Investment Learning

November 1, 2023

CFTC Pays $16M to Whistleblowers; Majority of Tips Involved Cryptocurrency

According to CoinDesk: The Commodity Futures Trading Commission (CFTC) of the United States, responsible for overseeing the derivatives market, has awarded $16 million to whistleblowers in 2023, with a majority of the 1,530 tips received related to cryptocurrency, according to Commissioner Christy Goldsmith Romero. Evidently, crypto remains a hotbed for fraud and other forms of illegality. "The majority of the tips received this year involved crypto, an area that continues to have pervasive fraud and other illegality," Romero noted in a published statement on the CFTC website. Due to the proliferation of cryptocurrency, the number of retail customers under CFTC's jurisdiction has soared, making the Commission's Whistleblower Program and the Office of Customer Education and Outreach initiatives more crucial than ever. According to Romero, whistleblowers play a vital role in identifying fraudulent activities and interpreting evidence. "The faster we can stop fraud, the more we can protect customers from harm," Romero added. This year's astounding payouts include over $15 million awarded to two whistleblowers whose crucial information and cooperation led to the successful prosecution of multiple enforcement cases. Overall, the CFTC has disbursed a whopping $350 million to whistleblowers, which has contributed to orders for more than $3 billion in enforcement sanctions.

October 31, 2023

Gensler Celebrates Bitcoin Whitepaper's 15th, Urges Crypto Firms' Law Compliance

On the occasion of the 15th anniversary of the Bitcoin whitepaper by Satoshi Nakamoto, Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission (SEC), extended his congratulations via a post on platform X, while also delivering a clear message to crypto firms. In his tweet, Gensler remarked, "If Satoshi Nakamoto went as Satoshi Nakamoto for Halloween, would we be able to tell? Happy 15th anniversary to Satoshi’s famous white paper that started crypto." He then added, "Any crypto companies that are tricking investors should start treating them to compliance with the securities laws." Gensler's words underscore the SEC's stance on the necessity for legal compliance within the crypto sector, particularly aimed at firms engaging in deceptive practices towards investors. This statement reflects the regulatory body's ongoing commitment to ensuring a well-regulated and secure environment within the dynamic and evolving crypto market, balancing innovation with investor protection.

October 30, 2023

Hong Kong Monetary Authority Reveals Potential Value of Digital Hong Kong Dollar in Payment Ecosystem

The Hong Kong Monetary Authority (HKMA) has released the first phase report of the "Digital Hong Kong Dollar" Pilot Plan. As reported by Odaily, the trial phase of the plan has demonstrated potential unique benefits of the digital Hong Kong dollar in three key areas: programmability, tokenization, and instantaneous settlement. The ability to digitize the Hong Kong dollar could facilitate faster, more cost-effective, and inclusive transactions while also enabling newer economic activities. However, since pilot program trials took place on a small scale within a controlled environment, the HKMA maintains that further study and evaluation are necessary to confirm whether the benefits identified can be applied to bigger, real scenarios. The HKMA has yet to make a decision on the official launch of the digital Hong Kong dollar. The Authority will use the experience and results from the first phase to refine possible implementation strategies. The next phase of the project will involve exploratory studies on new use cases for the digital Hong Kong dollar and deeper analysis of the trial results.

October 28, 2023

VanEck Submits Modified Bitcoin Spot ETF to U.S. SEC Following Bitwise's Move

On October 29th, asset management company VanEck reportedly submitted a revised version of their Bitcoin Spot ETF to the U.S. Securities and Exchange Commission (SEC). This news was shared by Bloomberg ETF analyst James Seyffart via social media, according to a report by BlockBeats. This development comes only a few days after Bitwise, a prominent crypto asset management organization, took a similar path. As reported by BlockBeats on October 26th, Bitwise submitted their own modified version of a Bitcoin Spot ETF to the SEC. Seyffart highlighted that Bitwise's submission was, in essence, a response to comments and concerns raised by the SEC. Should the SEC approve Bitwise's product, it is set to trade under the ticker BITB. It remains to be seen if VanEck's revised submission will receive a similar nod of approval from the US regulatory body. This move of submitting revised Bitcoin spot ETFs represent the continuous efforts from various investment companies to receive a green light for Bitcoin ETFs, which have the potential to open up cryptocurrency to a broader investment audience, and foster growth in the digital assets market.

October 25, 2023

BlackRock Fined $2.5M by SEC over Misrepresentation of Investments; Bitcoin ETF Listing Causes Stir

According to Cointelegraph: The United States Securities and Exchange Commission (SEC) has imposed a $2.5 million fine on BlackRock Advisors, LLC, one of the world's largest asset managers. The penalty comes as a result of BlackRock's failure to accurately describe its significant investments in the entertainment industry, according to the SEC. iShares Bitcoin ETF listing on DTCC. Source: DTCC Between 2015 and 2019, BlackRock's Multi-Sector Income Trust (BIT) allegedly made major investments in a print and advertising business called Aviron Group, LLC, through a loan facility. The SEC's accusation centers around BlackRock erroneously classifying Aviron as a "Diversified Financial Services" provider in several of BIT's yearly and semi-annual public reports. Furthermore, the SEC claims that BlackRock misrepresented the interest rate associated with its investment in Aviron. BlackRock identified and rectified these mistakes in 2019. Meanwhile, BlackRock has recently attracted attention in the crypto community due to a proposed spot Bitcoin ETF. The SEC's charges against BlackRock coincided with the listing of its spot Bitcoin ETF by the Depository Trust & Clearing Corporation (DTCC). The sighting of the ETF listing led many to believe that regulatory approval for the product was imminent. Nevertheless, a DTCC spokesperson clarified that the iShares Bitcoin ETF has been listed on the platform since August, with the listing not necessarily indicating regulatory endorsement.

October 24, 2023

Euroclear Settles First Blockchain Bond for World Bank

According to Reuters: Euroclear, one of the world's largest securities settlement houses, has announced its first settlement of a digital note for the World Bank. The bond, which was issued on the Luxembourg Stock Exchange, successfully raised 100 million euros ($106 million) to fund sustainable development activities. The Brussels-based settlement house reported that the event marked the introduction of its new digital securities issuance service. This service allows customers to issue, distribute, and settle fully digitalised international security using distributed ledger technology (DLT) or blockchain, the technology behind cryptocurrencies. This development reflects the latest move in traditional market infrastructure such as settlement houses into the digital realm as regulatory bodies become increasingly accepting of such technology. Euroclear's digital platform aligns with the European Union's rules for settlement systems and is connected to its core settlement system handling trillions of euros in securities worldwide. "Euroclear Group's CEO, Lieve Mostrey, stated, ""Today’s launch marks an important moment for our clients and for the potential of digital assets."" Citi bank's issuer services acted as the issuing and paying agent, TD Securities as the dealer, and Euroclear Bank as the issuer central securities depository. Anshula Kant, Managing Director and Chief Financial Officer at the World Bank Group, expressed satisfaction at the World Bank's involvement in the new service, especially remembering their previous issuance of the world's first blockchain bond in August 2018. The world of issuing and settling securities on the blockchain is still developing with various pilot programmes but no seamless market facilitating their connection yet. UK Finance reported that despite the growth in digital bond issuance in recent years, it accounted for less than 1% of the $20.6 trillion in long-term fixed income instruments issued in 2021.

October 23, 2023

BlackRock Preps for Bitcoin Spot ETF Launch: Obtains CUSIP, Plans Seed Capital Developments

BlackRock, the world's largest asset manager, is stepping up its efforts for the launch of a Bitcoin spot Exchange-Traded Fund (ETF), as evidenced by recent amendments to its S-1 filing. The financial giant has procured a CUSIP, or Committee on Uniform Securities Identification Procedures number, a prerequisite in the lead-up to the ETF launch. CUSIP numbers serve as distinct identifiers for securities issued within the United States. Beyond this, BlackRock is reportedly ramping up its provisions for Seed Capital, a fundamental infrastructure for launching a new ETF. Seed Capital constitutes assets bought by the issuer itself for the recently launched product to satisfy the prospective demand for ETF shares. As per regulatory norms, a new ETF requires a minimum of 100,000 shares outstanding at launch. To meet this threshold, ETFs generally initiate with a minimum of $1 million in Seed Capital, with the figure often surpassing $2.5 million. BlackRock's recent moves, as discerned from their amended S-1 filing, indicates the company's preparations for a Bitcoin spot ETF are well underway.

October 23, 2023

Thailand Delays Plans to Issue Citizen Digital Currency

The Thai government has postponed its proposed plan to issue digital currency to its citizens. Deputy Finance Minister Julapun Amornvivat confirmed the delay, indicating that the initiative to distribute 10,000 baht (approximately US$280) to each Thai citizen over the age of 16 will not commence before February 1, 2024, as initially planned. Previously, Prime Minister Setah Tasha had proposed issuing around 548 billion baht (approximately US$15 billion) in digital currency - an allotment of roughly 10,000 baht for each Thai citizen above 16. This digital currency distribution was intended to be carried out via a new "super application". The Pheu Thai Party viewed this plan as a pivotal part of their strategy for stimulating economic recovery in Thailand.

October 22, 2023

June 2023 Report: CBDC-Related Projects Witness Participation from 130 Countries

A recent study conducted by the Atlantic Council, an American think tank, reveals that as of June 2023, 130 countries globally are participating in Central Bank Digital Currency (CBDC)-related initiatives. 11 of these nations, including several Caribbean countries and Nigeria, have already introduced their own CBDCs. Sweden, leading the pack, has actively initiated trial operations for its CBDC, indicative of significant progress amongst G20 member nations in this innovative financial technology sector.

October 20, 2023

SEC Wins Default Judgment Against Thor Technologies and Founder David Chin Over Unregistered Crypto Offering

According to CoinDesk: The U.S. Securities and Exchange Commission (SEC) has scored a default judgement against Thor Technologies and its founder, David Chin, over a $2.6 million unregistered offering of cryptocurrency asset securities. This ruling comes from a San Francisco district court nearly a year after the SEC first brought charges against Thor Technologies in December 2022. A default judgment typically happens when the defensive party doesn't meet specific actions, such as attending a trial or meeting document filing deadlines. Thor Technologies and Chin were charged with selling "Thor Tokens" to raise funds for a software platform designed for gig economy workers and companies. These tokens were not registered with the SEC and were promoted as an investment opportunity. Thor announced in April 2019 that it would shut down its operations due to "many regulatory challenges" Under the court's decision, Thor and Chin are prohibited from participating in any cryptocurrency asset securities offering. They are also ordered to disgorge $744,555 with a prejudgment interest of $158,638.06. However, Chin is still allowed to buy or sell securities, including crypto-asset securities, for his personal account.

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