News

Arkham Research notified DeFi wallet owners to look at the addresses and try to retrieve their funds, which have been stuck for months in bridge contracts.

Custodia Bank is challenging a lower court’s ruling in its battle for a Federal Reserve master account.

The U.S. government’s arguments on stablecoins in an unrelated criminal case could bolster Binance’s position in its civil case with the SEC.

Bitcoin and altcoins could be en route to retest their recent strong support levels as bears try to extend the correction.

Key takeaways:

• Due to allegations that the US SEC intends “to regulate ETH as a security,” the software development company Consensys launched a lawsuit against them.
• Consensys claimed that the company’s MetaMask wallet software, which enables users to self-custody ETH and other cryptocurrencies, was the target of an SEC “tune-in.”

Due to allegations that the US Securities and Exchange Commission (SEC) and its five commissioners intend “to regulate ETH as a security,” the software development company Consensys launched a lawsuit against them.

Consensys claimed in a filing on April 25 in the U.S. District Court for the Northern District of Texas that the SEC had planned an effort to dictate the direction of cryptocurrencies by bringing enforcement actions against Ether that were intended to regulate it as a security. 

The company referenced the SEC’s record of announcing as early as 2018 that ETH was not a security, citing statements made by Chair Gary Gensler as well. It also warned of the potential consequences of the agency shifting its view after companies had established their operations based on regulatory precedent. The filing stated:

“The SEC’s unlawful seizure of authority over ETH would spell disaster for the Ethereum network, and for Consensys,”

In the court brief, it was said that all ETH holders would be concerned about breaking securities laws if they transferred their ETH on the network. According to the document, anyone who purchases ETH can no longer use Ethereum’s library of decentralized services and apps. This has the potential to severely damage one of the biggest innovations on the internet by prohibiting the use of the Ethereum blockchain in the US.

Consensys claimed that the company’s MetaMask wallet software, which enables users to self-custody ETH and other cryptocurrencies, was the target of an SEC “tune-in.” 

The company stated in the statement that on April 10, it received a Wells notice from the SEC alerting it to possible enforcement actions pertaining to its MetaMask Staking and Swaps products. In a phone conference, the SEC stated that Consensys was conducting business as an unlicensed broker-dealer, the report continued.

In addition to naming all five SEC commissioners in their formal capacities, the complaint also took aim at Gensler’s contradictory remarks regarding Ether. 

In an April 2023 hearing, the SEC chair dodged questions about whether ETH fell under the commission’s regulatory purview, despite having declared in 2018 that Ether was not a security while serving as a university professor.

Consensys reports that in 2023, the company was sent with three subpoenas requesting data pertaining to “acquisitions, holdings, and sales of ETH.” The business restated that companies trying to comply in good faith with legal requirements are being “pulled out” by the SEC’s continued attempts to categorise Ether as a securities. 

It asked a court to declare that ETH is not a security under the Securities Act and that Consensys’s ETH sales are not securities sales in order to obtain official relief.

The case was brought by Consensys in Texas, the state where its Fort Worth offices are located. The state’s federal districts have seen a fair amount of activity in the legal domain concerning cryptocurrencies. 

The SEC was sued on April 23 by the Texas-based Blockchain Association and Crypto Freedom Alliance for attempting to expand the Dealer Rule. Riot Platforms and the Texas Blockchain Council sued one other in February for data about energy consumption from cryptocurrency miners.

Even though the SEC hasn’t sued Consensys, a Wells notice may indicate that the commission intends to pursue an enforcement action. The SEC recently concluded a trial in an action against Terraform Labs and Do Kwon. The agency also has civil proceedings pending against Coinbase, Binance, and Ripple.

The US SEC has announced another round of public comments on an expected rule adjustment for trading options on Bitcoin ETPs. The first comments must be sent within 21 days of the document’s official registration, with May 15, 2024 serving as the final deadline.

Key takeaways:

• Another round of public comments on an upcoming rule modification for trading options on Bitcoin ETPs has been announced by the US SEC.
• The ultimate deadline is May 15, 2024, and the initial comments must be made within 21 days of the document’s official registration.

Another round of public comments on an upcoming rule modification for trading options on Bitcoin exchange-traded products (ETPs) has been announced by the US Securities and Exchange Commission (SEC).

The securities regulator is interested in learning more about the potential impact of listing Bitcoin options on the market as a whole, particularly in stressful times, according to a filing dated April 24. A portion of the evaluation will evaluate whether the exchanges’ present enforcement and monitoring systems are sufficient to manage the particularities of Bitcoin options.

The ultimate deadline is May 15, 2024, and the initial comments must be made within 21 days of the document’s official registration. Rebuttal remarks can also be sent until May 29, 2024.

Bitcoin options are financial products that grant the customer the option—but not the duty—to purchase or sell Bitcoin by a given date at a given price. Traders who are conversant with option pricing and market fluctuations generally use options. Like other investments, investing in options has risks, therefore not every investor is suited.

Prior to filing, the Commission requested comments on the proposed rule change and incorporated the responses. The majority of the comments emphasised how adding options to Bitcoin ETPs will boost market efficiency and liquidity:

“In addition, the commenter stated that approving the listing and trading of options on spot Bitcoin ETPs “would further bring Bitcoin into the regulatory perimeter by allowing additional regulated market participants such as CFTC-regulated designated contract merchants and SEC-regulated broker-dealers to trade the products.”

The SEC has received proposals from several financial organizations, such as Nasdaq and Cboe, requesting permission to trade Bitcoin options. While Cboe plans to provide options trading on multiple ETPs that hold Bitcoin, Nasdaq’s application aims to list and trade options on BlackRock’s iShares Bitcoin Trust.

Furthermore, through petitions to the New York Stock Exchange, asset managers such as Bitwise and Grayscale are requesting regulatory permission to list options on their Bitcoin ETFs.

On April 24, the Securities and Futures Commission (SFC) of Hong Kong authorized the first batch of spot Exchange Traded Funds (ETFs) for Bitcoin and Ether. Hong Kong will overtake the US in this regard on April 30, when spot Ether ETFs are authorized and made available for trading.

The exchange is optimizing operations after acquiring ErisX on the eve of crypto winter and expects to save millions.

Bitcoin market inertia is dragging on, and a BTC price drop over the next fortnight would correspond to classic post-halving behavior.