Bitcoin May Go Boom: A Guide to This Week's Big SEC Decision (Update)

[Update: The SEC rejected the ETF proposal on Friday afternoon, causing the price of bitcoin to slump.]

Bitcoin is at a critical juncture. Any time now, the Securities and Exchange Commission will issue a decision that could throw open the door to a flood of new capital, and change how many investors regard the digital currency.

The SEC’s bitcoin decision, which is over three years in the making, is due by Friday. Here’s a plain English guide to what might happen, including why the decision is so important and how it could affect the price of bitcoin.

What’s the SEC decision?

The agency must decide if the BATS stock exchange can change its rules to offer a bitcoin ETF (exchange traded fund), which would let people buy bitcoin like a common stock. The ETF—called the Winklevoss Bitcoin Trust ETF—is the creation of the Winklevoss brothers, who once fought Mark Zuckerberg for control of Facebook, and now own a large stock of bitcoins.

Why is this ETF such a big deal?

It’s all about liquidity. While there are plenty of places to buy bitcoin, many investment funds can only hold assets that meet certain regulatory standards—such as approval from the SEC. If the agency approves the ETF application, money managers who want to include bitcoin in their portfolio are likely to jump in. Meanwhile, millions of ordinary people will have an easy new way to buy the digital currency. I can’t really phrase it any better than this quote from BitMex, a bitcoin analysis site:

If the SEC approves the Bats rule change, all manner of American muppet retail investors can yolo into Bitcoin via a regulated ETF. The pool of eligible money that can easily obtain exposure to Bitcoin will dramatically rise. There are various predictions about the amount of money that could flow into Bitcoin. In short, it will be Yuge.

Where and when will we see the decision?

The SEC is obliged to make the decision by March 11, which is this Saturday. That means the ruling is almost certain to come out on Thursday or Friday.

According to Blake Estes, an alternative asset expert at the law firm Alston & Bird, the decision will appear on this SEC web page, and everyone will find out at the same time.

What are the odds the SEC says yes?

People are calling this a coin toss. Those who think the SEC will approve the ETF point to the skillful work carried out by the Winklevoss lawyers, and to the fact that bitcoin is far more mainstream than it was even two years ago. Today, many more people—including regulators—are familiar with digital currency and how it works. There is also a sense that a bitcoin ETF is sooner or later inevitable.

Pessimists, on the other hand, can point to two sets of concerns that could lead the SEC to give the thumbs down. The first of these relates to how the Winklevoss intend to run the operation. Some people are uneasy that the proposed ETF would use Winklevoss-controlled businesses to source and store the bitcoins that would back the shares. The other set of concerns lie with bitcoin itself. The digital currency has been subject to wild price fluctuations, driven in part by heists and insider antics. According to Estes, the SEC may worry the agency’s approval of an ETF could lead to a bubble inflated by bitcoin novices—a bubble that could then pop.

“Some fear it could be a good opportunity for legacy players to find the next sucker to take it off their hands,” said Estes.

How will this effect the price?

Bitcoin has been on another tear of late, nudging a record of $1,300 per unit—more than an ounce of gold. Some of this likely reflects investor optimism the SEC will approve the ETF, meaning a future price rise is partly baked-in. Nonetheless, there are broad expectations the short term price of bitcoin will go crazy if the SEC says yes.

If the SEC says no, it will have a negative effect, though probably not a very dramatic one. The reason is there are two other ETF application before the agency. One is called the Bitcoin Investment Trust, and was developed by Barry Silbert, a well known figure in the digital currency world. The other, called SolidX, is distinct in that proposes to insure its bitcoin assets.

As noted above, there is a general feeling that approval for a bitcoin ETF of one type or another is inevitable, and so a rebuff by the SEC to the Winkelvoss proposal would only be a temporary setback.

Should I buy bitcoin?

That’s something only you can decide—preferably after a lot of research. Today, many people see bitcoin as another alternative asset class to add to a diversified portfolio. But bitcoin has an extremely volatile history, and has been prone to spectacular crashes, so if you’re averse to risk, it’s probably not for you.

Bitcoin crashes after the SEC rejects the Winklevoss twins' ETF

Cameron and Tyler Winklevoss. Thomson Reuters Bitcoin is crashing after the Securities and Exchange Commission rejected Tyler and Cameron Winklevoss' proposal for an exchange-traded fund. The cryptocurrency plunged more than 16% in the moments after the decision was released and is now down 14%, or $192, at $1,000 per bitcoin.

"As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest," the SEC said in its release.

"Based on the record before it, the commission believes that the significant markets for bitcoin are unregulated," it continued. "Therefore, as the exchange has not entered into, and would currently be unable to enter into, the type of surveillance-sharing agreement that has been in place with respect to all previously approved commodity-trust ETPs — agreements that help address concerns about the potential for fraudulent or manipulative acts and practices in this market — the commission does not find the proposed rule change to be consistent with the Exchange Act."

2017 has been a volatile year for the cryptocurrency. It gained more than 20% in the first week of the year before crashing 35% on rumblings that China would begin cracking down on trading.

But the cryptocurrency has shrugged off news that China's biggest exchanges started charging a flat fee of 0.2% per transaction, in addition to blocking customer withdrawals. It rallied more than 30% over the past month in the face of that news, as traders speculated the SEC would approve at least one of the three bitcoin ETFs.

Bitcoin rallied 120% in 2016 and was the top-performing currency in each of the past two years. Even with Friday's sell-off, bitcoin is still higher by about 10% this year.

Investor Alerts and Bulletins

The SEC’s Office of Investor Education and Advocacy is issuing this Investor Alert to make investors aware about the potential risks of investments involving Bitcoin and other forms of virtual currency.

The rise of Bitcoin and other virtual and digital currencies creates new concerns for investors. A new product, technology, or innovation – such as Bitcoin – has the potential to give rise both to frauds and high-risk investment opportunities. Potential investors can be easily enticed with the promise of high returns in a new investment space and also may be less skeptical when assessing something novel, new and cutting-edge.

We previously issued an Investor Alert about the use of Bitcoin in the context of a Ponzi scheme. The Financial Industry Regulatory Authority (FINRA) also recently issued an Investor Alert cautioning investors about the risks of buying and using digital currency such as Bitcoin. In addition, the North American Securities Administrators Association (NASAA) included digital currency on its list of the top 10 threats to investors for 2013.

What is Bitcoin?

Bitcoin has been described as a decentralized, peer-to-peer virtual currency that is used like money – it can be exchanged for traditional currencies such as the U.S. dollar, or used to purchase goods or services, usually online. Unlike traditional currencies, Bitcoin operates without central authority or banks and is not backed by any government.

If you are thinking about investing in a Bitcoin-related opportunity, here are some things you should consider.

Investments involving Bitcoin may have a heightened risk of fraud.

Innovations and new technologies are often used by fraudsters to perpetrate fraudulent investment schemes. Fraudsters may entice investors by touting a Bitcoin investment “opportunity” as a way to get into this cutting-edge space, promising or guaranteeing high investment returns. Investors may find these investment pitches hard to resist.

As with any investment, be careful if you spot any of these potential warning signs of investment fraud:

“Guaranteed” high investment returns. There is no such thing as guaranteed high investment returns. Be wary of anyone who promises that you will receive a high rate of return on your investment, with little or no risk.
Unsolicited offers. An unsolicited sales pitch may be part of a fraudulent investment scheme. Exercise extreme caution if you receive an unsolicited communication – meaning you didn’t ask for it and don’t know the sender – about an investment opportunity.
Unlicensed sellers. Federal and state securities laws require investment professionals and their firms who offer and sell investments to be licensed or registered. Many fraudulent investment schemes involve unlicensed individuals or unregistered firms. Check license and registration status by searching the SEC’s Investment Adviser Public Disclosure (IAPD) website or FINRA’s BrokerCheck website.
No net worth or income requirements. The federal securities laws require securities offerings to be registered with the SEC unless an exemption from registration applies. Most registration exemptions require that investors are accredited investors. Be highly suspicious of private (i.e., unregistered) investment opportunities that do not ask about your net worth or income.
Sounds too good to be true. If the investment sounds too good to be true, it probably is. Remember that investments providing higher returns typically involve more risk.
Pressure to buy RIGHT NOW. Fraudsters may try to create a false sense of urgency to get in on the investment. Take your time researching an investment opportunity before handing over your money.

Bitcoin users may be targets for fraudulent or high-risk investment schemes.

Both fraudsters and promoters of high-risk investment schemes may target Bitcoin users. The exchange rate of U.S. dollars to bitcoins has fluctuated dramatically since the first bitcoins were created. As the exchange rate of Bitcoin is significantly higher today, many early adopters of Bitcoin may have experienced an unexpected increase in wealth, making them attractive targets for fraudsters as well as promoters of high-risk investment opportunities.

Fraudsters target any group they think they can convince to trust them. Scam artists may take advantage of Bitcoin users’ vested interest in the success of Bitcoin to lure these users into Bitcoin-related investment schemes. The fraudsters may be (or pretend to be) Bitcoin users themselves. Similarly, promoters may find Bitcoin users to be a receptive audience for legitimate but high-risk investment opportunities. Fraudsters and promoters may solicit investors through forums and online sites frequented by members of the Bitcoin community.

Using Bitcoin may limit your recovery in the event of fraud or theft.

If fraud or theft results in you or your investment losing bitcoins, you may have limited recovery options. Third-party wallet services, payment processors and Bitcoin exchanges that play important roles in the use of bitcoins may be unregulated or operating unlawfully.

Law enforcement officials may face particular challenges when investigating the illicit use of virtual currency. Such challenges may impact SEC investigations involving Bitcoin:

Tracing money. Traditional financial institutions (such as banks) often are not involved with Bitcoin transactions, making it more difficult to follow the flow of money.
International scope. Bitcoin transactions and users span the globe. Although the SEC regularly obtains information from abroad (such as through cross-border agreements), there may be restrictions on how the SEC can use the information and it may take more time to get the information. In some cases, the SEC may be unable to obtain information located overseas.
No central authority. As there is no central authority that collects Bitcoin user information, the SEC generally must rely on other sources, such as Bitcoin exchanges or users, for this type of information.
Seizing or freezing bitcoins. Law enforcement officials may have difficulty seizing or freezing illicit proceeds held in bitcoins. Bitcoin wallets are encrypted and unlike money held in a bank or brokerage account, bitcoins may not be held by a third-party custodian.

Investments involving Bitcoin present unique risks.

Consider these risks when evaluating investments involving Bitcoin:

Not insured. While securities accounts at U.S. brokerage firms are often insured by the Securities Investor Protection Corporation (SIPC) and bank accounts at U.S. banks are often insured by the Federal Deposit Insurance Corporation (FDIC), bitcoins held in a digital wallet or Bitcoin exchange currently do not have similar protections.
History of volatility. The exchange rate of Bitcoin historically has been very volatile and the exchange rate of Bitcoin could drastically decline. For example, the exchange rate of Bitcoin has dropped more than 50% in a single day. Bitcoin-related investments may be affected by such volatility.
Government regulation. Bitcoins are not legal tender. Federal, state or foreign governments may restrict the use and exchange of Bitcoin.
Security concerns. Bitcoin exchanges may stop operating or permanently shut down due to fraud, technical glitches, hackers or malware. Bitcoins also may be stolen by hackers.
New and developing. As a recent invention, Bitcoin does not have an established track record of credibility and trust. Bitcoin and other virtual currencies are evolving.

Before making any investment, carefully read any materials you are given and verify the truth of every statement you are told about the investment. For more information about how to research an investment, read our publication Ask Questions. Investigate the individuals and firms offering the investment, and check out their backgrounds by searching the SEC’s IAPD website or FINRA’s BrokerCheck website and by contacting your state securities regulator.

SEC Charges Texas Man With Running Bitcoin-Denominated Ponzi Scheme

FOR IMMEDIATE RELEASE
2013-132

Washington D.C., July 23, 2013 —

The Securities and Exchange Commission today charged a Texas man and his company with defrauding investors in a Ponzi scheme involving Bitcoin, a virtual currency traded on online exchanges for conventional currencies like the U.S. dollar or used to purchase goods or services online.

The SEC alleges that Trendon T. Shavers, who is the founder and operator of Bitcoin Savings and Trust (BTCST), offered and sold Bitcoin-denominated investments through the Internet using the monikers “Pirate” and “pirateat40.” Shavers raised at least 700,000 Bitcoin in BTCST investments, which amounted to more than $4.5 million based on the average price of Bitcoin in 2011 and 2012 when the investments were offered and sold. Today the value of 700,000 Bitcoin exceeds $60 million.

The SEC alleges that Shavers promised investors up to 7 percent weekly interest based on BTCST’s Bitcoin market arbitrage activity, which supposedly included selling to individuals who wished to buy Bitcoin “off the radar” in quick fashion or large quantities. In reality, BTCST was a sham and a Ponzi scheme in which Shavers used Bitcoin from new investors to make purported interest payments and cover investor withdrawals on outstanding BTCST investments. Shavers also diverted investors’ Bitcoin for day trading in his account on a Bitcoin currency exchange, and exchanged investors’ Bitcoin for U.S. dollars to pay his personal expenses.

The SEC issued an investor alert today warning investors about the dangers of potential investment scams involving virtual currencies promoted through the Internet.

“Fraudsters are not beyond the reach of the SEC just because they use Bitcoin or another virtual currency to mislead investors and violate the federal securities laws,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office. “Shavers preyed on investors in an online forum by claiming his investments carried no risk and huge profits for them while his true intentions were rooted in nothing more than personal greed.”

According to the SEC’s complaint filed in U.S. District Court for the Eastern District of Texas, Shavers sold BTCST investments over the Internet to investors in such states as Connecticut, Hawaii, Illinois, Louisiana, Massachusetts, North Carolina, and Pennsylvania. Shavers posted general solicitations on a website dedicated to Bitcoin discussions, and he misled investors with such false assurances about his investment opportunity as “It’s growing, it’s growing!” and “I have yet to come close to taking a loss on any deal,” and “risk is almost 0.” Contrary to the representations made to investors, BTCST was not in the business of buying and selling Bitcoin at all.

The SEC alleges that Shavers, who lives in McKinney, Texas, paid 507,148 Bitcoin in investor withdrawals and purported interest payments. He transferred at least 150,649 Bitcoin to his personal account at an online Bitcoin currency exchange. Shavers suffered a net loss from his day trading, but realized net proceeds of $164,758 from his sales of 86,202 Bitcoin. Shavers transferred $147,102 from his personal account at the online Bitcoin currency exchange to accounts he controlled at an online payment processor as well as his personal checking account. He used this money to pay his rent, utilities, and car-related expenses as well as for food and retail purchases and gambling.

The SEC’s complaint charges Shavers and BTCST with offering and selling investments in violation of the anti-fraud and registration provisions of the securities laws, specifically Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5. The SEC is seeking a court order to freeze the assets of Shavers and BTCST in addition to other relief, including permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties.

The SEC’s investor alert, prepared by the agency’s Office of Investor Education and Advocacy, recommends that investors be wary of so-called investment opportunities that promise high rates of return with little or no risk, especially when dealing with unregistered, Internet-based investments sold by unlicensed promoters.

“Ponzi scheme operators often claim to have a tie to a new and emerging technology as a lure to potential victims,” said Lori J. Schock, Director of the SEC’s Office of Investor Education and Advocacy. “Investors should understand that regardless of the type of investment, a promise of high returns with little or no risk is a classic warning sign of fraud.”

SEC rejects bitcoin ETF application from Winklevoss twins

The Securities and Exchange Commission rejected an application on Friday that would have opened the door for the first exchange-traded fund for the virtual currency bitcoin.

The SEC denied a request from Cameron and Tyler Winklevoss, the twins famous for suing Facebook founder Mark Zuckerberg, related to a proposed ETF that would track the price of bitcoin and could be bought and sold as easily as stocks. The commission said it rejected the application because the bitcoin exchanges that are now used to buy and sell the virtual currency are not regulated. The SEC said in its analysis that the exchanges are susceptible to “fraudulent or manipulative acts and practices.”

Tyler Winklevoss said in an emailed statement that they would keep working on the ETF. “We remain optimistic and committed to bringing COIN to market, and look forward to continuing to work with the SEC staff. We began this journey almost four years ago, and are determined to see it through. We agree with the SEC that regulation and oversight are important to the health of any marketplace and the safety of all investors.” The Winklevosses had requested for the ETF to trade on the Bats BZX Exchange, a stock exchange.

The virtual currency, which was created in 2010, has had a checkered past in part because of the anonymity it allows users. The currency gained traction as a fast way to send money internationally, but has also been criticized as being vulnerable to hacking or technical crashes.

A bitcoin ETF would allow people to invest in the digital currency in the same way that they can buy funds that track tangible currencies such as the dollar, the yen or the euro, said Todd Rosenbluth, director of ETF and mutual fund research at CFRA. But unlike the more conventional currencies, which are influenced by trends in the economy, decisions by central banks and other metrics, it is more difficult to identify the forces influencing the price of bitcoin, Rosenbluth said.

In its decision, the SEC said that commentators expressed concerns that bitcoin exchanges are subject to price “volatility and instability.” Bitcoin prices have fluctuated as investors have swung from being optimistic about the potentially positive effects of an ETF to being concerned about reports of security breaches or potential investigations.

The price of bitcoin swung widely on Friday as investors worried about the fate of the ETF. The price plunged as low as $1,066 following the decision after surging to a record high above $1,300 earlier in the day, according to the Bitcoin Price Index from CoinDesk, a website that tracks digital currencies.

The rejection may put a damper on other efforts to make the virtual currency widely available to investors through ETFs. At least two other requests for bitcoin ETFs are still pending with the SEC from Grayscale Investments and SolidX.

US Search Mobile Web

Welcome to the Yahoo Search forum! We’d love to hear your ideas on how to improve Yahoo Search.

The Yahoo product feedback forum now requires a valid Yahoo ID and password to participate.

You are now required to sign-in using your Yahoo email account in order to provide us with feedback and to submit votes and comments to existing ideas. If you do not have a Yahoo ID or the password to your Yahoo ID, please sign-up for a new account.

If you have a valid Yahoo ID and password, follow these steps if you would like to remove your posts, comments, votes, and/or profile from the Yahoo product feedback forum.

Vote for an existing idea ( )
or
Post a new idea…

Hot ideas
Top ideas
New ideas
Category
Status
My feedback

Improve your services

Your search engine does not find any satisfactory results for searches. It is too weak. Also, the server of bing is often off

I created a yahoo/email account long ago but I lost access to it; can y'all delete all my yahoo/yahoo account except for my newest YaAccount

I want all my lost access yahoo account 'delete'; Requesting supporter for these old account deletion; 'except' my Newest yahoo account this Account don't delete! Because I don't want it interfering my online 'gamble' /games/business/data/ Activity , because the computer/security program might 'scure' my Information and detect theres other account; then secure online activities/ business securing from my suspicion because of my other account existing will make the security program be 'Suspicious' until I'm 'secure'; and if I'm gambling online 'Depositing' then I need those account 'delete' because the insecurity 'Suspicioun' will program the casino game 'Programs' securities' to be 'secure' then it'll be 'unfair' gaming and I'll lose because of the insecurity can be a 'Excuse'. Hope y'all understand my explanation!

chithidio@Yahoo.com

i dont know what happened but i can not search anything.

Golf handicap tracker, why can't I get to it?

Why do I get redirected on pc and mobile device?

Rahyaftco@yahoo.com

RYAN RAHSAD BELL literally means

Question on a link

In the search for Anaïs Nin, one of the first few links shows a picture of a man. Why? Since Nin is a woman, I can’t figure out why. Can you show some reason for this? Who is he? If you click on the picture a group of pictures of Nin and no mention of that man. Is it an error?

Repair the Yahoo Search App.

Yahoo Search App from the Google Play Store on my Samsung Galaxy S8+ phone stopped working on May 18, 2018.

I went to the Yahoo Troubleshooting page but the article that said to do a certain 8 steps to fix the problem with Yahoo Services not working and how to fix the problem. Of course they didn't work.

I contacted Samsung thru their Samsung Tutor app on my phone. I gave their Technican access to my phone to see if there was a problem with my phone that stopped the Yahoo Search App from working. He went to Yahoo and I signed in so he could try to fix the Yahoo Search App not working. He also used another phone, installed the app from the Google Play Store to see if the app would do any kind of search thru the app. The Yahoo Search App just wasn't working.

I also had At&t try to help me because I have UVERSE for my internet service. My internet was working perfectly. Their Technical Support team member checked the Yahoo Search App and it wouldn't work for him either.

We can go to www.yahoo.com and search for any topic or website. It's just the Yahoo Search App that won't allow anyone to do web searches at all.

I let Google know that the Yahoo Search App installed from their Google Play Store had completely stopped working on May 18, 2018.

I told them that Yahoo has made sure that their Yahoo members can't contact them about anything.

I noticed that right after I accepted the agreement that said Oath had joined with Verizon I started having the problem with the Yahoo Search App.
No matter what I search for or website thru the Yahoo Search App it says the following after I searched for
www.att.com.

WEBPAGE NOT AVAILABLE
This webpage at gttp://r.search.yahoo.com/_ylt=A0geJGq8BbkrgALEMMITE5jylu=X3oDMTEzcTjdWsyBGNvbG8DYmyxBHBvcwMxBHZ0aWQDTkFQUEMwxzEEc2VjA3NylRo=10/Ru=https%3a%2f%2fwww.att.att.com%2f/Rk=2/Es=plkGNRAB61_XKqFjTEN7J8cXA-
could not be loaded because:
net::ERR_CLEARTEXT_NOT_PERMITTED

I tried to search for things like www.homedepot.com. The same thing happened. It would say WEBPAGE NOT AVAILABLE. The only thing that changed were all the upper and lower case letters, numbers and symbols.
Then it would again say
could not be loaded because:
net::ERR_CLEARTEXT_NOT_PERMITTED

This is the same thing that happened when Samsung and At&t tried to do any kind of searches thru the Yahoo Search App.

Yahoo needs to fix the problem with their app.

Yahoo Search App from the Google Play Store on my Samsung Galaxy S8+ phone stopped working on May 18, 2018.

I went to the Yahoo Troubleshooting page but the article that said to do a certain 8 steps to fix the problem with Yahoo Services not working and how to fix the problem. Of course they didn't work.

Bitcoin Price Remains Uncertain Amid Impeding SEC Decision

We have been keeping a close eye to the pending SEC decision which will deny or approve Bitcoin’s ETF for a second time. The price remains uncertain as it tested support multiple times over the weekend. Today, the price dropped over 7% as the correction approached.

While Bitcoin’s price is dropping, the latest spike in volume as the market approached the $1700 support line signals that traders are keeping a close eye on the cryptocurrency.

A chart on tradingview shows in interesting observation and prediction regarding the relationship between the price and the market’s RSI. According to carelkersna:

“Teal line from the break of March highs has acted as resistance in the middle of April. RSI recently (in the end of April) successfully broke through the line and had a nice run to the upside. Now, in the middle of May it is coming back to test the same line, will it act as a support or will it fall right through it?”

In other words, if the market volume stays high and the $1700 support holds, the RSI will top over 70, which should reflect positively in the market. On the other hand, if volume drops, most likely traders will exit their positions in the $1700 level and the price will topple downwards.

Either way, a big move is incoming soon, not only because of the recent market volatility, but also because of the upcoming SEC decision.

On the bright side, Chris DeRose – a Bitcoin evangelist, public speaker, and the lead organizer for the South Florida Bitcoin group – believes that the overall trend for Bitcoin will remain positive barring any political turmoils.

“My suspicion is that all the daily issuance is being snatched up by retail Bitcoin users, so I’d expect that if my hypothesis is true, barring any future big blocker political footballs, we’d see a fairly steady progression in the price, as the market realizes that Bitcoin isn’t actually in a bubble.”

Dislaimer: This is not trading advice, this article is for educational purposes only. If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.

About The Author

Mark is a 24 year old cryptocurrency entrepreneur. He was introduced to Bitcoin in 2013 and has been involved with it ever since. He used to mine bitcoins and altcoins but now focuses on blogging and educating others about digital currencies.

any idea when SEC decision

Nonsense! bitcoin is not in a bubble! What asset have you ever heard of that increased in price like clockwork for nearly three weeks, it’s been riding a crotch rocket for a week and a half ! Its the most obvious bubble I’ve ever seen!!

The digital currency space is new, never before in history have we had anything like this. No one can say if this is a bubble, or just the beginning of a new way to invest money. It’s not just Bitcoin these days, it’s Ripple, Etereum, Dash, Litecoin and hundreds of other blockchain currencies that enable investors to trade 24 hours a day, 7 days a week, and it’s global! Even if it falls, I doubt it will remain down too long. It’s already gained too much traction.

$1.6 billion cryptocurrency exchange Coinbase is reportedly in talks to become a licensed brokerage firm

Coinbase CEO Brian Armstrong Anthony Harvey / Stringer

Coinbase, a $1.6 billion cryptocurrency exchange, has approached regulators about registering as a licensed brokerage, according to The Wall Street Journal.
Registering with the Securities and Exchange Commission (SEC) would allow Coinbase to exchange those cryptocurrencies that the feds determine to be securities.
Though the cryptocurrency space has historically been anti-regulation, the SEC is clamping down.

Coinbase, the $1.6 billion cryptocurrency exchange, has approached the United States Securities and Exchange Commission (SEC) about registering as a licensed brokerage firm and electronic-trading venue, sources told The Wall Street Journal.

Registering with the SEC would let Coinbase expand the cryptocurrencies traded on its platform to include those coins that the SEC identifies as securities — while putting pressure on its competitors to follow suit, according to The Journal.

Coinbase declined to comment for this story.

The SEC hasn't decided yet which digital tokens are considered securities. Until it comes out with more specific guidelines, the commission has recommended that would-be investors follow the Howey Test, created by the Supreme Court in 1946 to determine whether an unconventional financial vehicle requires the same regulation as familiar investments like stocks and bonds.

It's widely believed by people in the space that most cryptocurrencies will be regulated as securities, though many coin creators work hard to establish that their coins are not treated as such. That kind of regulation could mean a lot of red tape for buyers and sellers alike, potentially dampening demand.

For its part, the world of cryptocurrency has been skeptical, if not outright hostile, toward financial regulators. But Coinbase wants to be the Google of cryptocurrencies, and has its eye on expanding its exchange beyond the four coins currently listed — bitcoin, ethereum, litcoin and bitcoin cash.

Though not the largest exchange in the world, Coinbase is regarded as the platform that made bitcoin accessible to the non-techncial masses. The company's policy is to only list coins that it's deemed stable enough over the longterm to trade, as compared with the many volatile tokens out there that routinely experience intense price swings.

Coinbase recently announced that it will add support for a popular type of coin known as ethereum tokens, potentially expanding the number of tokens it can let users trade. However, Coinbase also made clear that it will put off adding any new coins to its exchange until there is more clarity around how the SEC will regulate the space.

Despite its willingness to play ball, however, Coinbase hasn't always had the best relationship with federal authorities.

The company fought the Internal Revenue Service in court last year over its request for information on Coinbase customers who made money trading on the platform. Ultimately, Coinbase was ordered to provide information on around 14,000 customers who made transactions over $20,000 between 2013 and 2015.

Meanwhile, the SEC has been clamping down on blockchain projects and initial coin offerings (ICOs), which have had free reign to do as they please while regulators have struggled to catch up with the technology. On Monday, in one of its most extreme actions to date, the SEC charged two of the founders behind Centra Tech with fraud related to its $32 million ICO.

It's also common practice for blockchain projects to create "tokens" for use within their platforms. Oftentimes, these companies will host ICOs in which they fundraise by selling off tokens to investors. The SEC is looking hard at such tokens in order to decide which ones ought to be regulated.

Bitcoin sec

Bitcoin Futures ETFs: SEC Requests Comment

Apr. 12, 2018 1:05 PM

In December last year the NYSE Arca Inc. filed a proposed rule change that would allow for the creation of Exchange Traded Funds investing in Bitcoin futures contracts, and, potentially, in other related Financial Instruments.

In January 2018 the U.S. Securities and Exchange Commission extended its review of this proposal. Also that month the director of the SEC’s Division of Investment Management outlined her concerns with the idea. These include valuation, liquidity, and transparency.

Most recently, on March 23, the SEC instituted a formal review of the proposal, soliciting comments from the public. Commenters have until April 19 to submit. Those who wish to rebut comments will have until May 3 to do so. The order is available here.

The investment objective of the proposed ProShares Bitcoin ETF will be to seek results that will mirror the performance of lead month bitcoin futures contracts listed and traded on either the CBOE Futures Exchange or the Chicago Mercantile Exchange’s Benchmark Futures Contract.

Comment Letters, and a Novelist

Before issuing the order the SEC had received one comment letter on the subject. This was from Abe Kohen of AK Financial Engineering Consultants LLC (December 27, 2017). It was a brief negative statement. Kohen called the idea of such an ETF a “house of cards” and said that “now mom and dad can lose money going long and short.”

Subsequent to the SEC’s request, three new comments were received on April 6. The most substantive of them is from Anita Desai, who writes that she believes such proposals are premature, since cryptocurrencies “are in their infancies with regard to the widespread understanding of even the fundamentals of what they are, which is a dangerous thing.”

Ms Desai doesn’t identify herself in the comment by any title or institutional affiliation, but there is a well-known Indian novelist of that name who teaches humanities at the Massachusetts Institute of Technology. The SEC’s commenter says, “A lot of people I personally knew lost their entire savings in places like India and Africa, when they drew their entire mutual funds out and plugged cash into ‘Ponzi’ schemes such as ‘Onecoin.’”

Ed Kaleda, of Charlotte, North Carolina, takes a more laissez-faire view. He asks the SEC to “please be open-minded and approve high quality Bitcoin ETFs, a new generation wants the product.”

The third commenter of that day, Scott Moburg, also says that he supports a Bitcoin ETF.

The SEC’s Questions

The SEC’s order lists twelve questions that are especially on its mind, and on which it seeks some illumination from commenters,. The questions, somewhat abbreviated and paraphrased, are as follows:

Has the exchange (NYSE Arca) sufficiently described “how the Sponsors will select the applicable Benchmark Futures Contract, given that the contracts trading on these these two bitcoin futures exchanges have different terms … and trade at different prices?”
The second concern begins with the aspect of the proposed rule that stipulates that the Funds may invest in other financial instruments such as listed options and OTC swaps referencing Bitcoin Futures Contracts. The SEC asks, “What are commenters’ views on the ability of the Funds to invest in Financial Instruments in the event that position, price, or accountability limits are reached with respect to Bitcoin Futures Contracts? What are commenters’ views on the ability of the Funds to invest in Financial Instruments if the market for a specific Bitcoin Futures Contract experiences emergencies or disruptions?”
Would the Funds have the information necessary to adequately value the underlyings when determining an appropriate end-of-day NAV?
How great is the potential impact of manipulation of the underlying markets on the proposed ETF’s NAV? Specifically, the SEC wants commenters to weigh in on the potential impact of such manipulation on the financial instruments discussed in question two above.
How could the Funds’ valuation processes address the issue of a potential blockchain fork?
“What are commenters views on the price differentials and trading volumes across bitcoin trading platforms (including during periods of market stress) and on the extent to which these differing prices may affect the trading” both of the contracts and of the shares in the ETF?
The SEC asks about margin requirements and how might they affect the Funds’ ability to use available cash to achieve its trading strategy?
Also about whether the Funds development would lead to an excess concentration of holdings, that would in turn impact portfolio management, the liquidity of the Funds involved, and the pricing of the underlying contracts or the Financial Instruments?
What possible factors might impede the ability of arbitrage to keep the Funds’ NAV tied to the trading price of the shares? What is the impact on investors if the arb mechanism is impaired?
What is the likely impact of manipulation and fraud in the underlying trading platforms upon trading in the ETFs?
How may investors evaluate the price of shares in the Funds i n light of the concerns alluded to above about arb and manipulation?
Finally, do the two bitcoin futures exchanges constitute a market of sufficient size to support an ETF?

NEWSLETTERS

POLITICO LIVE

COLUMNS & CARTOONS

Bitcoin vs. the SEC

Forget money. Bitcoin 2.0 is about to disrupt everything else. Are regulators ready for it?

04/23/2015 01:56 PM EDT

A couple of miles from Wall Street, on the Western bank of the Hudson River, sits a vault in Jersey City maintained by the Depository Trust & Clearing Company. You might never have heard of the DTCC, but if you own stock, bonds or a mutual fund, it takes care of something that belongs to you.

The DTCC is the clearinghouse for U.S. capital markets. Its Jersey City vault contains about a million physical stock and bond certificates, representing some undisclosed portion of the $43 trillion in total assets the organization holds in custody. This is the center of the entire American stock-trading system. Each share has an owner, and – no matter how fast it changes hands – a clearinghouse keeps track of who owns what.

This year, Patrick Byrne, the CEO of Overstock.com and would-be financial revolutionary, is taking the first steps in a campaign to smash open the vault. Or, really, to eliminate it - and with it, the whole system that makes the vault necessary. On April 1, the Securities and Exchange Commission approved a request by a private stock exchange partnered with Overstock to deal in “digital securities.” On April 24, Byrne filed a Form S-3 with the Securities and Exchange Commission to register $500 million worth of equity in Overstock as the first digital stock, which the agency is currently reviewing. On Friday, the company offered the world’s first-ever digital security, a corporate bond that does not need SEC approval and could be issued in a matter of days.

Byrne wants to use the technology behind Bitcoin to create a securities market that exists not in any one particular place, but as a collection of data distributed across computers anywhere on Earth, with no need for the DTCC, the New York Stock Exchange or any of the other middlemen who oversee the world’s capital markets.

This new system, which he calls Medici, after the banking family that ruled over Renaissance-era Florence, would do something no other stock exchange has ever done. It would skip the centralized clearinghouse entirely, and keep track of trading, clearance, and ownership on everyone’s computers at once. It would transform processes that now depend on centralized institutions for trust, and let people instead transact directly with one another.

By approving these new securities, the SEC has made the federal government’s first foray into regulating Bitcoin 2.0, a technological force on the cusp of sweeping into the mainstream.

When people talk about the real potential of Bitcoin to transform the financial system, they aren’t talking about a digital currency that may or may not ever really take off. They are talking about what Byrne and other Bitcoin 2.0 entrepreneurs are trying to do.

The engine that powers Medici is a new technology called the “blockchain” – the complex, novel computer code that made Bitcoin possible. Unlike an exchange or a clearinghouse, the blockchain – invented and published in 2008 by a mysterious cryptographer known only by the pseudonym Satoshi Nakamoto – is completely decentralized.

The geeks, lawyers and entrepreneurs who spend their days thinking about the blockchain believe that after it’s done with securities markets, it’s poised to disrupt the way we make and enforce contracts, import and export goods, buy and sell digital media, gamble and even vote. They say it will be as revolutionary as the Internet itself, and pose regulatory challenges that are just as far-reaching — not just for FinCen and the SEC, but for Congress, the CFPB, the CFTC, the FTC, the FEC and others. Already, solitary tinkerers and Fortune 100 companies alike are test-driving applications that will demand the attention of many of these agencies.

“For the first time in human history, we can have peer-to-peer exchange where trust is not an issue,” says Byrne, who predicts Bitcoin 2.0 will put much of Wall Street out of business. “This is going to separate the men from the boys.”

For the past 6 years, since the creation of Bitcoin in 2009, regulators have been wrestling with what to do about a “currency” that completely bypasses the central institutions that have helped stabilize money for centuries. Instead of depending on banks, or governments, or bars of gold to establish value and credibility, the bitcoin system creates digital money at a predictable rate, establishes un-forgeable digital signatures for all the players in a market to verify their transactions, and forces every actor to maintain their own record of everyone else’s transactions. So at any given time, anyone in the Bitcoin market is helping verify the behavior of the entire market.

As a result, a lot of activities that required governments or other trusted intermediaries to keep track of things and keep everyone honest can now run on computer programs that belong to no central authority. The original Bitcoin code, for example, creates and transfers money without oversight from the Federal Reserve, highly regulated private banks or anyone else.

That can raise red flags for regulators, and the anti-government ideology spouted by many Bitcoin and blockchain supporters hasn’t helped. The technology is hugely popular with libertarians who are actively rooting for it to usurp national governments’ power over the money supply. Its most enthusiastic early adopters were online black markets. In May, a federal judge in Manhattan sentenced Ross Ulbricht, the founder of Silk Road, an online drug bazaar that ran on anonymous Bitcoin transactions, to life in prison without parole.

It took two years from the cryptocurrency’s inception at the beginning of 2009 for the market value of a Bitcoin to reach $1. Bitcoin’s novelty and relatively low trading volume has made it extremely volatile, and it’s gone through ever-bigger boom and bust cycles since. Its value peaked at over $1000 per “coin” in late 2013, helped along by fears that the European sovereign debt crisis would bring down the euro and its utility in facilitating illegal online transactions. A whole global industry has even sprouted up to build computer servers specially designed for bitcoin “mining,” the complex calculations that help unlock new currency.

But even as Bitcoin became a household name, at attracted attention from entrepreneurs and venture funds, the currency’s value has come down to earth (now hovering between $200 and $300 per coin, with a total market size of about $3.5 billion), while the efforts of entrepreneurs and venture capitalists have increasingly migrated elsewhere.

Understandably, all of the Bitcoin buzz also caught the attention of government regulators. Many Bitcoin backers give American regulators credit for their restraint: Rather than try to eradicate Bitcoin, federal agencies moved to regulate it, or at least set some baseline rules to protect users.

In March 2013, the Financial Crimes Enforcement Network issued guidelines that said digital currency exchanges had to comply with federal anti-money laundering laws. In July 2013, the Winklevoss twins – the entrepreneurs who sued Mark Zuckerberg for allegedly stealing the idea for Facebook from them at Harvard -- filed to register a Bitcoin ETF, which would let investors easily trade shares of Bitcoin on the stock market. That scheme is still awaiting SEC approval. In March 2014, the Internal Revenue Service stated that Bitcoin should be taxed as an asset rather than as currency. In May, the SEC issued an investor alert warning about the risks of investing in virtual currencies; in August, the Consumer Financial Protection Bureau issued an advisory about risks to consumers.

There are also inklings of potential turf wars. In October, the Treasury Department’s Financial Crimes Enforcement Network clarified that companies that facilitate Bitcoin payments or act as Bitcoin brokers will be regulated as money transmitters. In November, a commissioner of the Commodities Futures Trading Commission asserted that Bitcoins were commodities and that the CFTC has the authority to intervene if Bitcoin prices are being manipulated, a position that could set up jurisdictional turf issues if the SEC decides it wants to regulate the cryptocurrency as a security. (Along the way, the SEC has pursued enforcement actions against various Bitcoin enterprises, including a Texas-based Ponzi scheme, for infractions that are not particular to digital currency.)

In popular coverage, Bitcoin itself tends to be the focus of attention, either breathlessly hyped or dismissed as some kind of doomed techie challenge to the dollar. But among people paying close attention, whatever happens to Bitcoin is seen as only the first act. Whether or not Bitcoin itself thrives, more important applications of its technology are likely still on their way.

Byrne and other financial entrepreneurs believe it will rewrite the rules of the financial system by taking out middlemen. Because it gives users anonymity while guaranteeing the authenticity of their actions, other believe it will allow e-voting to become the accepted norm for elections around the world. Because the blockchain allows actors to interact in a trustless environment without a centralized overseer, engineers at IBM are making it the foundation of their version of the Internet of Things, in which our refrigerators and washing machines will have to autonomously interact with someone else’s delivery drones and maintenance robots.

As in the early days of the Internet, most of the applications probably haven’t been dreamt up yet. Take Uber, says, says Jason Somensatto, a Washington lawyer who deals regularly with the SEC and has taken an interest in what blockchain technology might someday do. “If we would have said that to our 1995 selves, that would’ve been crazy, right? You push a button and a car shows up.” And decades after the Internet’s inventions, this new application has spawned policy fights across the country.

“The comparison that you often hear between the blockchain and the early internet is an apt one. There was a lot of suspicion of the early Internet, a lot of dismissal of it as a toy,” says Jerry Brito, executive director of the blockchain-focused think tank Coin Center and a law professor at George Mason University

Although the U.S has been reasonably accommodating to Bitcoin itself, it hasn’t created regulatory clarity for the next round of blockchain applications.

A spokesman for the SEC declined to comment for this story, but lawyers who deal with the agency say that when it comes to financial novelties, the SEC tends to wait until something goes wrong rather than proactively issuing guidance. “A lot of the SEC’s focus is on not so much writing new rules and regulation as it is on detecting violations and enforcing the rules,“ says Somensatto.

That creates a chicken-and-egg conundrum for Bitcoin 2.0. On the one hand, “The SEC doesn’t have much of an incentive to go forth and create guidance that would address this situation,” says Somensatto. “This is not yet a very large industry, so it’s difficult to dedicate a lot of your resources.”

On the other hand, regulatory ambiguity makes it hard for the industry to grow to the point where it does demand the agency’s attention. “Until there’s clarity from the government, I think people are going to tread lightly,” says Aaron Wright, a professor at Yeshiva University’s Cardozo School of Law who is co-authoring a book on legal issues posed by the blockchain. “If the U.S. thinks about this the right way, just like with the Internet, we’ll probably end up dominating it.”

People working on this next wave of blockchain technology say that the UK government, especially the Financial Conduct Authority, has done more than US regulators to signal that it’s open for Bitcoin 2.0 business. Through its Project Innovate, the FCA hand-holds businesses through the regulatory hurdles to launching novel financial products, and even pledges to “identify areas where our regulatory framework needs to adapt to enable further innovation in the interests of consumers.”

Entrepreneurs appreciate the enthusiasm. Joel Dietz, the founder of Swarm, a blockchain-based crowdfunding platform, has found the FCA’s innovation group engaged and easy to work with. He feels differently about the SEC. “If you want to interact with them, you have to have a securities lawyer, and that lawyer’s going to charge you a thousand dollars an hour,” says Dietz. “It’s very, very cost-prohibitive for entrepreneurs, and I think the SEC milks that for all it’s worth. I don’t think they care about entrepreneurs very much.”

Lawyers who study the blockchain say that the courts will determine whether crypto-equity crowdfunding platforms like Swarm are in fact in the securities business, but Dietz says that if the U.S. doesn’t make space for Bitcoin 2.0 applications, entrepreneurs will simply go elsewhere. “The U.S. is far from the only place that people want to create organizations and fund them.”

Brito concurs. “I think that the US should take seriously the idea that if it doesn’t get its regulatory posture right that it could lose its innovative edge to the UK or any other jurisdiction that wants to be more forward-looking,” he says.

Ultimately, the blockchain is likely to touch every corner of the federal government. In the very near term, the Bitcoin market itself is beginning to take on new and more sophisticated shapes. Former bankers for Goldman Sachs and Morgan Stanley, among others, are developing futures in the currency and other derivatives that could help stabilize its price. When those hit the market, they’ll fall under the jurisdiction of the CFTC.

Blockchain-based “smart contracts,” which will be automatically self-enforcing without the need for court intervention, will pose their own sets of challenges. Already, Evan Greebel, one of the securities lawyers handling the Winklevoss Bitcoin ETF, said he knows of efforts afoot to create smart contracts for car leases that will automatically prevent lessees who default on payments from starting their Internet-connected cars. Surely, the CFPB and Elizabeth Warren will have something to say about that. Greebel says such contracts will have implications for the federal bankruptcy code as well.

He also predicts that import and export registries will soon migrate to the blockchain, a matter for the Federal Trade Commission to oversee. The technology is perfect for keeping track of chains of custody, so say goodbye to your local registry of deeds while you’re at it.

The National Association of Voter Officials is working with a startup called V Initiative that wants to put American elections on the blockchain and let people vote from their personal devices – a transformation that goes to the heart of government. And IBM’s running its Internet of Things initiative on Ethereum, a new blockchain protocol that’s an alternative to the original Bitcoin blockchain.

The blockchain’s radical decentralization raises a host of newer and even stranger possibilities – for instance, markets or gambling networks that exist only as the shared interactions of dozens of users, or millions. It is possible that an illegal activity could arise, even a very large one, with no operator to sue, threaten or shut down.

Because of the immense potential range of applications, the regulatory tone may have to be set by Congress or the White House. Brito of Coin Center points to the 1997 Framework for Global Electronic Commerce, which was created by an interagency task force in the Clinton administration and called for minimal government interference in the Internet, as a model for the blockchain. “You could take it word for word,” he says.

Byrne, who holds a PhD in philosophy from Stanford and made Overstock the first major retailer to accept Bitcoin last year, is ready for this brave new world. And he doesn’t believe the SEC, or anyone else, could really hold it back if it tried. The last time Byrne tangled with the agency – a stranger-than-fiction crusade over the inner workings of the stock market that involved organized crime, hedge fund billionaire Steve Cohen, and a full-page ad in the Wall Street Journal featuring the Overstock CEO holding Star Wars villain Darth Maul’s head in his hands – he prevailed. Now, he says the new regime at the SEC is more reasonable than the old. He’s confident the SEC will approve his stock filing, marking another baby step in what Byrne calls the “crypto-revolution.”

As for the later stages of that revolution, in which the blockchain’s most enthusiastic backers predict it will threaten the livelihoods not just of financial middlemen but many government institutions themselves, Byrne says the world as it is should not be taken for granted. “These central institutions didn’t come out of a burning bush.”

суббота, 23 июня 2018 г.

bitcoin_sec