A recent research paper on SSRN by legal scholars scrutinizes the ethical quandaries and potential conflicts of interest surrounding Sullivan & Cromwell LLP’s involvement in FTX’s Chapter 11 bankruptcy filing. Study Highlights Legal Ethics From FTX Bankruptcy Proceedings The SSRN research paper entitled “Conflicting Public and Private Interests in Chapter 11” meticulously explores the controversial […]
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Bakkt Holdings said in a press release on Feb. 8 that it is “confident” it will continue operating despite expressing concerns earlier over its liquidity in a regulatory filing.
Bakkt wrote that “management remains confident” and intends to continue serving clients and moving toward profitability. The exchange added that its filing with the SEC for the quarter ending September 2023 described various risk factors in part related to its acquisition of Apex Crypto, which concluded in early 2023.
Bakkt said that its Feb. 7 amendment to that filing describes risk factors related to its ability to continue as a going concern for 12 months after the date of the amended form. The company said that its concern analysis can only include management plans that have been implemented or are probable; it must exclude new products and market launches and those without proven revenue.
Bakkt offers business products, including a turnkey crypto trading API, custody services, and crypto reward solutions. Bakkt discontinued an app aimed at retail users in March 2023. Its parent company, ICE, terminated Bakkt Bitcoin futures and options contracts in September 2023.
Despite Bakkt’s assurances to the public, its submission to the SEC explicitly states in bold text:
“We might not be able to continue as a going concern.”
According to the filing, Bakkt said that it is not probable that its revenue will generate sufficient profit and cash flows to continue doing business. It also described “expected operating losses and cash burn for the foreseeable future.”
Another section reads:
” … We have determined that we do not believe that our cash and restricted cash are sufficient to fund our operations for the 12 months following the date of this [filing].”
The firm said it is currently seeking additional capital but noted that various methods of raising capital would not be available or acceptable. One option would be to issue securities, but that would dilute its stock value.
Bakkt said that lack of funding may lead it to reduce expansion efforts, cut operating costs, limit future development, or “even terminate operations.” The firm also expressed uncertainty around the handling of crypto in the event of bankruptcy.
The post Bakkt says it is ‘confident’ about continuing operations after disclosing liquidity issues in SEC filing appeared first on CryptoSlate.
Kseniya Ovchinnikova | Moment | Getty Images
The opening of tax season is approaching — and experts have a few reminders before you file.
The IRS expects to receive more than 128.7 million individual tax returns before the deadline for most filers, which is April 15.
Generally, the best way to avoid a delayed refund is by filing a complete and electronic return and using direct deposit. Last year, the average refund was roughly $3,200.
Here are the key things taxpayers need to know before filing this season.
House lawmakers last week advanced a bipartisan tax package with proposed changes to the child tax credit for 2023. If enacted, the adjustments could provide a bigger tax break to lower-income U.S. families, according to estimates from the Urban-Brookings Tax Policy Center.
Currently, the child tax credit is worth up to $2,000 per qualifying child for 2023, which reduces your taxes on a dollar-for-dollar basis. For 2023, $1,600 of the credit is refundable, meaning you can still get at least $1,600 without taxes owed.
“There are 19 million children who do not get the full child tax credit because their parents’ income is too low,” said Chuck Marr, vice president for federal tax policy for the Center on Budget and Policy Priorities.
There are 19 million children who do not get the full child tax credit because their parents’ income is too low.
Chuck Marr
Vice president for federal tax policy for the Center on Budget and Policy Priorities
The proposed changes would increase the refundable portion of the credit to $1,800 for 2023 and make the formula more generous for families with multiple children.
However, negotiations for the bipartisan tax plan are ongoing. If enacted, the child tax credit changes could happen after the tax season begins Jan. 29.
Experts say eligible families shouldn’t rush to file before possible legislation changes. If you claim the refundable part of the child tax credit, you may not get a refund earlier than Feb. 27, according to the IRS.
If you received business income via payment apps such as Venmo and PayPal, or from e-commerce companies such as eBay, Etsy or Poshmark, you’re less likely to get a tax form for 2023 — thanks to an IRS change in November.
For 2023, you can expect payment apps to send Form 1099-K if you had more than 200 transactions worth an aggregate over $20,000. But the IRS will phase in a $5,000 limit for 2024.
Don’t lean towards that inclination to cheat if you didn’t get a 1099-K.
Bill Smith
National director of tax technical services at CBIZ MHM
Regardless of whether you receive Form 1099-K for 2023, you still must report business income, according to Bill Smith, national director of tax technical services at financial services firm CBIZ MHM.
“Don’t lean towards that inclination to cheat if you didn’t get a 1099-K,” he said.
There are several options for filing your federal taxes for free this season, including a limited Direct File pilot through the IRS.
While there’s not an official launch date for Direct File, the agency aims to have the pilot widely available to certain taxpayers by mid-March, according to IRS officials.
Eligible states include Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington and Wyoming.
“The 2024 pilot is an opportunity for the IRS to learn how best to deploy Direct File to meet the needs of taxpayers and test core improvements to the tax filing experience,” Laurel Blatchford, the U.S. Department of the Treasury’s chief implementation officer for the Inflation Reduction Act said in a statement Thursday.
Other free tax filing options may include:
Key figures at Grayscale, including chairman Barry Silbert and Mark Murphy, president of its parent company Digital Currency Group (DCG), will step down from their board positions effective Jan. 1, 2024, according to a Dec. 26 8-K filing with the United States Securities and Exchange Commission (SEC).
Mark Shifke, DCG’s chief financial officer, will replace Silbert as chairman by Jan. 1, and he will be joined by other board members Matthew Kummell and Edward McGee.
“The [new] Board consists of Mr. Shifke, Mr. Kummell, Michael Sonnenshein, and Mr. McGee, who also retain the authority granted to them as officers under the limited liability company agreement of the Sponsor,” Grayscale wrote in the filing.
The SEC filing did not indicate why the firm had decided to make these changes.
Grayscale is one of the world’s largest crypto-focused asset management firms, with the value of assets under its management exceeding $34 billion.
Grayscale is known for its Bitcoin Trust (GBTC), which it is currently applying to convert into a spot exchange-traded fund (ETF). The firm scored a pivotal victory against the US SEC in August when the court ruled that the financial regulator acted “arbitrarily and capriciously” in rejecting its previous attempt to convert its trust into an ETF.
Meanwhile, the investment company is the second-largest BTC entity globally, with nearly 620,000 units of the top cryptocurrency valued at more than $27 billion.
However, its Bitcoin Trust currently trades at a 5.63% discount to the underlying asset, according to Coinglass data.
The post Grayscale filing reveals board reshuffle as Barry Silbert exits appeared first on CryptoSlate.
BlackRock has taken the initial step toward filing for a spot Ether ETF, with the iShares Ethereum Trust recently registered in Delaware.
This move is reminiscent of BlackRock’s iShares Bitcoin Trust, which was registered in a similar fashion seven days before the ETF application was filed with the U.S. Securities and Exchange Commission (SEC).
In the context of an industry bristling with anticipation for the approval of a spot Bitcoin ETF, BlackRock’s move potentially signals a pivotal moment for Ethereum, shedding light on its status as a prospective asset class in institutional investment portfolios.
Despite the positive indications, it’s important to recall the precedent set by the SEC’s handling of Bitcoin ETFs. As reported by CryptoSlate in October 2023 Source, despite rumors indicating otherwise, the SEC had not approved the iShares Bitcoin ETF. The regulator had delayed its verdict on several proposed rule changes, which included applications from leading firms such as Fidelity (Wise Origin), VanEck, WisdomTree, and Invesco.
In light of this, BlackRock’s iShares Ethereum Trust registration, while a significant development, leads us into a territory of considerable uncertainty. The SEC’s previous hesitance to approve Bitcoin ETFs might cast a long shadow over BlackRock’s budding Ethereum trust, potentially heralding a new cycle of applications, approvals, delays, and rejections.
As the crypto community watches these developments with bated breath, two things have been game-changers for the industry: Grayscale’s court victory and BlackRock’s entry into the market. Ethereum ETFs, in this context, may just be the next frontier. However, for now, all eyes are trained on the SEC as the crypto industry awaits its verdict on the pending rule changes and the potential approval of BlackRock’s iShares Ethereum Trust.
BlackRock’s Ethereum Trust filing surfaces as another key narrative to monitor closely. As the crypto industry continues to evolve and mature, such developments underscore the increasing intersectionality of traditional finance and digital asset markets, hinting at a prospective future where digital currencies like Ethereum may become more commonplace in institutional investment portfolios.
Initially submitted on October 2, 2023, the proposal aims to convert the Grayscale Ethereum Trust, the largest Ethereum investment vehicle globally, into an ETF.
In a recent turn of events, the US Securities and Exchange Commission (SEC) has approved Grayscale Investments’ application for a spot Ethereum (ETH) exchange-traded fund (ETF). Sharing the news on Tuesday, Nate Geraci, President of The ETF Store, announced on X (formerly Twitter) that the SEC has officially acknowledged the filing for the potential conversion of the Grayscale Ethereum Trust (ETHE) into an ETF.
SEC has acknowledged Grayscale’s spot ether ETF filing…
This would be conversion of $ETHE into ETF. pic.twitter.com/JMmutgbakZ
— Nate Geraci (@NateGeraci) October 23, 2023
Initially submitted on October 2, 2023, in collaboration with NYSE Arca, the proposal aims to convert the Grayscale Ethereum Trust, the largest Ethereum investment vehicle globally, into an ETF.
Presently, the trust holds an impressive 2.5% of the circulating ETH and manages assets worth $5 billion. According to a press release, the transition to an ETF has long been anticipated as the final phase of the trust’s lifecycle.
Like its Bitcoin (BTC) counterpart, the Grayscale Ethereum Trust operates by holding the underlying asset, enabling investors to purchase shares representing a fraction of the total holding. However, the transformation of ETHE into an ETF would allow investors to trade it on the stock exchange, backed by physical Ethereum, thereby broadening its accessibility and appeal to potential investors.
Grayscale’s move aligns with the market trend, where several firms have filed for Ethereum ETFs based on futures contracts rather than physical ETH. These contracts involve agreements to buy or sell financial assets at predetermined prices at future dates, providing a speculative avenue for investors to wager on the asset’s price trajectory.
The new development comes in the wake of the SEC facing pressure from various financial firms, including BlackRock and Fidelity, to approve spot Bitcoin and Ethereum ETFs, aiming to streamline the integration of cryptocurrencies into traditional financial systems.
In the United States, a court has also mandated that the regulator review Grayscale’s filing to convert its Bitcoin Trust into a Listed BTC ETF. The new order from the United States Court of Appeals for the District of Columbia follows an initial court ruling on August 29, asking the SEC to approve Grayscale’s application or file an appeal before October 13.
However, the SEC failed to present an appeal for the ruling, and, according to a filing on October 23, the Court of Appeals has issued a formal mandate for the SEC to review its decision on the Grayscale Bitcoin ETF.
Last week, the asset management company submitted a proposal to the SEC to list shares of its Bitcoin Trust on the New York Stock Exchange Arca under the ticker GBTC.
While the SEC is yet to approve any of the Bitcoin spot ETFs filed under its jurisdiction, Grayscale’s Chief Legal Officer Craig Salm urged the securities watchdog in July to greenlight all the eight Bitcoin ETFs applications fairly and systematically without choosing the winners and losers.
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Chimamanda is a crypto enthusiast and experienced writer focusing on the dynamic world of cryptocurrencies. She joined the industry in 2019 and has since developed an interest in the emerging economy. She combines her passion for blockchain technology with her love for travel and food, bringing a fresh and engaging perspective to her work.
The United States Securities and Exchange Commission (SEC) has accused Binance.US of non-cooperation in the ongoing investigation against the crypto exchange, according to a court filing dated Sept. 14.
The SEC in its court filing noted that Binance.US’s holding company called BAM has produced only 220 documents during the discovery process. Many of the submitted documents under the Consent Order “consist of unintelligible screenshots and documents without dates or signatures.”
SEC added that BAM has refused to produce essential witnesses for deposition, instead agreeing only to four depositions of witnesses it has unilaterally deemed appropriate and said:
“It has responded to requests for relevant communications with blanket objections and has refused to produce documents kept in the ordinary course of its business, claiming those documents do not exist, only for the SEC to later receive such documents from other sources.”
The SEC also raised concerns over Binance.US’s use of Ceffu, wallet custody software provided by the global entity Binance Holdings Ltd. The SEC noted that BAM made inconsistent statements about Ceffu’s and Binance’s involvement in the wallet and customer funds management.
SEC said that BAM first claimed Ceffu was BAM’s wallet custody software and services provider but later stated that Binance was BAM’s wallet custody software provider. The regulators raised concern that the crypto exchange’s usage of Ceffu violates a prior agreement meant to prevent funds from being diverted abroad.
Related: Binance plans new round of layoffs amid increased regulatory scrutiny
The SEC filed a lawsuit against Binance on June 5, pressing 13 charges against the crypto exchange including unregistered securities offerings, the Simple Earn and BNB Vault products, and its staking program. The SEC claimed that Binance.com, Binance.US, and BAM Trading should have registered as clearing agencies, broker-dealers, and exchanges, respectively. The unregistered offer and sale of Binance.US’ staking-as-a-service programme required BAM Trading to register as a broker-dealer as well.
The latest accusations by the SEC against Binance.US come amid an internal crisis at the exchange. The Binance.US CEO Brian Shorder joined the long list of top Binance executives leaving the firm this year followed by the resignation of the head of legal and the exchange’s chief risk officer within days.
Binance.US didn’t immediately respond to requests for comments.
Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.
Magazine: US and China try to crush Binance, SBF’s $40M bribe claim: Asia Express
In a filing dated August 4, Valkyrie applied to add an Ethereum futures ETF to its Bitcoin Strategy ETF (BTF). However, it would seem this move was pushed back by the SEC as the asset manager has now filed a separate application to offer an Ether futures ETF.
In an application dated August 16, Valkyrie seeks the United States Securities and Exchange Commission’s (SEC) approval to offer an Ethereum futures exchange-traded fund (ETF).
If approved, the fund will not directly invest in Ether. Instead, it will focus on purchasing several ether futures contracts to match the total value of the ether underlying the futures contracts with the net assets of the fund.
While this fund is relatively similar to the Bitcoin futures ETF, which has existed since 2021, it differs from the Spot Bitcoin ETF, which prominent institutional firms have filed for. Spot ETFs track the crypto asset’s price, while futures ETFs focus on the asset’s future contracts.
Valkyrie categorically noted this fact as part of its application and stated that investors looking to invest in the price of ether directly should consider investments other than this particular fund.
The application also highlighted the risks involved in investing in this fund as, according to Valkyrie, “the Fund’s investments could decline rapidly, including to zero.” As such, investors should understand that they could lose their entire investment.
As is common with applications such as this, applicants must prove to the SEC that the underlying asset has a regulated market of significant size. And Valkyrie’s filing stated that its fund would be guided by the futures contracts traded on the Chicago Mercantile Exchange (CME).
ETH price recovers to $1,685 | Source: ETHUSD on TradingView.com
Valkyrie failed to clarify the status of its initial filing in its most recent application. The asset manager had previously tried to add ETH futures contracts to its Valkyrie Bitcoin Strategy ETF (BTF) in a bid to gain a first-mover advantage over other applicants.
Several other asset managers, including Bitwise, ProShares, Grayscale, and Volatility Shares, have also applied to offer an Ethereum futures ETF. However, it remains uncertain in what order the SEC is likely to approve (if it does) these applications, especially with this recent development.
Just like Cathie Wood has suggested regarding the pending Spot Bitcoin ETF applications, the SEC can approve multiple applications at once, which will likely eliminate the first mover advantage, or it can decide to approve them in the order in which these applications came in.
Despite expectations that the regulator will approve an Ether ETF this year, the probability of the SEC approving any of these applications remains uncertain as optimism dwindles.
Featured image from iStock, chart from TradingView.com
The most recent filing involving asset manager BlackRock’s attempt to launch a spot Bitcoin exchange-traded fund (ETF) included a “surveillance-sharing agreement” with cryptocurrency exchange Coinbase.
According to a June 29 filing with the United States Securities and Exchange Commission (SEC), the Nasdaq stock exchange refiled for a proposed rule change allowing the listing of BlackRock’s Bitcoin (BTC) ETF. The filing included details of a June 8 agreement between the Nasdaq and Coinbase “intended to supplement the exchange’s market surveillance program” and provide access to data on spot BTC trades.
JUST IN: BlackRock has re-filed for spot bitcoin ETF, the resubmission was dated 6/29, Nasdaq just posted tho. They just added Coinbase like everyone else. pic.twitter.com/UGq46DdLgu
— Eric Balchunas (@EricBalchunas) July 3, 2023
The release of the SEC filing followed ARK Investment Management amending its spot BTC ETF application to include a surveillance-sharing agreement with the Chicago Board Options Exchange (Cboe) and an unnamed U.S.-based crypto exchange. Some speculated at the time the agreement was with Coinbase, which would seemingly put it in conflict with BlackRock’s ETF application.
Related: Will BlackRock’s ETF slingshot Bitcoin’s price skyward?
The SEC reportedly said on June 30 that crypto ETF filings with the Nasdaq and the Cboe were not “sufficiently clear and comprehensive,” suggesting that the applicants include additional information on surveillance arrangements. BlackRock first applied for the spot BTC ETF on June 15.
At the time of publication, the U.S. securities regulator had not approved any spot ETF linked to crypto investments despite numerous applications from market participants. Following the denial of its spot Bitcoin ETF in June 2022, Grayscale Investments filed a lawsuit against the SEC, alleging the regulator had failed “to apply consistent treatment to similar investment vehicles.”
Magazine: SEC calls ETF filings inadequate, Binance loses euro partner and other news: Hodler’s Digest, June 25 – July 1
A survey of professional investors conducted by Nomura-backed “digital asset business” Laser Digital found 96% are “keen to invest in crypto.”
Nomura is an investment bank and brokerage headquartered in Tokyo that spans 30 countries and holds ¥67.3 trillion ($475.4 billion) in assets under management.
The survey comprised 303 professional investors managing a collective $4.95 trillion in assets between them.
In addition to the high percentage of professional investors “keen to invest in crypto,” the survey also showed 82% had a positive outlook on Bitcoin and Ethereum, and 88% said they or their clients were considering investing in cryptocurrencies.
Commenting on the results, Laser Digital chief executive Jez Mohideen said:
“Our comprehensive study reveals that the majority of institutional investors surveyed saw a clear role for digital assets in the investment management landscape, and the benefits they can bring, such as greater diversification of portfolios.”
Between June 5 and 6, the U.S. Securities Exchange Commission (SEC) stepped up its campaign of digital asset enforcement by suing Binance and Coinbase over allegations of violating securities laws.
The SEC’s actions triggered market panic leading to a $133 billion sell-off, with the total crypto market cap finding a local bottom at $1.01 trillion on June 15.
On June 15, asset manager BlackRock filed for a spot Bitcoin ETF against the wave of bearish crypto sentiment and hostile regulatory enforcement actions.
The chief executive of Bitcoin rewards app Lolli, Alex Adelman, said the BlackRock ETF application had reinvigorated institutional interest in Bitcoin. He expects “a new wave of institutional bitcoin-related financial products” from Wall Street to follow.
“As the world’s largest asset manager, BlackRock’s initiative to file a bitcoin ETF shows that there is increasingly strong demand for exposure to bitcoin among its clients, which include some of the biggest institutions in the world.”
The BlackRock ETF filing has sown division on numerous fronts, including whether the deeper institutional involvement is a net positive for the Bitcoin community. Regarding the application winning SEC approval, some point to BlackRock’s near-perfect track record on the matter.
However, litigator Joe Carlasare said he would be “shocked” if the application were approved as the proposed structure is “functionally identical” to past applications from other asset managers, which have all been denied.
Carlasare added that the path to the first spot Bitcoin ETF likely lies in accepting Grayscale’s application to transition its GBTC trust product into one.
The post BlackRock Bitcoin ETF filing triggers wave of institutional interest appeared first on CryptoSlate.
