Cryptocurrency News Now!: Breaking Down the Winklevoss Bitcoin ETF Petition Rejected by SEC

Friday, July 27, 2018

Breaking Down the Winklevoss Bitcoin ETF Petition Rejected by SEC

QUOTE OF THE DAY

“It is never too late to be what you might have been.”

- George Eliot

Happy Friday! So...Facebook lost over $150 billion in shareholder value at stock market open yesterday. To put that into perspective, Bitcoin's market cap is less than $150 billion. I think it's safe to say there's room for growth in the space.

Cheers,
Blockchain Brew Team

MARKETS

COIN	PRICE	24H

BTC	$7,884.24	-4.06%

ETH	$460.876	-3.39%

XRP	$0.448752	-2.67%

BCH	$794.367	-5.03%

EOS	$8.12325	-5.64%

*Information as of 9:30 AM EST

REGULATION

Breaking Down the Winklevoss Bitcoin ETF Petition Rejected by SEC

PAST EVENTS

In 2016, the Winklevoss brothers, founders of the Gemini exchange, applied to list the first Bitcoin exchange-traded fund (ETF)
In February 2017, the proposal was shot down by the U.S. Securities and Exchange Commission (SEC)

In 2017, the SEC commented on the decision to shoot down the Winklevoss Bitcoin ETF:

"When the spot market is unregulated--there must be significant, regulated derivatives markets related to the underlying asset with which the Exchange can enter into a surveillance-sharing agreement."

YESTERDAY'S EVENTS

Shortly after the Winklevoss brothers received disapproval in 2017, they filed for a "timely petition" for an additional review and decision
Now, after the SEC has reviewed the Winklevoss Bitcoin ETF proposal for a second time, it got denied again
In a release, the SEC cited that a large reason for disapproval this time is that the Winklevoss Bitcoin ETF would be vulnerable to manipulation due to low-liquidity concerns

The SEC did clarified that the Winklevoss Bitcoin ETF does not meet the exchange requirements to proceed with listing at this time:

"Although BZX argues that its proposal can satisfy these requirements because bitcoin markets are inherently difficult to manipulate...and because alternative means of identifying fraud and manipulation would be sufficient...the Commission concludes that, as discussed above...BZX has not established that these proffered means of compliance—alone or in combination—are sufficient to meet the requirements of Exchange Act Section"

LOOKING FORWARD

Right after the news broke, the markets reacted with swift selling bringing Bitcoin's price back under the $8,000 mark in less than an hour
Though this SEC decision is certainly not a win for crypto, it also is certainly not an end all be all situation
There are still a handful of applicants who applied to list a Bitcoin ETF and the SEC still has many more decisions to make
One notable decision to watch for is for the co-applicants CBOE, VanEck and SolidX

NEWS

CME CEO Says Altcoin Futures Won't Be Introduced Anytime Soon

CME BITCOIN FUTURES

The Chicago Mercantile Exchange (CME) is a leading exchange that offers Bitcoin futures
Yesterday, in an interview with Bloomberg, CEO Terry Duffy opened up and shared that Bitcoin futures "might have been the most controversial launch of a product"
Last week, CME released a report that showed the average daily volume of Bitcoin futures increased by over 93% from the first quarter of 2018

NO ALTCOINS

Now that Bitcoin futures trading is beginning to show signs of adoption with volume increasing, Bloomberg probed Duffy for answers regarding launching altcoin futures
To this, Duffy responded that altcoins are "highly volatile and new" and that CME cannot just list products to "see where they're going to go"
For now, it seems Duffy wants to see how Bitcoin futures play out first

CBOE WATCHING CAREFULLY

The Chicago Board Options Exchange (CBOE), a rival of CME, has been allegedly watching the markets carefully to see if launching other cryptocurrency derivatives would be a good fit
In a recent interview with CoinTelegraph, CBOE's director of product development, Dennis O'Callahan, implied that the infrastructure and cryptocurrencies need to align for another product besides Bitcoin to be launched

NEWS

Uber Co-Founder Launches Crypto Exchange

VOYAGER

Oscar Salazar, one of Uber's co-founders and former chief technology officer, has linked up with former E*Trade executive, Stephen Ehrlich, to build a new cryptocurrency exchange dubbed Voyager
Ehrilch will act as Voyager's CEO while Salazar will oversee development of the routing engine and be the lead tech advisor
Voyager plans on competing with the top cryptocurrency exchanges by offering no commission fees on trading, rather profiting off of a spread between the quoted price and actual price, similar to how Robinhood operates

Stephen Ehrlich said in an interview with Fortune:

“We saw an opportunity to build a dynamic smart order router that can take advantage of the marketplace and also offer customers no commissions. Sometimes you go to trade on a certain exchange, but there’s no liquidity there.”

WHEN IS LAUNCH?

Voyager recently entered beta and plans on launching the finalized platform in October of this year
Currently, Voyager has approval for operations in five states and is pursuing the applications in the other forty-five
At launch, Voyager plans on supporting fifteen coins, trying to differentiate themselves from Coinbase who offers four and Robinhood that offers five

Ehrlich is not afraid of the competition in the cryptocurrency industry:

“We don’t think crypto has been adopted yet by the masses in the United States. I believe the market space itself is extremely large…We think the opportunity for both retail and institutional is vast, and we want to be part of that, and help the industry grow, and be good citizens to the industry, and help people get more knowledgeable in crypto assets.”

REGULATION

Swiss Regulators Investigating $100 Million ICO

INVESTIGATION

On Thursday, the Swiss Financial Market Supervisory Authority revealed that is has opened an investigation into Envion AG
The regulator believes that Envion's initial coin offering may have broken financial market rules by accepting public deposits in exchange for its EVN token

FINMA stated in its press release on the issue:

"Investigations carried out by FINMA to date indicate that, in the context of its ICO, envion AG accepted funds amounting to approximately one hundred million francs from more than 30,000 investors in return for issuing EVN tokens in a bond-like form."

ENVION

Envion is a decentralized, global mining infrastructure that raised $100 million during its initial coin offering earlier this year
The $100 million fundraiser ranks Envion as the 6th largest ICO of all time
This new accusation is just another part of the drama that has surrounded the startup recently
Envion executives have been in a dispute accusing one another of creating and pilfering extra EVN tokens

Sentinel Protocol (UPP)
Sentinel Protocol is building a crowdsourced threat intelligence database on the blockchain by leveraging its consensus and incentive system. The Sentinels are a group of security experts and organizations including ethical hackers who are rewarded for their security contributions.
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