SEC - Page 202

Circle Internet Financial, the company behind the USD Coin (USDC), the second-largest stablecoin globally, has reportedly filed for an initial public offering (IPO) in the United States, according to a report by Reuters on January 11.

This move signifies Circle’s intention to transition into a publicly traded company, though specific details regarding the IPO, such as the proposed price range and the number of shares to be sold, remain undisclosed.

The completion of the IPO is contingent on the U.S. Securities and Exchange Commission (SEC) completing its review and prevailing market conditions.

The notion of Circle going public first surfaced in 2021 when the stablecoin issuer announced its intention to merge with Concord Acquisition Corp, a blank-check company initially valued at $4.5 billion. Subsequently, the valuation swelled to $9 billion in 2022, but the merger was ultimately abandoned.

In 2023, the prospect of Circle’s IPO resurfaced following a Bloomberg report that relied on anonymous sources.

READ MORE: Cathie Wood’s ARK Invest Continues to Trim Coinbase Holdings

The report indicated that Circle had been engaged in discussions with its advisers and was preparing for a potential IPO.

At that time, a Circle representative acknowledged that becoming publicly listed in the U.S. had been a longstanding strategic objective but refrained from confirming the rumors.

Circle is renowned for issuing the USDC stablecoin, which is pegged to the value of the U.S. dollar.

USDC has consistently ranked among the world’s largest stablecoins, boasting a substantial market capitalization of $25 billion.

The decision to go public underscores Circle’s commitment to further establishing itself within the digital currency landscape and reflects the growing prominence of stablecoins within the broader financial ecosystem.

By pursuing an IPO, Circle aims to capitalize on the surging interest in digital assets while also adhering to the regulatory framework imposed by the SEC.

As the IPO process unfolds, industry observers and potential investors will keenly monitor developments surrounding Circle, as the stablecoin issuer navigates the regulatory landscape and charts its course as a publicly traded company.

In a blog post published on January 8, OpenAI responded to a lawsuit brought forth by The New York Times (NYT), categorically dismissing the allegations as “without merit.”

The post also highlighted OpenAI’s ongoing collaborative efforts with various news organizations.

OpenAI revealed that prior to the lawsuit, they were engaged in what appeared to be “progressing constructively” discussions with the NYT.

The lawsuit, filed by the NYT against OpenAI and Microsoft, centers on claims of unauthorized use of NYT content for training AI chatbots.

OpenAI firmly refutes these claims and views this as an opportunity to clarify their business practices, intent, and technological development.

The blog post outlined four key claims upon which OpenAI bases its arguments.

Firstly, OpenAI stressed its active collaboration with news organizations, emphasizing the creation of new opportunities for news dissemination.

Secondly, they asserted that their content usage falls under “fair use,” but they have introduced an “opt-out” option as a goodwill measure.

Additionally, OpenAI acknowledged and committed to addressing the issue of content “regurgitation” as a rare bug in their technology.

READ MORE: Mysterious Bitcoin Transaction: $64,000 Spent on Enigmatic 9MB Data Inscription

Lastly, they implied that the NYT’s perspective might not represent the full story.

OpenAI also listed several media industry partnerships, including a recent integration with German media giant Axel Springer, aimed at addressing AI-related challenges.

The News/Media Alliance was mentioned as an organization with which OpenAI collaborates to explore opportunities, discuss concerns, and provide solutions.

However, it’s worth noting that the News/Media Alliance had previously published a 77-page paper in October and submitted it to the United States Copyright Office, raising concerns about AI models being trained on datasets primarily consisting of content from news publishers.

OpenAI highlighted its “opt-out process” for publishers, which prevents its tools from accessing the websites of publishers who have chosen to employ this feature.

Notably, The New York Times itself adopted this opt-out process in August 2023.

The central argument in the NYT’s case against OpenAI and Microsoft revolves around the claim that “www.nytimes.com” is among the most frequently used proprietary sources, ranking only behind Wikipedia and a U.S. patent database.

The NYT asserted that they had contacted OpenAI and Microsoft in April 2023 to express concerns regarding intellectual property but received no satisfactory resolution.

Despite OpenAI’s firm rebuttal, legal experts have regarded the NYT’s case as the most substantial thus far, alleging copyright infringement by generative AI.

OpenAI concluded their blog post by stating that any misuse of content claimed by the NYT is not representative of typical user activity and their content is not intended to serve as a substitute for The New York Times.

They expressed hope for a constructive partnership with the NYT, acknowledging and respecting the newspaper’s long history and influence in the media industry.

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On January 5th, Cathie Wood’s ARK Invest made another significant move by selling 133,823 shares of the cryptocurrency exchange Coinbase.

The trading day began with Coinbase stock at $152.67 and concluded at $153.98.

ARK Invest publicly disclosed its trading activities for January 5th on January 8th through its official platform, X (formerly Twitter).

This disclosure included the sale of 107,151 Coinbase shares from its ARK Innovation ETF (ARKK), 15,892 shares from its ARK Next Generation Internet ETF (ARKW), and 10,780 shares from its ARK Fintech Innovation ETF (ARKF).

The total value of the recent Coinbase share divestment amounted to approximately $20.6 million, with the stock price hovering around $153.98.

In addition to selling Coinbase shares, ARK Invest also made changes to its portfolio by reducing its holdings in Stratasys and acquiring shares of Palantir Technologies and Iridium Communications.

Notably, this isn’t the first time ARK Invest has reduced its Coinbase holdings.

On January 3rd, ARK sold 166,000 Coinbase shares worth approximately $25 million, following a previous sell-off of 237,000 shares on December 5, 2023.

These divestments in December and January have yielded ARK Invest around $78 million.

READ MORE: Bitcoin Prepares for Volatility as U.S. Spot ETF Decision Looms in 2024

Despite these ongoing reductions in Coinbase shares, ARK still maintains a significant position in the exchange.

Coinbase remains the largest asset in the ARKK ETF, representing 10.04% of the portfolio, as well as being the largest asset in the ARKW ETF at 10.37% and the ARKF ETF at 13.41%.

These divestments come at a crucial time in the cryptocurrency world as the community eagerly awaits the decision of the United States Securities and Exchange Commission (SEC) regarding the approval or denial of the first spot Bitcoin exchange-traded fund (ETF) available to U.S. investors.

Cathie Wood’s ARK Invest is one of the 14 companies that have submitted applications for a spot Bitcoin ETF with the SEC.

Their ETF, known as ARK 21Shares, was developed in partnership with Swiss firm 21Shares, which specializes in cryptocurrency exchange-traded products.

Notably, ARK and 21Shares were the first to submit updates to their spot Bitcoin ETF application before the SEC’s December 29th deadline.

On January 4th, the ARK 21Shares Bitcoin ETF officially filed a registration notice with the SEC.

The SEC has until January 10th to make a decision on the ETF application, a decision that will be closely watched by the cryptocurrency and investment communities.

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Nebraska’s legislative landscape witnessed a significant development on January 5th as State Senator Eliot Bostar introduced Bill 911, aimed at implementing the Blockchain Basics Act within the state.

This legislative proposal has a fundamental objective: to establish a framework for safe and legally compliant cryptocurrency activities, encompassing mining, holding, and trading, all in the best interests of Nebraska’s residents.

The Blockchain Basics Act, as envisioned in Bill 911, takes a balanced approach. It allows individuals to set up blockchain nodes and engage in crypto mining on residential properties without the necessity of obtaining licenses.

However, there’s a crucial caveat: all operators must adhere to local noise ordinances, ensuring that the tranquility of neighborhoods is maintained.

In contrast, crypto-related businesses will be restricted to operating exclusively from designated industrial zones.

Moreover, the legislation places constraints on political subdivisions, preventing them from altering existing noise pollution limits, imposing new requirements that do not pertain to data centers, or altering zoning regulations.

Additionally, the Blockchain Basics Act distinguishes staking services from securities within the context of Nebraska’s regulatory framework.

Notably, the bill goes beyond promoting crypto activities; it also emphasizes the protection of investor rights.

It guarantees the right to self-custody for every investor and seeks to shield them from onerous cryptocurrency taxes within the state.

Senator Bostar’s commitment to fostering a level playing field for crypto enthusiasts mirrors efforts in other states, such as California.

READ MORE: BlackRock Plans Workforce Reduction Ahead of Potential Bitcoin ETF Approval

Coincidentally, on January 4th, California State Senator Steve Padilla introduced two bills with the overarching goal of establishing a “safe and ethical framework” for artificial intelligence (AI) service providers operating within the state.

Senate Bill 892 envisions the California Department of Technology setting standards for safety, privacy, and non-discrimination in AI services.

Meanwhile, Senate Bill 893 seeks to establish an AI research hub involving the Government Operations Agency, the Governor’s Office of Business and Economic Development, and the Department of Technology.

Senator Padilla underscored the importance of these initiatives in ensuring that AI benefits the entire society, rather than being monopolized by a select few companies.

He emphasized the need for public investments to prevent a future where a handful of billionaires dictate the trajectory of AI technology.

In summary, Nebraska’s introduction of Bill 911 and California’s initiatives led by Senator Padilla exemplify the ongoing efforts at both state and local levels to regulate emerging technologies like blockchain and AI, while safeguarding the interests of the public.

These legislative moves reflect the states’ commitment to fostering innovation within a structured and ethical framework.

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