Thanks to regulatory uncertainty from the United States Securities and Exchange Commission and a hodgepodge of state licensing requirements, the development of crypto trading in the U.S. remains stuck in the backwaters of trading reserved for Over-the-Counter Bulletin Board issues. In order to ensure the continued and healthy growth of digital asset markets, it is critical to expand the market share of institutional crypto trading. That’s a better business model for digital asset markets, and it will force U.S. regulators to act quicker. Digital asset markets embracing this will realize that better controls will attract more institutional liquidity, and organizing …

Back in July, the Securities and Exchange Commission alongside the Commodity Futures Trading Commission fined investment app Abra for providing trading on synthetic assets. At the time, that looked like the end of the matter. However, in response to Cointelegraph’s Freedom of Information Act (FOIA) request for details in the Abra case, the SEC cited FOIA exemption 5 U.S.C. 552(b)(7)(A) — an exemption that only applies to ongoing investigations. The exemption applies to situations where releasing information could “reasonably be expected to interfere with enforcement proceedings.” The SEC’s response does not provide details into the ongoing investigation, and was careful …

U.S. District Judge Alvin Kellerstein has sided with the U.S. Securities and Exchange Commission (SEC), ruling that the Canadian technology firm Kik’s $100 million initial coin offering (ICO) violated federal securities laws. On September 30, Judge Kellerstein responded to both parties’ requests for summary judgment, determining that Kik’s 2017 token sale meets the definition of a securities issuance according to the Howey test, as the ICO participants had a reasonable expectation of profit. “In public statements and at public events promoting Kin, Kik extolled Kin’s profit-making potential. Kik’s CEO explained the role of supply and demand in driving the value …

Two bills introduced last week looked to solidify the roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission — respectively the regulators for securities and commodities in the United States. The bills featured many of the usual suspects in legislation touching on crypto but one less familiar face was U.S. Representative Mike Conaway (R-TX). Currently serving as the ranking member of the House Agriculture Committee, Conaway has been in Congress since 2005, predating Bitcoin’s whitepaper. His tenure has not been especially crypto-heavy. Nonetheless, he’s behind a bill that could transform how the U.S. handles crypto exchanges, …

The U.S. Securities and Exchange Commission (SEC) took a major step toward streamlining digital asset securities settlement by compressing the previous four-step process into three in a bid to reduce operational risk for broker-dealers. The SEC issued a no-action letter on Sept. 25, stating it will not penalize any broker-dealer operating an alternative trading system (ATS) that trades digital asset securities — if they adhere to the new guidelines. According to the regulator, several ATS want to follow a streamlined model in cases where there is no custody over the assets traded. Most ATS follow a four-step process: first, the …

Two major crypto bills were introduced in the U.S. House of Representatives on Thursday. One aims to establish which cryptocurrencies are securities. The other looks to put regulation of exchanges in the hands of the country's commodities regulator. The securities bill The Securities Clarity Act, from the office of Representative Tom Emmer (R-MN) establishes a new distinction in securities law between an investment contract and the "an asset sold pursuant to an investment 22 contract, whether tangible or intangible (including an 23 asset in digital form)." The new bill is basically a direct response to recent controversy over the Simple …

In a virtual fireside chat with the D.C. Bar, SEC Commissioner Hester Peirce criticized the commission’s long-standing resistance to a Bitcoin ETF. Moderator Ashley Ebersole asked about the SEC’s highly public dissatisfaction with a long series of Bitcoin ETF proposals in the U.S. Peirce, who is often known as "CryptoMom," responded with opposition to those rejects: “I’ve been pretty outspoken about my disagreement with my colleagues on disapproving some of these exchange-traded products.” Bitcoin is not uniquely volatile as a base investment for an exchange-traded fund, Peirce argued. “I would like us to look at how we’ve looked at similar …

The United State’s securities watchdog has placed a temporary trading suspension on the stock of Vortex Blockchain Technologies until October 6. The Securities and Exchange Commission (SEC) cited confusion over the nature of Vortex’s business operations and the value of their assets as the reason behind the temporary suspension. Vortex Blockchain Technologies Inc, formerly UA Granite Corporation, has been developing a variety of applications in the cryptocurrency space. Its activities reportedly include cloud mining, blockchain hardware and software development, and a cryptocurrency wallet and exchange. The company, which has not filed certain periodic reports with the SEC, only started trading …

As mentioned in the first and second parts of this story, on March 24, 2020, in a widely reported and closely followed decision, Judge Peter Castel imposed a sweeping preliminary injunction preventing Telegram from issuing its planned crypto asset, Grams. Shortly thereafter, the judge clarified his initial ruling by explicitly holding that the injunction applied to all sales worldwide regardless of where the original purchasers might be located. Efforts by Telegram to see that the Grams would not easily be resold into the United States were unavailing. This part of the story looks at the decision to apply U.S. requirements …

As discussed in the previous article, Telegram is a popular global instant messaging company. In 2018, it sold contractual rights to acquire a new crypto asset that it was developing (to be called Grams) to a group of accredited (and wealthy) investors around the world. Telegram raised about $1.7 billion from 171 investors, including 39 U.S. purchasers. This was a prelude to the planned launch of Grams, which was to occur about a year and a half later in October 2019. This two-step process — where a crypto entrepreneur sells contractual rights to acquire a crypto asset upon launch in …

Regulated Brazilian fund manager Hashdex has inked a deal with Nasdaq to launch the world’s first crypto asset exchange-traded fund (ETF) on the Bermuda Stock Exchange (BSX). The stock exchange announced it had approved the ‘Hashdex Nasdaq Crypto Index’ on September 18, revealing that 3 million Class E shares will be issued for trade on the platform. Cointelegraph Brazil confirmed the Nasdaq partnership and ETF with Hashdex’s chief executive, Marcelo Sampaio According to local media outlet Infomoney, the fund should be live and trading on the BSX by the end of the year. The report notes that Hashdex chose to …

Telegram is a popular, global, cloud-based instant messaging, videotelephone and voice-over service company. Particularly popular with crypto-enthusiasts, at the end of 2017, Telegram came up with a plan to raise funds to support the development of a new crypto asset, dubbed Gram, and a network originally planned as the Telegraph Open Network. Proceeds would also fund further expansion of the messaging service that had previously been funded by the founders. Telegram set out to fundraise in two distinct stages. The first involved the sale of contractual rights to acquire Grams if and when they were successfully launched. The second stage …