Updated Crypocurrency Regulations May Help Recent Bitcoin ETF Application Pass

  • CBOE Global Markets recently filed an application for a Bitcoin ETF, and it now seems likely that this request will be approved because decentralized cryptocurrencies aren’t securities.
  • CBOE’s Bitcoin ETF is the most recent application, and before it, a similar Bitcoin ETF application by the Winklevoss twins was rejected because the regulator determined that crypto markets were mostly “unregulated.”

CBOE Global Markets recently filed another application for a Bitcoin ETF. This was sent after several similar requests by other firms were denied, due mainly to regulatory concerns related to cryptocurrency markets.

CBOE’s application comes after the US Securities and Exchange Commission (SEC) announced that Bitcoin (BTC) and Ethereum (ETH) will not be classified as securities. This means it may have a better chance of being approved, thus potentially drawing more institutional investors to the digital currency ecosystem.

CBOE Global Markets launched Bitcoin futures contracts in the United States on December 10, 2017. Its current Bitcoin ETF application was posted online by the SEC, and the federal regulator asked traders and investors to provide feedback regarding CBOE’s request.

Reportedly, the proposed ETF will limit trading to SolidX Bitcoin Shares, with one share’s value being 25 Bitcoins. Should the application be approved, trading is scheduled to start by Q1 2019.

Past Attempts

In the past, the SEC has rejected several Bitcoin ETF applications, one of them from the Winklevoss twins, whose exchange recently hired a former NYSE CIO, in March, 2017. Lack of adequate regulations was the main reason cited by the American regulator for rejecting it.

Last year, the SEC issued a statement that read:

[The] significant markets for Bitcoin are unregulated. Therefore … the Commission does not find the proposed rule change to be consistent with the Exchange Act.

SEC

Despite the SEC’s active involvement in monitoring and regulating cryptocurrency markets, there still seems to be a lack of clarity among US citizens as to exactly how crypto assets are regulated and which government bodies are responsible for regulating them.

While decentralized cryptocurrencies are likely not securities, there’s still confusion surrounding initial coin offerings (ICOs). Whether or not regulators see ICOs as securities is unclear, although previous announcements pointed in that direction.


 

U.S. Government Intervenes in CFTC Case Against Alleged Crypto Fraudster

Michael LaVere
  • The US government has filed to intervene in a lawsuit by the CFTC against Jon Barry Thompson. 
  • Thompson has been charged with commodities fraud and wire fraud, dating back to an alleged 2018 crypto scam involving $7 million.

The U.S. government intends to intervene in a lawsuit by the Commodity Futures Trading Commission (CFTC) against alleged crypto fraudster Jon Barry Thompson. 

According to a report by Finance Magnates, the intervention was made public on Nov. 19, following the government’s filing of a set of documents with the New York Southern District court. Thompson, who has been accused of operating a bitcoin scam and charged with commodities and wire fraud, is in the midst of a lawsuit by the CFTC.

According to the filing, the government’s intervention into the CFTC lawsuit is to prevent interference with a parallel case involving Thompson, United States v. Jon Barry Thompson, 19 Cr. 698. 

The filing states, 

If this case were to proceed, there would be a risk of significant interference with the Criminal Case.

It continues, 

A complete stay would prejudice no party to this civil action; would prevent the circumvention of important statutory limitations on criminal discovery and avoid asymmetrical discovery, and would preserve the Court’s resources because many of the issues presented by the civil action will be resolved in the Criminal Case.

In 2018, Thompson allegedly induced two victims to send “roughly $7 million” to fund the false purchase of bitcoin through his companies Volantis Escrow Platform LLC and Volantis Market Making LLC. 

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