SEC - Page 128

American multinational investment firm Franklin Templeton has filed an amended S-1 application for its proposed spot Ether exchange-traded fund (ETF) product, becoming the first among the applicants to disclose fees to investors.

“The fees of the Sponsor accrues daily at an annualized rate equal to 0.19% of the net asset value of the Fund,” Franklin Templeton stated in a filing with the United States Securities and Exchange Commission on May 31.

Bloomberg ETF analyst Eric Balchunas highlighted the significance of this move, stating that “the opening shot in the ETH ETF fee war has been fired from Franklin” in an X post on the same day.

He dismissed the notion that the fee might be temporary, asserting that it “looks permanent” as it matches Franklin’s spot Bitcoin ETF product.

Sponsor fees, which compensate the fund manager for administration expenses, are a crucial factor for ETF products as investors generally prefer funds with lower fees.

On the same day, VanEck, Invesco, and Galaxy also submitted amended S-1 applications, but none disclosed their sponsor fees.

This has led to speculation and anticipation in the market regarding their potential fee structures.

READ MORE: U.S. Treasury Releases First-Ever Risk Assessment on NFTs, Highlighting Potential Illicit Uses and Investor Risks

Balchunas noted, “Also no fees in any of the new S-1s. Fee war on hold for now,” indicating that the competitive fee adjustments seen with Bitcoin ETFs might not yet be replicated with Ether ETFs.

Prior to the launch of spot Bitcoin ETFs in January, the industry experienced frequent S-1 filing amendments for fee adjustments, a phenomenon Balchunas referred to as the “fee wars.”

Some issuers even waived fees to enhance competitiveness; for instance, Bitwise waived all fees on its spot Bitcoin ETF for the first six months and the first $1 billion in assets.

Grayscale Investments and BlackRock submitted amendments on May 30 and May 29, respectively. Balchunas commented at the time that it was a “Good sign. Probably see rest roll in soon.”

He suggested there might be another round of amendments to “fine-tune” SEC comments, but expressed optimism that spot Ether ETFs could launch by the end of June, calling it a “legit possibility.”

To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.

United States President Joe Biden has missed the chance to “correct” his stance on cryptocurrency assets by vetoing the repeal of controversial cryptocurrency accounting guidelines, claims pro-crypto U.S. Senator Cynthia Lummis.

“Congress gave the administration the opportunity to correct its position on crypto assets,” Lummis stated on May 31 on X, after Biden vetoed a Congressional resolution aimed at overturning the U.S. Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 121.

Lummis argued that Biden acted against the “will of the American people” by preventing the repeal of these guidelines. She emphasized her determination to continue addressing the issue.

“I will not stand idly by as the administration attempts to skirt the law, and I will continue to fight to promote financial innovation and key protections for crypto assets this administration seems hellbent on stifling,” Lummis wrote.

READ MORE: Robinhood Approaches Settlement with Investors Over 2021 Meme Stock Trading Halt

The SAB 121 guidelines require firms holding customers’ crypto assets in custody to record them as a liability on their balance sheet, with a corresponding asset, making it a less attractive option for publicly reporting banks.

Lummis’s statement came just hours after she sent a letter to Biden urging him not to veto the Congressional repeal of the SEC’s SAB 121.

“By inappropriately issuing guidance instead of engaging in notice and comment rulemaking, the SEC’s rulemaking was able to avoid a vote by the full commission on a contentious policy,” Lummis wrote.

Despite the House of Representatives and Senate votes favoring the repeal of the controversial guidelines, support for cryptocurrency is increasing among Senators.

Republican Senator Ted Cruz, another pro-crypto official, shared with his 6.3 million X followers that he has begun Bitcoin mining.

“I just bought 3 Bitcoin miners that started hashing today in Iraan, TX. I’m proud to join the ranks of Texas Bitcoin miners,” Cruz wrote in a May 31 X post.

To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.

21Shares has filed an updated application for its Ethereum spot ETF S-1, rebranding the fund from Ark 21Shares Ethereum ETF to 21Shares Core Ethereum ETF.

Additionally, ARK Invest has ended its partnership with 21Shares and will no longer be involved with the ETF.

The newly amended Form S-1 indicates no updated fees.

Despite recognizing Ethereum’s groundbreaking potential and long-term value, an ARK Invest representative confirmed that the firm has decided not to proceed with an Ether ETF, citing a need to reassess its investment strategy.

This decision does not affect the ongoing collaboration between 21Shares and ARK Invest on other projects, such as the ARK 21Shares Bitcoin ETF launched in January.

In their partnership, 21Shares sponsored the ETF, with Delaware Trust Company acting as the trustee. Coinbase Custody Trust Company securely holds the underlying Ether assets, while ARK Investment Management played a supporting role as a sub-adviser responsible for marketing the shares to investors.

Apart from Bitcoin and Ethereum futures, the duo launched another product called the ARK 21Shares Blockchain and Digital Economy Innovation ETF.

This ETF is designed to invest in public equities of companies within the blockchain industry.

READ MORE: Robinhood Approaches Settlement with Investors Over 2021 Meme Stock Trading Halt

According to 21Shares, this provides investors with what it describes as a “holistic exposure” to the growth of blockchain technology.

ARK Invest and 21Shares revised their spot Ether ETF proposal on May 10, dropping plans to stake a portion of the fund’s assets through third-party providers.

In their Feb. 7 filing, the companies included a clause stating that 21Shares anticipated receiving ETH as a reward for staking and intended to classify the resulting earnings as income generated by the fund.

In September 2023, ARK Invest and 21Shares submitted an application for a spot Ether ETF.

The fund aims to offer direct exposure to Ether and will be traded on the Cboe BZX Exchange, utilizing the CME CF Ether-Dollar Reference Rate – New York Variant.

Last week, the U.S. Securities and Exchange Commission approved 19b-4 forms for eight Ethereum ETFs. Issuers still need their S-1 statements to become effective before trading can begin.

To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.

Changpeng Zhao, founder of Binance, the world’s largest cryptocurrency exchange, has begun serving his sentence at a low-security federal prison in Lompoc, California.

CNBC confirmed the news through Zhao’s legal team at Latham and Watkins.

The crypto community has shown support for Zhao during this time. A Reddit user highlighted that Zhao’s prison sentence could safeguard Binance from potential risks.

User Ilsemprelaziale commented:

“If FTX downfall hit Crypto hard, just imagine what would happen if Binance collapsed. He pleaded guilty and stepped down as CEO.”

Zhao has revealed his plans following his four-month sentence.

He intends to resume his involvement in the cryptocurrency sector, maintaining his holdings and focusing on passive investing, demonstrating his unwavering confidence in digital assets.

He emphasized this period as “a new stage for the crypto industry,” highlighting the critical need for adherence to regulations and compliance.

In April, Zhao, also known as “CZ,” was sentenced by Judge Richard Jones in the U.S. District Court for the Western District of Washington.

READ MORE: U.S. Treasury Releases First-Ever Risk Assessment on NFTs, Highlighting Potential Illicit Uses and Investor Risks

The charges were related to money laundering at Binance, resulting in a four-month prison term and a $50 million fine.

This sentence is notably less severe than the three years federal prosecutors initially sought.

Despite sentencing guidelines recommending 12 to 18 months in prison, Zhao’s lawyers advocated for five months of probation.

Before his sentencing, Zhao apologized and reflected on his actions, accepting responsibility for Binance’s inadequate Anti-Money Laundering (AML) program.

Following Judge Jones’ decision, Zhao stated he would report to prison on a date to be determined.

In November, Zhao reached an agreement with the U.S. government to resolve a multiyear investigation into Binance.

As part of the settlement, he resigned as CEO of Binance.

The U.S. government also imposed a $4.3 billion fine for “civil regulatory enforcement actions,” of which Zhao agreed to pay $50 million.

To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.

Robinhood, the popular trading platform, is finalizing a settlement with investors who sued the company for halting the trading of certain meme stocks in 2021, including GameStop.

According to a May 28 filing in a Miami federal court, Robinhood’s lawyers stated that the settlement with the group of investors is nearly complete and is expected to be finalized and dismissed within the next two weeks.

The filing did not provide details of the settlement, and neither Robinhood, its counsel, nor the investors’ counsel responded to requests for comment.

The investors, led by Plaintiff Blue Laine-Beveridge, accused Robinhood of “unlawfully manipulating market prices” and causing “tens of billions of dollars of investors’ equity” losses by selectively restricting the stocks its users could buy between January 28 and February 4, 2021.

The affected stocks included GameStop, AMC, Bed Bath & Beyond, BlackBerry, Nokia, trivago, Koss, Express Inc., and Tootsie Roll.

This lawsuit focused on Robinhood’s alleged violations of securities law and is part of a broader legal action in multiple U.S. jurisdictions regarding the company’s handling of meme stocks.

The settlement follows United States District Judge Cecilia Altonaga’s denial of the investors’ request to file a new motion for class certification on April 19.

A similar request had been denied in November of the previous year.

READ MORE: Ethereum Set to Surpass All-Time Highs as Bitcoin Dominance Declines

Meme stocks, such as GameStop and AMC, are so named because retail investors often trade them based on social media hype.

GameStop’s stock surged dramatically in January 2021 due to a “short squeeze,” causing significant losses for hedge funds and short sellers while some retail traders made substantial gains.

The surge in GameStop’s stock price was largely credited to Keith Gill, known as “Roaring Kitty,” who recently returned to social media platform X in May after a nearly three-year hiatus.

His return and cryptic posts excited traders, pushing GME’s stock to close at $48.75 on May 14, its highest since late 2021, according to Google Finance.

However, GameStop’s stock has since dropped significantly, closing down nearly 11% on May 29 at $21.24, with an additional 2% decline in after-hours trading to $20.78.

To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.

The United States Treasury Department has published its inaugural finance risk assessment for nonfungible tokens (NFTs), aiming to provide regulators with deeper insights into potential risks and security concerns within the rapidly evolving market.

The report identified several risks, including the possibility of terrorists using NFTs to finance operations, state actors funding nuclear proliferation through NFTs, money laundering, and risks to investors who may face theft, rug-pulls, or other fraud forms that have become well-known.

The report emphasized that most of these illicit activities occur through fiat financing and transactions, rather than being unique to the digital asset space.

“This risk assessment recognizes that most money laundering, terrorist financing, and proliferation financing by volume and value of transactions occurs in fiat currency or otherwise outside the digital asset ecosystem via more traditional methods,” the report stressed.

The Treasury also noted that even in cases of investor or market abuse, digital asset fraud typically happens through long-established schemes, such as Ponzi schemes or exploiting inside information, rather than mechanisms unique to digital assets.

However, fraud has occurred through unique digital asset mechanisms like smart contract manipulation.

READ MORE: Hospitality Worker Jailed for $2.5 Billion Bitcoin Money Laundering in Britain’s Largest Seizure

Despite the high potential for abuse and illicit activity via NFTs highlighted in the assessment, the Treasury admitted that there are few, if any, examples of NFTs being used in terrorist financing, nuclear proliferation, or drug trafficking.

A notable example of malicious activity mentioned in the report was the theft of digital assets by North Korea (DPRK) and associated hacker groups aiming to evade U.S. sanctions and generate revenue for military spending.

The Treasury clarified that NFTs represented a small portion of the total digital asset theft, with other financial institutions also targeted by DPRK hackers.

The report concluded with several recommendations to mitigate potential abuse through NFTs.

These include regulating the NFT market, collaborating with industry insiders to prevent fraud, partnering with foreign allies to curb illicit geopolitical activities, and educating consumers about the risks associated with nonfungible tokens and digital assets.

To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.

Robinhood, the popular trading platform, is finalizing a settlement with investors who sued the company for halting the trading of certain meme stocks in 2021, including GameStop.

According to a May 28 filing in a Miami federal court, Robinhood’s lawyers stated that the settlement with the group of investors is nearly complete and is expected to be finalized and dismissed within the next two weeks.

The filing did not provide details of the settlement, and neither Robinhood, its counsel, nor the investors’ counsel responded to requests for comment.

The investors, led by Plaintiff Blue Laine-Beveridge, accused Robinhood of “unlawfully manipulating market prices” and causing “tens of billions of dollars of investors’ equity” losses by selectively restricting the stocks its users could buy between January 28 and February 4, 2021.

The affected stocks included GameStop, AMC, Bed Bath & Beyond, BlackBerry, Nokia, trivago, Koss, Express Inc., and Tootsie Roll.

This lawsuit focused on Robinhood’s alleged violations of securities law and is part of a broader legal action in multiple U.S. jurisdictions regarding the company’s handling of meme stocks.

The settlement follows United States District Judge Cecilia Altonaga’s denial of the investors’ request to file a new motion for class certification on April 19.

A similar request had been denied in November of the previous year.

READ MORE: Ethereum Set to Surpass All-Time Highs as Bitcoin Dominance Declines

Meme stocks, such as GameStop and AMC, are so named because retail investors often trade them based on social media hype.

GameStop’s stock surged dramatically in January 2021 due to a “short squeeze,” causing significant losses for hedge funds and short sellers while some retail traders made substantial gains.

The surge in GameStop’s stock price was largely credited to Keith Gill, known as “Roaring Kitty,” who recently returned to social media platform X in May after a nearly three-year hiatus.

His return and cryptic posts excited traders, pushing GME’s stock to close at $48.75 on May 14, its highest since late 2021, according to Google Finance.

However, GameStop’s stock has since dropped significantly, closing down nearly 11% on May 29 at $21.24, with an additional 2% decline in after-hours trading to $20.78.

To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.

United States spot Ether exchange-traded funds (ETFs) may launch by late June, according to analysts, after BlackRock updated a crucial filing.

On May 29, BlackRock revised its Form S-1 for its iShares Ethereum Trust (ETHA) with the Securities and Exchange Commission (SEC).

This follows the SEC’s approval of its 19b-4 filing, both required for the ETF to begin trading.

“Good sign. [Probably] see rest roll in soon,” Bloomberg ETF analyst Eric Balchunas noted in a May 29 post on X.

Balchunas mentioned that another round of adjustments to SEC comments is expected, but an “end of June launch [is] a legit possibility.”

He maintained his approval odds around July 4, considering an earlier approval a “long shot.”

Bloomberg ETF analyst James Seyffart said BlackRock’s updated S-1 indicates significant progress, suggesting “issuers and SEC are working towards spot Ethereum ETF launches.”

BlackRock’s revised S-1 included details about its seed capital investor, the entity providing funds for the ETF to start trading.

READ MORE: Tether Mints $1 Billion in USDT, Paving the Way for Bitcoin to Hit $80,000

On May 21, the investor, a BlackRock affiliate, “agreed to purchase $10,000,000 in Shares on May 21, 2024, and on May 21, 2024, took delivery of 400,000 Shares at a per-Share price of $25.00,” according to the filing.

The filing also confirmed the ETF would list and trade under the ticker “ETHA.”

This development coincides with Hashdex withdrawing its bid for a spot Ether ETF, despite the SEC approving it along with BlackRock and seven other issuers.

A source familiar with the application informed Cointelegraph that Hashdex “no longer intends to move forward with a single asset Ether ETF.”

Analysts predict the launch of these ETFs could propel ETH to new highs, with some viewing it as a bet on Web3’s growth.

However, there is also speculation that ETH could face price pressure due to potential outflows from the Grayscale Ethereum Trust (ETHE), which might see $110 million in average daily outflows for weeks post-conversion and discount narrowing.

To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.