SEC - Page 25

The approval of spot Ether exchange-traded funds (ETFs) is seen as “implicit recognition” from the United States Securities and Exchange Commission (SEC) that Ether is not a security, according to industry experts.

This decision might have broader implications for other tokens as well.

“These are commodities-based trust shares, so the SEC, by approving these, is explicitly saying they’re not going to go after Ether as a security,” stated Bloomberg ETF analyst James Seyffart during a discussion with Ryan Sean Adams on the Bankless podcast.

Digital asset lawyer Justin Browder believes that if Ether ETFs receive S-1 approval — the final requirement for them to begin trading — then the “debate is over: ETH is not a security.”

Adam Cochran, a partner at venture capital firm Cinneamhain Ventures, suggested this approach could extend to other tokens: “ETH is a commodity, even with its current attributes.

That means we can extrapolate to A LOT of other projects what elements matter in security. Today a lot of things probably clearly became commodities, even if they don’t know it yet.”

However, Seyffart and others believe the SEC might still target those involved with staking Ether.

READ MORE: Democrats Urged, But Not Forced, to Oppose Pro-Crypto Bills FIT21 and CBDC Act

“[I think they will] try to thread this needle and say ETH itself, they’re not going to call a security but staked ETH might be a security […] and I don’t believe they’re going to give that up any time soon.” Digital asset lawyer Joe Carlasare echoed this sentiment.

“The SEC could pursue individual actors and staking as a service even with the ETF launched. I think other actions are less likely,” Carlasare told Cointelegraph.

In April, Ethereum infrastructure firm Consensys received a Wells notice from the SEC, which focused on MetaMask’s trading and staking services.

Finance lawyer Scott Johnsson noted that the SEC didn’t confirm Ether’s non-security status in its approval order, saying it “completely sidestepped” the issue.

The SEC officially approved 19b-4 applications from VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise to issue spot Ether ETFs on May 23.

Many ETF issuers notably removed staking in their final amendments.

Hashdex was the only ETF issuer that didn’t receive regulatory approval on the day.

However, the eight approved ETF issuers will need to wait until the SEC signs off on their S-1 registration statements before launching.

---

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

U.S. prosecutors are seeking a five to seven-year prison sentence for former FTX executive Ryan Salame, who was allegedly a key accomplice to FTX co-founder Sam “SBF” Bankman-Fried, in connection with the collapse of the FTX crypto exchange.

On May 21, federal prosecutors submitted a sentencing memo to a Manhattan federal court, calling for a strict sentence for Salame, who has pleaded guilty to serious crimes related to the misuse of FTX investors’ funds.

According to a court filing viewed by Bloomberg, the prosecutors are advocating for a “just punishment” that reflects the severity of Salame’s crimes, contrary to his lawyers’ recommendation of no more than 18 months in prison.

“The campaign finance offense is one of the largest-ever in American history, and the unlicensed money transmitting business exchanged more than $1 billion without proper supervision,” said the prosecutors.

Salame’s sentencing, for aiding SBF in misappropriating $10 billion of users’ funds, is scheduled for May 28.

The prosecutors emphasized, “Only a meaningful period of incarceration could adequately deter the defendant and others and promote respect for the law.”

READ MORE: Bitcoin Hovers Near $67,000 as Traders Eye Key Resistance and Support Levels

On April 1, the U.S. District Court for the Southern District of New York sentenced SBF to 25 years in prison after he was convicted on seven felony charges.

Salame is set to be the first of SBF’s accomplices to be sentenced.

Salame joined Alameda Research in Hong Kong in 2019 and eventually became the CEO of FTX Digital Markets, the Bahamas-based subsidiary of FTX.

Other notable figures involved in the FTX scheme, including Caroline Ellison, Nishad Singh, and Gary Wang, have yet to be sentenced.

Meanwhile, several U.S. lawmakers are backing a bill intended to clarify the roles of financial regulators in the oversight of digital assets, aiming to prevent future incidents similar to FTX.

North Carolina Representative Wiley Nickel has called for the passage of the Financial Innovation and Technology for the 21st Century (FIT21) Act, which would define how the Securities and Exchange Commission and Commodity Futures Trading Commission regulate cryptocurrencies.

---

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

The newly-approved spot Ether (ETH) exchange-traded funds (ETFs) could launch as early as mid-June if the United States securities regulator follows a timeline similar to its spot Bitcoin ETF process.

Spot Ether ETFs received approval for their 19b-4 filings, allowing the funds to be listed on their respective exchanges.

However, applicants must first obtain approved S-1 registration statements to begin trading.

Bloomberg ETF analyst James Seyffart has suggested that S-1 approvals could come in a “couple of weeks,” though he also noted that the process could take longer, typically up to five months.

Fellow Bloomberg ETF analyst Eric Balchunas responded that “mid-June is certainly poss[ible].”

Balchunas expects there will only be one round of comments on the S-1 amendments, similar to the SEC’s feedback process for spot Bitcoin ETF applicants.

He noted that this process took about two weeks, which is why he estimates mid-June as a possible launch date. “Just a guess tho.

“We will see,” Balchunas added.

VanEck filed its amended S-1 shortly after having its 19b-4 approved, and other applicants are expected to follow suit soon.

However, Delphi Labs general counsel Gabriel Shapiro noted the SEC’s approval was made by its Division of Trading and Markets unit on a “delegated authority,” claiming that one of the five SEC Commissioners could challenge the decision within the next 10 days.

Digital asset lawyer Joe Carlasare told Cointelegraph that such a challenge could theoretically happen—“but it won’t.”

READ MORE: Bitcoin Battles to Hold $69,000 as Analysts Eye Potential Retracement

“They wouldn’t have passed it through trading and markets without knowing that no Commissioner opposed it.”

Seyffart disagrees, noting that making decisions with delegated authority “is the norm” as requiring an official vote for every decision and document “would be insane.”

He added that asking for a review likely “wouldn’t change anything” about the approvals.

If the S-1s are approved, Seyffart expects the spot Ether ETFs will see 20% of the flows that spot Bitcoin ETFs have seen, while Balchunas estimates a smaller range of 10-15%.

According to Farside Investors, spot Bitcoin ETFs have tallied $13.3 billion in net inflow since their launch roughly four and a half months ago.

Capturing 20% of that would mean spot Ether ETFs could tally a combined $2.66 billion over the same timeframe.

Some worry that the spot Ether ETF market could see significant outflows from the converted Grayscale Ethereum Trust into spot ETF form, similar to outflows seen with the firm’s converted Bitcoin investment product.

More than $11.3 billion is locked in the Grayscale Ethereum Trust, according to Arkham Intelligence.

On May 23, eight applicants received regulatory approval: VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Bitwise, and Invesco Galaxy.

Hashdex was the only ETF issuer that did not receive approval.

---

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

Amid growing anticipation regarding the approval of a spot Ether exchange-traded fund (ETF) in the United States, global investment manager VanEck’s ETF has been listed by the Depository Trust and Clearing Corporation (DTCC) under the ticker symbol “ETHV” as of May 23.

The DTCC, an American financial market infrastructure provider, offers essential clearing, settlement, and transaction reporting services to financial market participants.

Being listed on the DTCC is a significant step towards receiving final approval from the U.S. Securities and Exchange Commission (SEC).

Currently, VanEck’s ETF is marked as inactive on the DTCC website, meaning it cannot be processed until it secures the necessary regulatory approvals.

Notably, VanEck is not the first to list an Ether ETF with the DTCC; Franklin Templeton’s spot ETH ETF was listed on the platform a month earlier.

The DTCC clarified that their ETF list includes both active ETFs ready for processing and inactive ones awaiting approval.

READ MORE: Bitcoin Hovers Near $67,000 as Traders Eye Key Resistance and Support Levels

In a related development, there are reports that SEC officials have contacted Nasdaq, the Chicago Board Options Exchange, and the New York Stock Exchange to update and revise existing spot Ether ETF applications.

The apparent shift in the SEC’s stance over the past week is believed to be influenced by the White House.

Crypto lawyer Jake Chervinsky observed on X that policy is influenced by politics, noting, “For months, crypto has been winning the political battle.”

He also speculated that former President Donald Trump’s endorsement of cryptocurrency might have prompted the Biden administration to adjust its policy.

The SEC faces a crucial deadline on May 23 for its decision on VanEck’s spot Ether ETF application.

After months of speculation about a likely denial of spot ETH ETFs, the SEC recently took significant action.

The Commission requested financial managers to amend and resubmit their 19b-4 filings for proposed spot Ether ETFs.

Some analysts interpret this move as a positive sign, increasing the likelihood of approval from 25% to 75%.

---

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

Sushi has partnered with GoPlus Security to enhance its user security through the integration of the Token Security API. This collaboration is aimed at protecting Sushi users from the risks of honeypots and scam tokens, significantly boosting the safety features of the platform.

By incorporating the GoPlus Security’s API, Sushi can now proactively screen and evaluate the risk associated with new tokens. This early detection system helps in identifying malicious tokens, such as honeypots and scams, thereby enhancing the safety of transactions on the platform.

GoPlus Security, known for its in-depth security analyses of ERC20 tokens across multiple networks, provides the Token Security API which performs extensive risk assessments and transaction security evaluations. This ensures that any potential threats are quickly identified and addressed.

Each token listed on Sushi undergoes a rigorous security check that includes a detailed analysis, transaction verification, and risk evaluation to ensure that only secure tokens are traded. If a token is found to be risky, Sushi promptly alerts its users through immediate popup warnings, aiding them in making safer investment decisions and steering clear of potential scams like rug pulls.

This partnership underscores Sushi’s commitment to prioritizing user safety. By leveraging GoPlus Security’s advanced technologies, Sushi actively protects its users against the growing threats in the cryptocurrency landscape.

Sushi continues to evolve its security measures, and this partnership with GoPlus Security represents one of the many initiatives taken to maintain a secure trading environment. Users can look forward to ongoing improvements and updates aimed at enhancing their safety and security on the platform.

Eskil Tsu, Co-Founder of GoPlus, highlighted the importance of the partnership, stating, “Sushi is setting a groundbreaking example for the industry by integrating our Token Security API. There’ll be 100x more malicious actors in the future. By proactively identifying and mitigating crypto scams together, we are not only safeguarding users’ investments but also reinforcing trust and security within the crypto community.”

Jared Grey, Head Chef of Sushi, emphasized the value of this collaboration, saying, “At Sushi, we’re all about giving you the best DEXperience, and keeping our users safe is a big part of that. By teaming up with GoPlus Security to flag honeypot and scam tokens, we’re addressing one of the biggest concerns for newcomers—security. This partnership not only enhances our product offerings but also shows how DeFi protocols can work together to make the space safer and more awesome for everyone—another great DeFi Lego best practice in action.”

Despite skepticism from numerous crypto analysts and the broader crypto community regarding the approval of spot Ether exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC), some experts believe a surprise may be possible.

“If by some chance the SEC decides to approve then so many will be caught severely offside,” said crypto trader Matthew Hyland to his 142,000 followers on X on May 17.

He added, “If 90% of people think the ETH ETF will be denied, and the majority of those people think it will lead to a crypto crash then who will actually be selling?” Hyland noted that the expectation of denial is already “priced in.”

As of publication, Ether is trading at $3,102, according to CoinMarketCap.

Bloomberg ETF analyst Eric Balchunas has estimated the odds of approval at 35%, while the broader crypto community, based on New York-based Polymarket’s predictions, places their estimates closer to 7%.

READ MORE: Bitcoin Eyes New Highs as Analysts Spot Imminent Golden Cross on Lower Timeframes

Meanwhile, Coinbase institutional research analyst David Han believes there is potential for a positive outcome.

“We believe the odds of approval are closer to 30-40%,” Han stated in Coinbase’s monthly outlook report published on May 15.

Han elaborated that as cryptocurrency becomes a more significant issue for voters in the lead-up to the November U.S. presidential election, the SEC might reconsider its stance on denial.

“As crypto begins to take form as an election issue, it’s also less certain in our view that the SEC would be willing to front the political capital necessary to support a denial,” he said.

Han further argued that even if the VanEck and ARK Invest ETF applications are denied by the initial deadline of May 23, litigation could potentially overturn that decision.

This suggests that while current sentiment is largely pessimistic, there are plausible scenarios where the SEC might approve the spot Ether ETFs, leading to significant market movements.

---

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

A small group of community members has launched a decentralized memecoin called NotWifGary (NWG), which takes an anti-Securities and Exchange Commission (SEC), pro-Ethereum stance.

This initiative comes in response to the SEC’s increased scrutiny of the crypto industry.

Though some NWG members have experience in the zkEVM ecosystem Linea, Marco Monaco clarified to Cointelegraph that “this is a personal initiative” for the entire team, emphasizing that the project is not affiliated with Linea or Consensys.

“This is like activism, a different form of it, peaceful and focused on fun,” Monaco explained.

As companies engage with the SEC, dedicating significant resources to legal battles, NWG aims to represent the community side, amplifying current events, creating talking points, and fostering a fun meme culture.

Monaco, along with 11 “brave friends,” attributed the project’s creation to the “regulatory uncertainty” affecting Ethereum.

If successful, NWG plans to establish a treasury and a DAO.

The goal is that companies facing legal challenges from regulators can propose to the DAO for partial coverage of their legal costs from the NWG treasury.

However, the immediate focus is on launching the memecoin.

On May 15, the official NWG project announced on X that it aims to “stand […] against Gary Gensler and the SEC, who are unlawfully threatening digital property by attacking Ethereum and open-source developers.”

NotWifGary ($NWG) is designed as a CultureCoin and will be launched in a highly decentralized manner with a fair launch.

READ MORE: Brothers Indicted for $25 Million Crypto Theft in Groundbreaking Ethereum Blockchain Exploit

The 12 supporters of $NWG are fully transparent, with information available on http://notwifgary.xyz/. The entire token allocation will be deployed in a pool.

The project’s website states that the memecoin will launch on Linea as an ERC20 token, “deployed from a multisig wallet involving Original Project Supporters.”

The NWG project is not yet live and will have its liquidity pool (LP) bootstrapped through community donations to ensure sufficient decentralization and a fair launch.

Donors will not receive any $NWG tokens but will get the “$NWG Launch Team” SBT.

Recently, the SEC has taken regulatory action against Robinhood, issuing a Wells notice on May 4, which delayed Exodus’ NYSE listing on May 10.

Democratic Party Rep. Wiley Nickel commented on May 15 that the SEC was turning crypto into “a political football,” forcing President Biden to “choose sides” unnecessarily.

This comment followed the proposed Staff Accounting Bulletin (SAB) 121 rule, which mandates that SEC-reporting entities record custodied crypto as liabilities on balance sheets.

---

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