Crypto News Headlines (27-Jan-2023)

Crypto asset manager Bitwise Asset Management published a report titled “Bitwise/Vettafi 2023 Benchmark Survey of Financial Advisor Attitudes Toward Crypto Assets” on Tuesday. This is Bitwise’s fifth annual study conducted in collaboration with Vettafi, an exchange-traded fund (ETF) platform.

The survey was conducted between Nov. 25, 2022, and Jan. 6, 2023, with the participation of 491 financial advisors, including independent registered investment advisors, broker-dealer representatives, financial planners, and wirehouse representatives from across the U.S. According to the survey findings:

Despite the sharp market correction of 2022, financial advisors remain highly engaged in crypto markets, with 15% allocating in client accounts and 90% receiving inbound questions from clients about the space.

Another day, another refusal by the Securities and Exchange Commission (SEC) to allow a Bitcoin spot ETF to launch in the United States. 

The latest rejected proposal came from Cathie Wood’s ARK Invest and global crypto ETF provider 21Shares, which for a second time joined forces in an attempt to launch the ARK 21Shares Bitcoin ETF. It was initially filed last year on May 13, a month after Ark’s first attempt to list the product on BZX was turned down. 

An ETF—short for “exchange-traded fund”—is an investment vehicle offering indirect exposure to an underlying asset. This can be useful for investing in items that are difficult to own and store by oneself, such as gold, or for many, cryptocurrency.

Shares in the troubled Grayscale Bitcoin Trust (GBTC) surged on Monday, narrowing its The U.K.’s financial watchdog published advice for crypto companies after just 14% of the firms looking to win regulatory approval in the country passed muster.

The extensive list of tips covers what applicants need to consider before, during and after submitting their applications for registration to the Financial Conduct Authority (FCA).

In the post, the regulator said only 41 of the 300 crypto companies applying for registration since it opened its registration regime two years ago managed to win full approval. Of the applications considered, 195 companies were either refused or withdrew their application and 29 were rejected, the regulator said.

“This feedback should help applicants when they prepare their application for registration and help make the process as simple and efficient as possible,” the note said.

The offices of Bithumb were raided on Thursday as part of an investigation into price manipulation of a coin listed on the South Korean crypto exchange, Yonhap reported. The coin involved wasn’t identified.

Prosecutors are investigating transactions related to a specific person or entity moving the price of the coin to make a profit, they said. They plan to examine transaction details at other exchanges where the coin is listed, according to the report.

“This is a search and seizure to secure the transaction details of a specific coin, and it has nothing to do with Bithumb,” an official for Seoul Southern District Prosecutor’s Office said.

The raid took place at a time when Bithumb is also being probed by South Korea’s tax authorities, who are investigating tax evasion via domestic and international transactions on the exchange and its affiliates.

Wendy Rogers, an Arizona state senator in the United States, has launched bills concerning cryptocurrency, including one that aims to make Bitcoin BTC $22,953 legal tender in Arizona. 

In a recent tweet, Rogers cited data from investment firm Goldman Sachs that BTC is the best-performing asset in the world and announced that she launched a set of crypto bills.

One of the proposed bills focuses on making BTC legal tender in the U.S. state. If passed into law, BTC will have the same status as the U.S. dollar, becoming an accepted medium of exchange for debt payment, public charges, taxes and dues in the state.

Once seen as a haven for bitcoin and crypto miners, Paraguay has changed. Paraguayan miners now complain due to the price hikes the government has applied specifically for the industry of cryptocurrency mining. According to reports from Nano Grijalba, business developer of Braiins Mining, this price hike of over 50% is discriminating against bitcoin miners directly using the excuse of the low number of jobs the industry creates.

Grijalba criticized the environmental logic of these measures. On this issue, he stated:

Paraguay’s decision to increase fees for bitcoin mining, a clean industry, while attracting high-emissions industries with low fees, is questionable. We must prioritize support for clean industries for a sustainable future.

Senator Ted Cruz introduced a measure in the Senate Wednesday advocating for crypto payments within areas of the Capitol, a sign of Republicans’ continued focus on rules related to digital assets.

The new directive would apply to officials tasked with overseeing day-to-day operations within the House of Representatives and Senate, encouraging them to work with “persons that will accept digital assets as payment for goods” and food services.

The proposal references areas of the Capitol where digital payments could work, like at gift shops or vending machines. This past November, Cruz pushed for adopting cryptocurrencies such as Bitcoin as a form of payment within Capitol buildings through a similarly worded document.

The world’s largest economy just announced the GDP figures for the latest quarter of 2022, showing moderate but declining growth compared to Q3.

Unlike most previous statements coming from the US, this one brought little-to-no immediate volatility to the crypto market, with BTC still standing above $23,000.

The overall expectations ahead of the Q4 2022 GDP numbers claimed that the economic growth in the country slowed down during the last three months of last year. Q3 saw an increase of 3.2%, while the estimations now suggested 2.6% for Q4.

Despite the Halloween and Christmas Holidays, retail sales had declined, showing reduced confidence among consumers.

However, the actual numbers were slightly higher – at 2.9%, instead of the estimated 2.6%. Thus, growth indeed slowed down in Q4 but not as much as expected.

The jobless claims were lower than the estimated – 186,000 versus 205,000.

United States Securities and Exchange Commission (SEC) is inquiring into registered investment advisers about whether they are following rules around custody of client crypto assets, according to a Reuters report that cites three unnamed sources.

The probe gathered pace in the aftermath of the implosion of crypto exchange FTX, the report said.

The SEC has been warning public companies that if they have a stake in the industry’s recent crypto contagion, they’d better tell investors, as Coindesk previously reported. The SEC asked if companies face any risks to their businesses “due to excessive redemptions, withdrawals or a suspension of redemptions or withdrawals, of crypto assets.”

The latest development is another sign of the market regulator increasing scrutiny at the intersection of traditional finance and crypto. The SEC is seeking details about what firms did to assess custody for platforms, including FTX, since clients’ digital assets are typically stored with a third party.

Despite the plans to turn the region into a bustling crypto hub, the United Kingdom’s financial watchdog says it has given the all-clear to only 41 out of 300 crypto firm applications seeking regulatory approval to date.

The U.K. Financial Conduct Authority (FCA) implemented the new cryptocurrency-focused regulations on Jan. 10, 2020, to supervise businesses operating in the sector and to ensure that they’re subject to the same Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) regulations as firms in traditional financial markets.

A statement from the FCA has revealed that of the 265 applications that were “determined,” a mere 15% of these applications were approved and registered, while 74% of firms either refused or withdrew their application, and 11% were rejected. Another 35 applications are yet to be determined.