Crypto Weekly: SEC Rejects Bitwise ETF Halts Telegram ICO, UNICEF Launches Crypto Fund

Crypto News

Key Highlights

  • UNICEF Initiates Crypto Fund
  • CFTC Could Approve Ethereum Derivatives Trading 
  • Global Exchanges Urge FCA To Back Down On Its Proposed Ban On Crypto-Linked Derivates
  • BitFinex and Tether Slapped With a Lawsuit Alleging Market Manipulation
  • SEC Rejects Bitwise’s Bitcoin ETF
  • Telegram’s $1.7 Billion ICO Halted by SEC

UNICEF Announces Crypto Fund

The United Nations’ children welfare agency, UNICEF recently announced the formation of the UNICEF Crypto Fund. The prototype will begin with accepting Bitcoin and Ethereum donations. The proceeds of the donation will be invested in blockchain projects that favor UNICEF’s cause. The contributions in BTC and ETH will not be converted into FIAT or any other investment asset as well; it will be put directly into the development of blockchain. The Crypto Fund will be put into innovation projects on the blockchain.

The funds have been limited to no more than 1,000 Bitcoins and 10,000 Ether. The fund has already received its first donation of 1 BTC and 10,000 ETH from the Ethereum Foundation. In total, the existing Innovation Fund has already backed six blockchain companies in a portfolio of 72 companies from 42 nations.

Ethereum Derivatives – No Longer a Distant Reality

Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbert in All Markets Summit by Yahoo Finance spoke about Ether(ETH) being a commodity and thus should fall under the jurisdiction of CFTC. He further hinted on Ether Futures trading in the US markets in the near future.

He further mentioned that per his view as the Chairman of the CFTC, Ether is a commodity. Thus, resonating with SEC’s previous ruling that Bitcoin and Ether are not securities. Furthermore, he said that CFTC is working in close cooperation with the SEC to provide clarity on these issues.

Long back in 2015 CFTC had said that Bitcoin and other virtual currencies are commodities. This was even before the SEC deemed cryptos as commodities. Interestingly, this is the first time CFTC has spoken any such thing about Ether.

Will FCA Ban Crypto Derivatives?

Following FCA’s proposed ban on derivatives assets linked to cryptocurrencies such as bitcoin, global exchanges are urging FCA to reconsider its proposed ban on these asset types and continue to allow retail consumers to trade these assets on their platforms.

Britain’s financial watchdog, Financial Conduct Authority (FCA) in July reported that crypto assets were ill-suited to retail investors who couldn’t make informed financial decisions. Therefore, the financial authority proposed to ban crypto-linked derivatives next year. The final changes will be announced in early 2020.

Are Tether and Bitfinex Manipulating the Market?

Crypto Exchange BitFinex and stablecoin Tether (USDT) have found themselves in fresh trouble again. This time, a New York-based law firm, Roche Freedman LLP has slapped a lawsuit against iFinex and associated companies and individuals, accusing them of collectively using cryptocurrency to “defraud investors, manipulate markets, and conceal illicit proceeds”.

The plaintiffs – Roche Freedman LLP have alleged that BitFinex and Tether were two enterprises used in “Part Fraud, Part Pump and Dump and Part Money Laundering.” According to the Class Action Complaint lodged with the United States District Court, South District of New York, the two “commingled their corporate identities and customer funds while concealing their extensive cooperation in a way that enabled them to manipulate the cryptocurrency market with unprecedented effectiveness”.

The complaint also highlights that the two companies were majorly responsible for the 2017 crypto bull run. According to the Tether minted 2.8 billion USDT from 2017 to 2018 and used the token to “flood the Bitfinex exchange and purchase other cryptocurrencies”. As a result of this, the demand for cryptocurrencies got artificially inflated and caused a massive surge in cryptocurrency prices.

No Bitcoin ETF in 2019

The Securities and Exchange Commission has rejected Bitwise’s ETF proposal citing fake volume at cryptocurrency exchanges. This move marks the end of any possible debut of a Bitcoin ETF at any exchange in 2019.

The SEC has refused several applications over the years. Subsequently, Bitwise has presented an extensive research piece and made presentations to the SEC staff to convince them of the requirement of an ETF in the crypto market. In its filing, the former presented its case that the spot prices were derived from the ‘real’ Bitcoin market which consisted of 10 cryptocurrency exchanges. They further alleged that these markets were resistant to manipulation. However, per the federal agency’s mandate, the filing stands rejected and it remains unconvinced.

Telegram $1.7 Billion ICO halted by SEC

The Securities and Exchange Commission (SEC) in a recent has filed an emergency action and obtained a temporary restraining order against two major offshore entities backing Telegram’s TON digital token offering.

Per Telegram’s plan of action, it had promised the delivery of Gram tokens to initial purchasers by October 31, 2019. SEC has alleged that the former failed to register the sale and offering of Grams. The reason given for not registering was states as the tokens are securities.

The SAFT (Simple Agreement for Future Tokens) sale, which was only sold to accredited investors. The deal brought in about $1.7 billion. Gram tokens were sold at a price of around $1.33 and $0.67 initially in the private ICO.

Reportedly, in August reports for a Gram token’s secondary black market started surfacing. There were many over-the-counter (OTC) desks, sales on small cryptocurrency exchanges, and at least one investment fund which were allegedly selling those tokens in the market.

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