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XRP as a security is a no-go; Settlement with SEC out of the picture, Garlinghouse affirms

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The entire world witnessed the Ripple vs. SEC case where the financial watchdog proceeded to label XRP as a security, while Ripple tried to shun off these accusations. As this lawsuit persists, both the parties have time and again been asked if there were any chances of a settlement. The SEC as well as Ripple have outrightly suggested there were no possibilities of a settlement.

More recently, Ripple’s Brad Garlinghouse appeared in an interview with Fox Business’s Charles Gasparino and clarified that settlement wouldn’t be possible if the SEC continued to deem XRP as a security.

While 2021 started out as a great year for almost all the crypto assets in the market, XRP was the only one to suffer the wrath of the Securities and Exchange Commission [SEC] of the United States. The regulator went on to categorize XRP as a security and accused Ripple of selling “unregistered securities.” This caused immense loss to the asset as it was ousted by prominent crypto exchanges.

Despite garnering the support of regulators from across the globe, Ripple failed to convince the SEC. This battle appears to go on for a long time. While Garlinghouse did not mind settling, deeming XRP a security would certainly dement the chances of a settlement.

XRP ETF in the making?

Steering away from the Ripple vs. SEC case, Garlinghouse was asked about the chances of an XRP exchange-traded fund [ETF] in the US. The approval of the ProShares Bitcoin ETF got the hopes up high of many firms.

Addressing the same, Garlinghouse put forth a question of why a government entity was filtering or picking winners and losers.

“Why is the SEC picking winners and losers?”

Furthermore, Garlinghouse called out Gary Gensler, the chairman of the SEC for staying mum on Ether. While noting how the SEC has been consistently asking for clarity pertaining to everything crypto-related, Garlinghouse pointed out that it was rather “ironic” for the SEC to keep its lips sealed about Ether.

The citizens of the US had to wait long and hard to garner a Bitcoin ETF. Several speculate that an altcoin ETF in the US was still a far-fetched thought.

ProShares’ Bitcoin ETF becomes first of its kind to garner green signal from SEC

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Bitcoin exchange-traded funds [ETF] have tried long and hard to make a debut in the US. This could finally be changing as ProShares’s application managed to garner the approval of the Securities and the Exchange Commission [SEC]. Just yesterday, Bloomberg shared a report noting that the USA would be getting its very first Bitcoin ETF and the SEC didn’t take too much time to make it official.

The SEC amassed immense hostility for its decisions pertaining to Bitcoin ETFs. An array of applications were shown the door after being time and again delayed. Many from the crypto community hoped that this would be changed with the departure of Jay Clayton and the arrival of Gary Gensler, the former and current chairman of the SEC, respectively.

The gods had finally answered the prayers of the US citizens as the SEC gave a green signal to ProShares Trust’s Bitcoin ETF. This would mean that ProShares would be listing its shares on the New York Stock Exchange’s Arca. The firm’s ETF would reportedly be rolled out by 18 October 2021 following the filing of a post-effective amendment prospectus.

James Seyffart from Bloomberg tweeted about the same and stated,

“There it is! Bloomberg’s data team in the process of adding the ProShares Bitcoin Strategy ETF to the terminal. Ticker will be $BITO. 95 bps — less than half $GBTC’s 2% fee. This thing is going live next week. Either Monday or Tuesday.”

Back in August, ProShares along with VanEck decided to pull the plug on their Ether ETF filings. While several expressed angst over this, the approval of a Bitcoin ETF was a relief to many.

Bitcoin [BTC] pushes beyond $60K

Bitcoin [BTC] was sitting below the $60K zone for the longest time now. The king coin witnessed a massive plummet from an all-time high of $64K. During the time of writing, BTC had not only hit $60K but even made it past this zone. BTC was trading for $61,359 with a 3.41% surge in the last 24-hours. The entire week was certainly beneficial to the asset as it acquired gains of about 11%.

Additionally, Bitcoin’s market cap was at a high of $1.15 trillion.

XRP holders to be excluded as defendants from Ripple vs SEC case

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Ripple and XRP traders had a difficult year. With immense scrutiny from the Securities and Exchange Commission [SEC] of the United States, Ripple endured an array of issues over the year. The SEC was adamant about accusing Ripple of selling unregistered securities. These “unregistered securities” were nothing but XRP, as per the financial watchdog. While regulators from all over the world issued statements suggesting that XRP could not be categorized as securities, the SEC did not budge. Ripple has been dealing with this lawsuit since the beginning of this year. In more recent news about the case, the judge in the case ruled out XRP holders as defendants.

SEC’s hostile nature towards Ripple appalled many, particularly the holders of the altcoin. Several holders went on to protest and even filed a motion to be a part of the ongoing Ripple vs. SEC case. While these individuals wished to put their part of the story before the law, their involvement went on to be quashed by the court.

Back when the SEC revealed that it was taking Ripple to the court, an array of exchanges decided to drop support for XRP. This in turn affected the price of the altcoin. While all the other coins were enjoying the gains provided by the bulls during the first quarter of the year, XRP was seen trying to balance itself from hitting a low point.

XRP holders cannot be a part of Ripple’s lawsuit

U.S. District Judge Analisa Torres went on to rule that the motion filed by the holders of the altcoin to be a part of the lawsuit was quashed. She noted that the token holders would not be able to participate in the lawsuit as defendants. Revealing the reason behind this decision, the Judge pointed out that the involvement of XRP holders will coerce the SEC to take “enforcement action” against the lot.

This does not mean that the holders of the altcoin were out of the case. Judge Torres noted that the token holders would be part of the case as “amicus curiae.” This means that the token holders’ insights and advice would be taken by the court. However, litigation was out of the picture.

The judge further added,

“The court concludes that amici status strikes a proper balance between permitting movants to assert their interest in this case and allowing the parties to remain in control of the litigation.”

Bitcoin [BTC] briefly breaches $48K; SEC extends ETF deadlines

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In an unexpected turn of events, Bitcoin [BTC] rallied 10% that catapulted its price to $48,000. The latest price action comes despite significant bearish pressure in the crypto market as BTC was found to be struggling to hold its fort above the psychological level of $40,000. However, as the king coin added $4,000 to its price in less than 24-hours, the altcoin market followed suit and flashed green.

The bullish momentum comes just after United States Federal Reserve Chairman Jerome Powell asserted that the authority has no intention to ban cryptocurrencies. While speaking before the House Committee on Financial Services, Powell said that he believes the crypto industry should be regulated in accordance with existing laws.

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Bitcoin [BTC] briefly breaches $48K; SEC extends ETF deadlines 3

In what appears to be an excellent start of the month, investors speculate that the prices of several crypto-asset may soar even higher. Interestingly, the recent surge coincides with the downtrend of the legacy market. Divergences such as these are significant because it strengthens Bitcoin’s position as a macro-asset.

Besides, millions of shorts were liquidated in a matter of hours after the flagship cryptocurrency broke a crucial barrier of $45k. Prominent analyst, Will Clemente revealed liquidation of $47 million worth of BTC shorts in the past hour.

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SEC extends 4 Bitcoin [BTC] ETF deadline

The soaring market also coincides with the latest news of the US Securities and Exchange Commission [SEC] extending the deadline of four Bitcoin ETFs for 45 days. The ETFs in question are – Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, WisdomTree Bitcoin Trust, and Kryptoin Bitcoin ETF that were slated for Nov-Dec this year. The reason behind the move, as cited by the authority, is the requirement for extra time to determine whether to accept the 19b-4 applications.

The SEC’s official release stated,

“The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and any comments.”

Earlier in August, Bloomberg ETF analysts Eric Balchunas and James Seyffart speculated that the SEC is likely to give a green signal to BTC futures exchange-traded fund by the end of October this year.

SEC Chair, Gary Gensler calls out unregulated crypto markets

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The crypto-verse has endured immense pressure from regulators across the globe. The Securities and Exchange Commission aka SEC of the United States has been a significant entity in wrecking the plans of the crypto market. While the previous chairman of the financial regulator had time and again expressed disinterest in crypto, the latest chair was more concerned about regulating the crypto market. Now, SEC’s latest Chairman, Gary Gensler went on to list the importance of regulating the crypto industry.

Regulations have become a part and parcel of the crypto-verse. With the demand for these assets surging more than ever, regulators have begun to take a keen interest in the industry. With the inclusion of licenses and mandatory KYC and AML procedures, crypto platforms have been pushed towards setting up a safe place for investors. Despite starting off as an industry that was far from the purview of regulators, the crypto industry had to give in.

Gensler recently took over as the Chairman of the SEC. With the departure of Jay Clayton and the arrival of Gensler, the crypto-verse hoped to garner better regulations and a crypto-friendly environment in the US. Gensler, however, was focused on regulating the crypto industry.

In a recent conference, the SEC Chair went on to address the need for regulations in the crypto market.

SEC Chair on unregulated markets

Speaking at the Code Conference in Beverly Hills, California, Gensler noted that unregulated crypto markets wouldn’t end well. Gensler has time and again emphasized the importance of regulating a market. He said,

“There’s trading venues and lending venues where they coalesce around these, and they have not just dozens but hundreds and sometimes thousands of tokens on them. This is not going to end well if it stays outside the regulatory space.”

Regulators across the globe have been taking intense measures to regulate the crypto market. While several crypto platforms have been working well with these financial watchdogs, a few others were seen shutting shop. Stringent regulations could further take the essence of decentralization in the crypto market.

Ripple willing to settle with SEC? Brad Garlinghouse drops hints

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Ripple’s fallout with the Securities and Exchange Commission [SEC] of the US has been a major highlight of the year. The SEC blatantly suggested that Ripple had engaged in the sale of unregistered securities i.e., XRP. Despite multiple efforts of the crypto platform, the SEC was adamant about its decision of slapping the platform with a lawsuit. While both the parties had previously made it clear that there were no chances of a settlement, the platform’s CEO Brad Garlinghouse went on to suggest that there could be a possibility of settlement. However, this could be possible only on a condition.

Despite garnering support from regulators across the globe, Ripple failed to convince the SEC that XRP wasn’t a security. Financial watchdogs from all around the world had released statements that XRP did not belong to the securities category, but SEC prolonged the lawsuit.

Over the last couple of months, during the course of the case, an array of things came to light. SEC went on to garner immense hate from people across the globe for being hostile towards XRP. While several exchanges had dropped support for the coin, “RelistXRP” surfaced on the internet.

As this case persists, Brad Garlinghouse, in a recent interview with Fox Business revealed that the platform was ready to settle. However, “absolute certainty” about XRP was needed.

Ripple vs. SEC

In his latest interview, Garlinghouse noted that he needed nothing more than certainty surrounding XRP. He stated,

“To the extent, we can find a constructive path forward with the SEC, we, of course, want to find that. There is no scenario though when we going to settle unless there is absolute certainty about what is XRP on the go-forward basis.”

He believed that Ripple has a definite sight of how XRP could be employed as a “powerful tool.”

Garlinghouse has time and again expressed his angst over the lack of regulatory clarity in the US. The CEO even suggested that the US had traversed from “lack of regulatory clarity to regulatory chaos.”

Additionally, speaking about regulations, Garlinghouse suggested that the crypto industry was regulated. But, the SEC possibly wants more power over the market, he added.

SEC on a warpath with crypto; NY crypto event attendee allegedly subpoenaed

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The United States SEC has been at odds with the crypto community for years. While any regulatory clarity involving the industry is yet to see the light of the day, it has now resorted to summoning speakers at crypto events. Even before taking the podium of the Mainnet 2021 crypto conference in New York, an attendee claimed to have witnessed a speaker subpoenaed by the SEC.

The development sparked off massive uproar amid growing tension in the crypto community. Many speculated the reason behind the move. One such was a prominent lawyer and General Counsel of Compound Finance, Jake Chervinsky who pointed out that summoning someone at a conference could either be due to the fact that the “target” lives outside the US or the SEC wanted to see the entire fiasco unfold live to send a message or intimidate dissents.

SEC vs Crypto: the final straw

Messari was the organizer of the blockchain conference that kicked off amidst regulators at the state and federal levels intensifying scrutiny in the crypto space. Naturally, the founder of the crypto research firm Ryan Selkis wasn’t pleased. In a series of tweets, the exec stated revealed offering compensation event passes for regulatory, which they refused. He concluded that the regulators had no intention of learning about the space and that they wanted to shut the entire industry down. However, Selkis made no mention about the regulator being SEC but confirmed the subpoena reports.

SEC had previously hammered cryptocurrency exchange Coinbase and blockchain firm, Ripple. While the latter is still fighting the regulators, Coinbase, on the other hand, has made a compromise by dropping its plans to launch the LEND product. Nevertheless, serving at an event where there were invited to appeared to be an aggressive move. Selkis, who happens to be one of the most vocal crypto proponents, announced plans to run for the U.S. Senate in 2024 after the event.

His tweet regarding the same read,

“If you’re wondering when I actually decided to run for Senate, it was when these fuckers came to my event, didn’t buy a ticket, and served one of the speakers a subpoena. Enough talk. More war on our out-of-control regulatory state. Selkis 2024. Time to activate the crypto political machine.”

Bitcoin ETF applications continue to flood SEC’s doors

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Despite garnering immense attention from across the globe, several aspects of the crypto-verse remain untouched by many. For instance, Bitcoin exchange-traded funds [ETF] have never seen the light of the day in the United States. As more players enter the market, the need for new and efficient features has started to surge. However, regulatory entities, particularly in the US seemed to be appalled by this.

The Securities and Exchange Commission [SEC] of the US has received an array of Bitcoin ETF applications throughout the years. Despite the constant urge and need for a crypto ETF, the US clearly stated it wasn’t ready for a crypto ETF. Most of the applications were seen shown the door or postponed. This did not stop firms from diving into the field as applicants for Bitcoin ETFs are still knocking on the doors of the SEC.

Prominent financial services platform Fidelity Investments, as well as crypto asset, managed Bitwise, separately sent out ETF applications. While Fidelity had already sent out its application, the platform decided to drive SEC to approve its purpose.

Bitcoin ETFs are still making rounds

As per, Bitwise’s filling, instead of a regular Bitcoin ETF, the platform intends to roll out an ETF pegged to cash-settled Bitcoin futures contracts. With this application, the platform hopes to garner much more than just an ETF. The filling read,

“[…] to obtain exposure to Bitcoin primarily through indirect investments in standardized, cash-settled Bitcoin futures contracts traded on commodity exchanges registered with the CFTC.”

In an elaborate filling Bitwise explained to the SEC why its application should be approved.

In other news, Fidelity decided to take a step forward and urge the SEC to approve its ETF application. Fidelity Digital Assets’ president, Tom Jessop along with six others from the firm decided to meet with the officials of the SEC. In this privately held meeting, members representing Fidelity reportedly laid out reasons for the approval of an ETF in the country.

The executives pointed out various aspects that included the ever surging demand for cryptocurrencies and products related to them. Along with this, members noted how other countries were well ahead in the game, while the US was lagging behind.

Coinbase CEO Brian Armstrong accuses SEC of “sketchy behavior “

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The SEC hasn’t been kind to the cryptocurrency industry. This time, the watchdogs have targetted Coinbase. According to the new blog post, the United States Securities and Exchange Commission has warned that it will sue the digital asset exchange if it rolls out a new lending product. As a result, Coinbase would postpone the launch of its ‘Lend’ product until at least October.

Paul Grewal, who happens to be the Chief Legal Officer, maintains that Coinbase has been engaging proactively with the SEC about Lend for nearly six months. The exec also added that the trading platform has been eager to hear their perspective as they lookout for innovative ways for its customers to obtain more financial empowerment on Coinbase.

“Specifically for Lend, we’re seeking to allow eligible customers to earn interest on select assets on Coinbase, starting with 4% APY on USD Coin (USDC). We could have simply launched the product but we chose not to. This is far from the norm in our industry. Other crypto companies have had lending products on the market for years, and new lending products continue to launch as recently as last month.”

Coinbase detailed that its new Lend program cannot be categorized as a security or an investment contract or a note. Here, the users will not be “investing” in the program, but instead “lending the stablecoin USDC they hold on Coinbase’s platform in connection with their existing relationship.”

The blog penned down by Grewal also noted,

“And although Lend customers will earn interest from their participation in the program, we have an obligation to pay this interest regardless of Coinbase’s broader business activities. What’s more, participating customers’ principal is secure and we’re obligated to repay their USDC on request.”

Coinbase CEO says SEC’s behaviour is sketchy

Brian Armstrong, the CEO of the Nasdaq listed exchange revealed reaching out to SEC before launching Lend. However, the authority responded by telling them that the lend feature is security. When asked to share their view, Armstrong accused the SEC of refusing to clarify instead subpoena records from them and went on to demand testimony from the company’s employees.

The exec also urged the SEC to publish guidance in order to provide more clarity and enforce it evenly across the industry. However, the watchdog resorting to “refusing to offer any opinion” and “and instead are engaging in intimidation tactics behind closed door” has irked Armstrong who also added,

“Whatever their theory is here, it feels like a reach/land grab vs other regulators. Shutting these down would arguably be harming consumers more than protecting them, and by preventing Coinbase from launching the same thing that other companies already have live, they’re creating an unfair market.”

SEC chair claims crypto regulations should become more focussed

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The tussle between the cryptocurrency market and regulatory authorities has been ongoing since the creation of the ecosystem. With each passing year, digital assets took forward steps to enter the good books of most overwatch bodies. The United States Securities and Exchange [SEC] had been on top of crypto from the very start with its Chairman making new comments recently.

During a discussion with the Committee on Economic and Monetary Affairs, SEC chairman Gary Gensler shared his views on cryptocurrency regulations. Gensler spoke about the new avenues being opened up due to the effectiveness of financial technologies. He went on to say that the current digital revolution has the potential to become as game-changing as the internet in the ’90s.

According to the SEC honcho, the cryptocurrency world was a system that constantly chugs along 365 days a year. It was no wonder that the $2.1 trillion value market was being watched by a lot of interested parties. Pro-regulation discussion aside, Gensler also pointed out the drawbacks connected to the cryptoverse.

The SEC chair cited reports that touched on Bitcoin mining’s impact on the environment. After the revelation that Bitcoin mining generated more emissions than some countries, it was clear more needed to be done to curb the problems. This was not to say Bitcoin did not have its merits as it set the foundation for the growth of new Proof of Stake [PoS] blockchain. Gesler added that the privacy of the user was of top priority with bodies like the SEC looking out to reassure that fact.

During the meeting, the SEC official also gave his two cents on stablecoins and their impact on today’s economic climate. He pointed out that stablecoins were just a medium for people to sidestep some economic policies under other banners. Gesler asked for the committee to draw up more solid regulations that will make virtual asset transactions safer and more transparent.