including crypto-addresses (or Shapeshift out of it), …

The report Shapeshift stated that typically they receive requests from law enforcement data, including crypto-addresses (or Shapeshift out of it), transaction IDs, identification information (names, emails, IP addresses), cryptocurrency, and other information about crypto-assets. ShapeShift emphasizes that in most cases it is not informed about details of the investigation or research for which you’re requesting data.

The report shows that the Shapeshift received a total of 44 requests for summons in the 3rd and 4th quarters of 2018. The increase was 175 %, compared to 16 in number, for the previous two quarters.

Запросы правоохранительных органов, направленные в Shapeshift, выросли на 175% во второй половине 2018 года

From the point of view of geographical jurisdiction the largest number of queries during the year received from agencies of the United States, they account for 18 of the 60 queries. Among them, 6 FBI, 5 SEC, 3 from the state level, 2 from the Department of homeland security (DHS) and 1 from the Commission on trade in commodities and futures (CFTC).

The German Agency has made the second place — 8 requests, followed by the UK with 6 and France with 4.

ShapeShift argues that the requested information occurs within 1-2 weeks and that it has fulfilled all confirmed requests received in 2018. As noted by the exchange, increasing the number of requests to law enforcement agencies during the year correlates with other exchanges. As previously reported, the number of requests to the exchange Kraken has tripled in 2018 compared to the previous year.

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