Dub 29

SEC Deals Another Blow, Temporarily Suspends Trading at Bitcoin Generation

The US Securities and Exchange Commission (SEC) took another step backward from Bitcoin this morning by suspending all trading in securities of Bitcoin Generation (BTGN), the first publically traded cryptocurrency exchange. 


The suspension will take place from 9:30 AM EDT to 11:59 PM May 10. The SEC announced that this will be a temporary suspension of trading in the securities of Bitcoin Generation, a publically traded cryptocurrency exchange from Bartlesville, Oklahoma.

Purportedly behind the suspension are key concerns about the accuracy and validity of information BTGN has put in the marketplace. Specifically, the regulator points to public statements over the viability of a bond BTGN allegedly acquired from a UK-based entity.

Moreover, the amount of BTGN’s outstanding common stock and promotional activity have been called into question. The Securities and Exchange Commission is also concerned over the impact that its promotional activity has on the market. There are even doubts over the lack of public information regarding BTGN’s financial state. 

us securities exchange commission

Trade and Face Consequences, Says SEC

The SEC has made it clear that any shareholder, prospective purchaser, or broker-dealer should take the above-mentioned concerns very seriously. They should be extremely cautious when reviewing the information available, as well as any subsequent information issued by the company.

Moreover, all brokers and dealers should understand that no quotation should be entered into even after the suspension is lifted unless it strictly complies with the provisions of Rule 15c2-11. Brokers and dealers who enter quotations that violate the rule in any way will face “prompt enforcement action.” 

Bitcoin ETF

More Anti-Bitcoin Attitude from Regulators

While the fate of Bitcoin ETFs still hangs in the balance and many cryptocurrency companies remain uncertain about their futures, the SEC marks yet another hostile action against Bitcoin.

In October of last year, the U.S. regulator also suspended securities trading at the American Retail Group, Inc. (ARGB) over false cryptocurrency-related claims. 

What do you think of the SEC’s suspension of Bitcoin Generation? Let us know your thoughts in the comments below! 


Images courtesy of Shutterstock.

The Rundown

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Pro 09

Bitcoin Price Analysis: BTC Bounces But Bears Still in Control

Bitcoin price just pulled off a nice 10% bounce with the next level of resistance at $3,700. Let’s take a look at what can happen next?


Bitcoin Price: Market Overview

Bitcoin price 00 dropped to a new yearly low at $3,210 and the overall market cap now rests at $110.6 Billion. Clearly, bears are still running the show for BTC and the SEC’s  final postponement of a Bitcoin exchange-traded fund decision didn’t seem to help.

Crypto-fanatics will now need to wait until January 24th for the launch of Bakkt and February 26th for a final approval or denial of a Bitcoin ETF from the SEC. If the cryptocurrency markets’ trend reversal is dependent upon either of these events then we’ve got a long way to drop waiting on the unpredictable outcomes of each of these events.

4-HR Chart

Bitcoin 00 broke below the $3,550 and $3,400 supports and the cryptocurrency will likely mean that $3,700 will post a stiff resistance to overcome. However, at press time, BTC price has managed to break above the $3,600 mark and now looks poised to test $3,700.

The bounce from $3,210 to $3,615 was pleasant and seems to have caused shorts to cover, but bulls couldn’t muster enough follow through to maintain the move and BTC’s failure to cross above any of the overhead exponential moving averages show bears are still running the show.

This is also backed up by the extremely high number of shorts on BTC/USD and the fact that they snapped right back into place after yesterday’s bounce.

BTC Shorts

After taking a glance at the daily and weekly RSI, Stoch, and MACD there’s not much positive to say about BTC short-term future. Perhaps the silver lining of all this will be that the bears are uber-confident right now and an all-time high amount of shorts can be forced to cover (like yesterday) when Bitcoin pulls off a 10% bounce.

In the past, Bitcoin has shown a propensity for weighty 20%+ rallies. A strong upside move would force shorts to cover and provide rapid gains for those trading BTC at the current range.

Daily RSI / Stoch / MACD

Weekly RSI / Stoch / MACD

Monthly Chart

Now for a dose of reality. If bears don’t let up, BTC can drop to 3,000, $2,545, and $1,400.

Safe trading friends and please remember to always use a stop loss. More cautious traders might want to wait until Q2 and Q3 of 2019 in hopes of a trend reversal.

[Disclaimer: The views expressed in this article are not intended as investment advice. Market data is provided by Bitfinex. The charts for analysis are provided by TradingView.]

Where do you think Bitcoin will go over the short-term? Share your thoughts in the comments below!


Images courtesy of Shutterstock, Trading View. Market data sourced from Coinbase.

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Lis 30

Max Keiser Interview: Bitcoin Will ‘Gobble Up All Fiat’ and Rise Over $100K

Bitcoinist once again caught up with the one and only Max Keiser, Wall Street veteran and host of the Keiser Report. He explains why he isn’t fazed about the Bitcoin price drop, why he pays no attention to ICOs, and why Bitcoin will be around longer than humans. 


‘Bitcoin is the monetary black hole’

Bitcoinist: Since we last spoke in April, Bitcoin has taken quite a tumble in USD price and has had a pretty bad 2018 overall. Why did price drop? 

Max Keiser: The Bitcoin protocol is genius and the more you understand it, the more clarity you achieve. With this in mind, let me answer your questions.

The Bitcoin price got way ahead of itself and we saw a typical pullback. Since I first started buying BTC in 2011 at $1, I’ve seen a few of these.

Many are predicting a prolonged ‘crypto winter’ similar to 2014-2016. Do you see it lasting two years like last time or is it different this time?

The long-term chart is fine. It’s still bullish. Keep in mind, my cost basis is under $200. 

Are we seeing the end of ICOs? Or will they just morph into STOs and become compliant with SEC regulations?

We have given virtually no attention to ICOs because, as I’ve said on my show, ICOs are securities and fall under the regulatory jurisdiction of the SEC. As a former Wall St. stockbroker, I am trained never to try and second-guess the SEC.

When tech bros approach me with their opinion about how the SEC should rule, and what the SEC “doesn’t understand,” I laugh. I’ve seen it all before over my 30-year career. Human nature never changes. Insta-wealth makes people think they’re bulletproof.

Why do you think Bitcoin has been seemingly coupled with stock market performance recently with tech stocks in particular?

Good question. I think the market sees Bitcoin as a ‘risk on’ asset, so it moves in unison with stocks. At some point, the market will understand that Bitcoin, like Gold and cash, is a ‘risk off’ asset. When the market realizes this, we’ll see ATH as safe-haven, capital flight money moves into Bitcoin. 

In September, the Fed raised interest rates by 25 basis points, the highest since April 2008. You ’ve said many times on your show that “you can’t taper a Ponzi scheme.” Are we in for another financial crisis?

We never left the financial crisis. The number of zombie banks and zombie corporations has increased, masked by Fed money and accounting tricks like leveraged stock buy-backs. The dislocations and malinvestments have steadily increased.

The social metrics (in the US) like infant mortality and life expectancy continue to fall apart. The ravages of the 2008 GFC continue to debase our economy and society, but not for folks over at CNBC, CNN, MSNBC, etc., so the truth never gets reported.

How do you think Bitcoin would behave in conditions similar to the ’08 crisis today? 

The long-term trend is intact and will continue its upward path. 

What are your thoughts on the soaring LocalBitcoins volumes in Venezuela? Why is Bitcoin useful for Venezuelans?

Against the Bolivar, Bitcoin, and Gold have had incredibly powerful upward moves. Only using the $USD to map BTC’s performance and impact is shortsighted and misleading.  Think global.

Petro

Can national ‘cryptocurrencies’ like Venezuela’s ‘Petro‘ compete with Bitcoin?

No. Too centralized.

What do you think of Bitcoin Cash’s so-called ‘hash war‘ that we’ve just witnessed?

The protocol has rejected these bad actors. This is what Bitcoin maximalism is all about. Understanding that only Bitcoin has the power to create a fiat-free world while simultaneously destroying all that get in the way. 

What’s the biggest threat to Bitcoin in your opinion?

Bitcoin is the monetary black hole that will gobble up all fiat and rise to more than $100,000 doing it. But humans themselves may never see that day.

I have more faith in BTC than I do in humans surviving the ecological holocaust we’ve triggered with our collective stupidity. Bitcoin might only be used by our robot successors. Ironically, they don’t care about price.

Do you agree with Max Keiser? Is Bitcoin a monetary black hole for fiat? Share your thoughts below!


Images courtesy of Shutterstock

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Lis 26

Bitcoin ETF ‘Definitely Possible,’ SEC Commissioner Confirms

SEC commissioner, Hester Peirce, recently appeared on the ‘What Bitcoin Did’ podcast, confirming that a Bitcoin ETF was definitely possible.


‘I Dissent’

The most notably pro-bitcoin SEC commissioner, Hester Peirce, appeared on the ‘What Bitcoin Did’ podcast at the weekend. Whilst unwilling to describe a future Bitcoin ETF as inevitable, she did confirm it was definitely possible.

Peirce first won the hearts of the crypto-community with her ‘statement of dissent’, following yet another denied Winklevoss ETF application. In the statement made in July, she publicly disagreed with the Commission’s view, that Bitcoin was not “ripe enough, respectable enough, or regulated enough to be worthy of our markets.”

She felt that the SEC had gone beyond its jurisdiction, in assessing the underlying asset, rather than the specific market that it would trade in.

In the podcast she reasserts that the SEC has a specific mandate, to uphold the regulatory framework. She believes that the SEC should allow for innovation within that framework and not become interventionist.

‘Crypto’ Not A Free Pass

Peirce explains that the SEC has brought in specialists to advise in the area of cryptocurrency, who have led the agency to take to a cautious approach. She believes that it is right to pursue those who use “crypto” in an attempt to scam people out of money but is pushing to allow more scope for innovation.

Just because you are calling something Crypto does not mean you can ignore the rules we have had in place for years… but I do think we also need to be willing to open the doors a little bit wider for innovation.

She stresses that although so far all cryptocurrency ETF applications have been rejected, they are still open.

Ongoing Relationship

Peirce points out that the commissioners have been inviting comments from the public, and that this process is extremely useful. The applications are an ongoing relationship or conversation, the SEC’s orders following denial simply point out issues to address.

One the face of it, it may seem like the SEC is poking around and trying to cause issues but in reality, it might be the opposite.

Peirce explains that many comments enquire about the timing of the route to final approval, but this is not so easy to answer. Each proposal is assessed on its own merits, and each is designed differently. So when a particular proposal will convince three of the five commissioners is hard to say.

Peirce suggests it must run its course.

Meanwhile, this month Switzerland approved the first Bitcoin ETP to trade on the Six Stock Exchange. This is the main stock exchange in Switzerland and the fourth largest in Europe. So it seems the winds of change are blowing and it can only be a matter of time before they reach across the Atlantic.

Will the Bitcoin ETF be approved by the final deadline in February? Let us know below!


Images courtesy of Shutterstock

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Lis 22

Kraken ‘Named’ in SEC Investigation, Calvin Ayre Claims as Bitcoin Cash Forks Go Live

The controversy surrounding the Bitcoin Cash (BCH) hard fork is increasingly engulfing cryptocurrency exchange Kraken as the altcoin’s proponents take aim at its treatment of its two forks.


Deposits, Withdrawals And Up To 30 Confirmations

After BCH split into ABC and SV forks, Kraken opted to keep the BCH ticker to describe ABC, crediting users with SV tokens while describing it as an “extremely high risk investment.”

SV has suffered a tumultuous first few days as a standalone fork of BCH, a blockchain reorganization sparking claims of overt centralization from some of Bitcoin’s best-known names.

Since trading opened on Kraken, SV tokens have changed hands for less than $30. Deposits and withdrawals begin today, subject to 15 confirmations for ABC and 30 for SV.

Ayre: Kraken ‘Mentioned’ in SEC ‘Investigations’

Retaliating on social media, SV proponent Calvin Ayre hit back at Kraken’s decision to use the BCH ticker for rival chain ABC, further claiming that both entities were part of unnamed legal proceedings by US regulators.

“(My) current prediction is that ABC chain will collapse and BCH will remain Satoshi Vision as the most likely outcome of the hash war,” he wrote on Twitter November 21.

Criminal and SEC investigations are under way in the US based on docs leaked to us. Kraken named also.

bitcoin cash calvin ayre

Ayre did not provide evidence for the accusations, which he’s promising to release “next week.”

While Kraken has yet to publicly react, Ayre’s words could well end up buried beneath the mountain of rhetoric, which has emerged on social media from all parties in the BCH debacle over the past week.

SV sources have been particularly vocal, nChain chief scientist and self-proclaimed Satoshi Nakamoto Craig Wright accusing ABC’s lead figures of myriad transgressions.

“You are my enemy,” he allegedly told Bitcoin.com owner Roger Ver in an email before the hard-fork.

BCH recorded the biggest drop of all the top twenty cryptocurrencies by market cap over the past 24 hours at around 7.5 percent, data from Coinmarketcap shows.

What do you think about Calvin Ayre’s accusations? Let us know in the comments below!


Images courtesy of Shutterstock, Youtube.com

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Lis 08

EtherDelta Founder Charged with Operating ‘Unregistered Securities Exchange’

The Securities and Exchange Commission (SEC) pressed formal charges against Zachary Coburn, the founder of cryptocurrency trading platform EtherDelta, for not registering his company as a national securities exchange.  


Required to Register

According to an official press release, the SEC has taken action against the founder of digital token trading platform EtherDelta, Zachary Coburn.

According to the Commission’s order, EtherDelta constitutes an online platform for secondary market trading of ERC20 tokens — most of which are usually issued through an initial coin offering (ICO). Furthermore, the SEC has found that almost all of the orders which have been placed through the platform have taken place after its 2017 DAO Report. According to it, certain digital assets, DAO tokens included, are considered securities and, hence, their trading is subject to the Commission’s requirement that exchange register or qualify for an exemption.

According to Stephanie Avakian, Co-Director of SEC’s enforcement arm, EtherDelta did neither of those, stating:

EtherDelta had both the user interface and underlying functionality of an online national securities exchange and was required to register with the SEC or qualify for an exemption.

Fines and Penalties Already Paid

The release also says that Zachary Coburn has already paid $300,000 in disgorgement, $13,000 in prejudgment interest, as well as a $75,000 penalty.

However, he hasn’t admitted to anything and the investigation is continuing. Still, the SEC recognizes his cooperation, stating that it may have prevented an even greater penalty.

According to Steven Peikin, Co-Director of the SEC’s Enforcement Division, existing legislation needs to be followed carefully in order to protect investors in times of “significant innovation.” Noted Peikin:

We are witnessing a time of significant innovation in the securities markets with the use and application of distributed ledger technology. But to protect investors, this innovation necessitates the SEC’s thoughtful oversight of digital markets and enforcement of existing laws.

Do you think the SEC has merit to press charges against EtherDelta? Don’t hesitate to let us know in the comments below! 


Images courtesy of Shutterstock.

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Zář 29

‘Nothing At All’ Going on With Crypto Regulation, Says D.C. Insider

Despite the growing importance of the cryptocurrency industry, the US government’s position on crypto regulation remains frustratingly opaque. According to a D.C. insider, a movement towards real regulation or greater regulatory guidance is still quite far away.


Regulatory Uncertain

Questions about how the government intends to regulate the crypto industry abound. For example, it is still unclear to many investors whether crypto regulation will ultimately come from the SEC or the CFTC.

While there remains no widespread movement in Washington towards reforming the crypto regulatory environment, there are encouraging signs that pockets of Congress are beginning to take interest in the cause.

Beginnings of Congressional Action?

On September 24th, Rep. Warren Davidson (R-OH) hosted industry leaders from Wall Street, Silicon Valley, and the crypto industry for a roundtable discussion on the crypto regulatory environment. Davidson’s roundtable, titled “Legislating Certainty for Cryptocurrencies,” was held at the Library of Congress. Roughly eighty thought leaders from the private sector attended the roundtable, with multiple members of Congress and their aids in attendance as well.

Davidson stressed the importance of industry being involved in crafting the government rules that will eventually govern the crypto space.

Congress

Congressional Letter to the SEC

Following the roundtable, Davidson and fourteen other Representatives issued a public letter to SEC chairman Jay Clayton requesting that the SEC issue clarification on whether Initial Coin Offerings are considered security sales. The Representatives used the letter to express concern that all tokens were being treated as securities, regardless of whether the designation was applicable or relevant. The letter stated:

Therefore, we believe is important that all policy makers work toward developing clearer guidelines between those digital tokens that are securities, and those that are not, through better articulation of SEC policy, and, ultimately through formal guidance or legislation.

The letter went on to express concern that existing guidance on SEC policy is being conveyed solely through enforcement action, leading market participants forced to try to divine SEC policy through the scope of its enforcement actions. The letter continued:

Additionally, we are concerned about the use of enforcement actions alone to clarify policy and believe that formal guidance may be an appropriate approach to clearing up legal uncertainties which are causing the environment for the development of innovative technologies in the United States to be unnecessarily fraught.

Legislstion

New Legislation Begins to Emerge

While no major legislation has been introduced to cover the crypto industry, U.S. Representative Tom Emmer (R-MN) has introduced a slate of three bills designed to encourage support for the crypto industry. Emmer’s bills propose only minor changes to how cryptocurrency is regulated in the U.S.

Concerns about the regulatory status of various crypto projects have encouraged many entrepreneurs and firms to decamp to more stable regulatory climes. For example, Switzerland’s “light-touch” regulatory policy has fueled the dramatic growth of the industry in the country.

While it is encouraging to see the government finally begin to take interest in the crypto industry, the Congressional letter stressed that SEC guidance would take time to fully emerge and develop. Start-ups and entrepreneurs hoping for greater regulatory clarity will likely still have a long time to wait.

Will U.S. regulators eventually wake up? Let us know in the comments below!


Images courtesy of Shutterstock, Twitter/@.

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Zář 15

SEC and Institutional Investor Backing: A Question of Custody

One of the last major hurdles to the widespread institutional adoption of cryptocurrency is the issue of custody — where to securely store all those high-paying clients’ assets. Fortunately, several companies are currently working on a solution to this piece of the puzzle.


A Universal Question

Custody is a question that perhaps anyone who has owned crypto has considered — or failed to at their own peril. I.e., Where am I going to keep my Bitcoin (BTC) 00 — or other tokens —safe?

In the early days, some were happy enough to leave their crypto in the safe hands of the exchange where it was bought. Until a series of high profile hackings highlighted just how untrustworthy those hands may be.

The crypto community possesses online desktop and mobile wallets, hardware wallets, and even paper wallets, depending on how sensible/paranoid we are. Now imagine dealing with millions of dollars worth of someone else’s money.

Assured Security

Institutional investors are accustomed to having their assets safely stored or FDIC insured. For institutions holding assets of over $150 million dollars, use of a third party custodian is an SEC requirement. So for larger companies, self-custody (managing their own private keys) is not even an option.

Smaller retail and family offices may utilize offline cold-storage methods or even keep assets on an exchange. But there is a clear need for some entity to fill the role of secure, regulated custodian. Managing private keys in the way that Wall Street custodians manage traditional asset classes.

Regulatory Scrutiny

One of the companies aiming to fill that niche is BitGo. Yesterday BitGo became the first regulated service for storing digital assets when it received a state trust company charter from the South Dakota Division of Banking.

https://medium.com/@mikebelshe

CEO and Co-founder, Mike Belshe said:

This is the missing piece for infrastructure — it’s a treacherous environment today… Hedge funds need it, family offices need it, they can’t participate in digital currency until they have a place to store it that’s regulated.

The Alternatives

Aside from BitGo, there are several companies vying for a place at the custodial table. They include Coinbase, Gemini, Ledger and ItBit, who are all developing solutions. Nomura partnered with Ledger and Global Advisors to announce plans for a custody solution in May. Even Goldman Sachs recently announced plans for their entry into the market.

An influx of institutional investors could be the exact boost the current crypto-market needs. For the SEC to get on board and realize this vision, there really is no alternative to a regulated custodian service.

What are your thoughts on custodial services in the crypto landscape?


Images courtesy of Medium, Shutterstock.

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Srp 23

SEC Rejects Applications for 9 Bitcoin ETFs

The SEC has said no to applications for nine different Bitcoin ETFs. Applications came from ProShares, Direxion, and GraniteShares.  


Nine applications to list and trade different Bitcoin ETFs were rejected by the SEC, according to three different releases dated August 22nd.

The regulatory agency (predictably) rejected five proposed ETFs from Direxion, two from Proshares, and two from GraniteShares. The SEC cited concerns over fraud and manipulation as the main reasons for the rejection.

The official deadline for the ProShares decision was August 23, while GraniteShare’s offering was slated for September 15. Many were curious to see how the SEC’s decision would play out, as any sort of positive news would certainly send Bitcoin price 00 upwards.

Many were curious to see how the SEC's decision would play out, especially since any sort of positive news would certainly send Bitcoin prices trending upwards.

A Flurry Of Rejections

In each report, the SEC listed specific reasons that led them to reject each application. But in all three releases, the agency wrote:

[T]he Commission is disapproving this proposed rule change because, as discussed below, the Exchange has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.

The SEC also noted how none of the applications convinced them that the Bitcoin futures market was of “significant size.” According to the SEC, this failure is important because the applications have “failed to establish that other means to prevent fraudulent and manipulative acts and practices will be sufficient, and therefore surveillance-sharing with a regulated market of significant size related to bitcoin is necessary.”

However, the SEC did note:

Its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment.

The latest round of rejections by the SEC is nothing new to cryptocurrency enthusiasts who are excited about the idea of a Bitcoin ETF.

Echoes of Previous Rejections

The latest round of rejections by the SEC is nothing new to cryptocurrency enthusiasts who are excited about the idea of a Bitcoin ETF.

Last year, the agency rejected an ETF proposal from Cameron and Tyler Winklevoss, known as the Winklevoss Bitcoin Trust. In July, the SEC rejected a rule change proposal the two brothers submitted after the initial rejection.

The agency said they denied the proposal due to concerns about investor protection. At the time, the regulatory body pointed out how Bitcoin was subject to fraud and manipulation carried out from offshore markets that were unregulated.

Now, all eyes are set to wait for the SEC’s decision about the CBOE Bitcoin ETF proposal. Some legal experts think the SEC will probably hold off until 2019 on making a decision about their proposal. In the meantime, CBOE has been fairly active in working with the SEC to mitigate concerns.

What do you think about the SEC’s latest rejections? Will the commission eventually approve a crypto ETF? Let us know in the comments!


Images courtesy of Bitcoinist archives, Shutterstock

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Srp 09

Pantera Capital CEO Says Investors ‘Overreacting’ to Bitcoin ETF Delay

Dan Morehead, CEO of Pantera Capital, calls for calm in light of the delayed SEC decision on Bitcoin ETF.


In a continuing saga between investors and the Securities and Exchange Commission (SEC), Dan Morehead calls for long-term thinking. This assurance comes amidst a tumultuous affair involving legislators, regulators, and investors alike.

10,000 Years?

According to CNBC, Morehead says the following in regards to Tuesday’s SEC decision:

I still think it will be quite a long time until an ETF is approved. The last asset class to be approved for ETF certification was copper, and copper has been on earth for 10,000 years.

After the SEC postponed its decision on a Bitcoin 00 ETF Wednesday, a bearish dip ensued. Subsequently, Morehead went on to acknowledge the following regarding the dip and ensuing fears:

The main thing to remember is that bitcoin is very early-stage venture, but has real-time price feed — and that’s a unique thing. People get excited about the price and overreact

Rather than feeling pessimistic, the Pantera Capital man pointed towards new ventures like the Starbucks Bakkt project saying:

That is going to be a very profound impact over the next five or 10 years for the markets, and, to my mind, that’s what people should be focused on.

A Positive Outlook

Morehead says “It’s all perspective,” as he pointed towards the fact that cryptocurrencies retain an 82% consistency. CNBC’s Chloe Aiello notes that,

Bitcoin was last down 6.3 percent at $6,288.30, which still makes it about 82 percent higher year on year[…]

Regardless of bearish markets and often unstable outlooks, Morehead remains a proponent of optimism in an ever-changing financial landscape.

What do you think about Dan Morehead’s insight? Tell us your thoughts in the comments below!


Images courtesy of Shutterstock, Twitter

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