SEC

Bitcoin Miner Stronghold Files For Nasdaq IPO

27/07/2021 by Idelto Editor

Stronghold, a bitcoin mining company powered by waste coal, has filed an S-1 form with the SEC for a $100 million IPO on the Nasdaq.

Bitcoin mining company Stronghold Digital Mining has filed with the U.S. Securities and Exchange Commission (SEC) for a proposed $100 million initial public offering (IPO). The firm plans to list its Class A common stock on the Nasdaq Global Market under the ticker SDIG.

Stronghold is a vertically integrated bitcoin mining company that operates a wholly-owned, low-cost power regeneration facility in Pennsylvania. The company’s business model is focused on converting coal waste directly into value through bitcoin mining.

When rain or snow meets sulfur-rich waste coal dumps, the largest water polluter in Pennsylvania is formed – waste coal acid mine drainage (AMD). The AMD then runs off and contaminates nearby streams and rivers, threatening aquatic life as a result.

By converting the waste coal into power to mine bitcoin, Stronghold has sought to restore the usability of geographical areas that AMD had previously damaged. In June, Stronghold raised $105 million in two private placements of equity securities and claimed to eliminate around 200 tons of waste coal for each bitcoin mined.

Stronghold currently operates around 1,800 bitcoin mining rigs with a total hash rate capacity of 85 petahashes per second (PH/s). And the firm entered into three definitive agreements with multiple suppliers to purchase over 27,300 additional miners, of which the vast majority is scheduled to be delivered in 2021, the filing said.

The bitcoin mining company shared that it intends to use part of the IPO proceeds to purchase additional miners while it seeks to increase its hash rate capacity significantly. Stronghold also said that the firm would sell bitcoin for fiat currency “from time to time” to cover operating costs based on their internal cash management policy.

Global X, Subsidiary Of $560 Billion Investment Manager, Files For Bitcoin ETF

22/07/2021 by Idelto Editor

ETF provider and Mirae Asset subsidiary Global X has filed for a bitcoin ETF with the SEC, heating up the competitive race in the U.S.

New York-based exchange-traded fund (ETF) provider, Global X, has joined the ever-growing list of bitcoin ETF prospects with a new filing with the U.S. Securities and Exchange Commission (SEC). Global X has $35 billion of assets under management and is a subsidiary of the $560 billion investment manager Mirae Asset.

If approved, the Global X Bitcoin Trust will issue common shares for trade on the Cboe BZX Exchange under a ticker symbol to be announced right before it starts trading. The ETF will hold bitcoin to achieve its investment objective of being a proxy for the BTC price in dollars, minus operating expenses.

According to the filing, Global X Digital Assets, which is affiliated with both Global X Management Company and Mirae Asset Global Investments, will be the sponsor of the offering –– responsible for creating, registering, and listing the ETF and its shares. However, the document did not specify which companies will be the trustee and the bitcoin custodian for the trust.

Like Grayscale’s recently announced strategy for their bitcoin product, GBTC, the Bank of New York Mellon (BNY Mellon) would also aid Global X in administering its ETF. BNY will provide Global X with accounting, tax, and financial reporting for the maintenance and operations of the trust.

Besides Global X and Grayscale, several other investment managers have also filed for a bitcoin ETF in the U.S. lately, heating up the race. This year alone, Valkyrie, NYDIG, VanEck, SkyBridge Capital, and Fidelity have all filed for their own bitcoin ETF offerings. But even though the SEC has delayed every single one of them, the outlook has arguably been improving.

A recent report has pointed out why the regulating agency might capitulate soon, citing the distinct huge onramp of institutional bitcoin adoption this year. And at the beginning of July, former Commodities and Futures Trade Commission chair Timothy Massad explained how a bitcoin ETF could benefit investors and regulators alike.

An ETF offering for a product cuts down intrinsic hardships in investing in the asset directly by abstracting it away through a convenient investment vehicle in an established stock exchange. Naturally, however, investing in an ETF does not mean the investor possesses the underlying asset –– whichever one it might be. And in the case of Bitcoin, that distinction is perhaps more important, as self-custody is essential for true individual sovereignty.

US Treasury Secretary Yellen Outlines Plans to Regulate Stablecoins in Collaboration With the Fed, SEC, CFTC

17/07/2021 by Idelto Editor

U.S. Treasury Secretary Janet Yellen will convene a meeting with the Biden administration’s working group on financial markets to discuss stablecoin regulation. “In light of the rapid growth in digital assets, it is important for the agencies to collaborate on the regulation of this sector and the development of any recommendations for new authorities,” said Yellen.

US Government Discussing Stablecoin Regulation

U.S. Treasury Secretary Janet Yellen announced Friday her plans to discuss the regulation of stablecoins. She will convene a meeting on July 19 of the President’s Working Group on Financial Markets (PWG) to discuss the matter. The meeting will also be attended by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC).

Yellen explained, “Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks they could pose to users, markets, or the financial system.” The treasury secretary detailed:

In light of the rapid growth in digital assets, it is important for the agencies to collaborate on the regulation of this sector and the development of any recommendations for new authorities.

According to the announcement, “The PWG was established to enhance the integrity, efficiency, orderliness, and competitiveness of U.S. financial markets.”

Yellen is a member of the PWG, along with the chairman of the Board of Governors of the Federal Reserve System, the chairman of the Securities and Exchange Commission (SEC), and the acting chairman of the Commodity Futures Trading Commission (CFTC).

The discussion will build on the PWG’s “Statement on Key Regulatory and Supervisory Issues Relevant to Certain Stablecoins,” published in December 2020.

Among other things, the document explains that “Depending on its design and other factors, a stablecoin may constitute a security, commodity, or derivative subject to the U.S. federal securities, commodity, and/or derivatives laws.” It further stresses, “Stablecoin participants and arrangements must meet all applicable anti-money laundering and countering the financing of terrorism (AML/CFT) and sanctions obligations before bringing products to market.”

The Treasury’s announcement adds:

The PWG will examine the current regulation of stablecoins, identify risks, and develop recommendations for addressing those risks. The PWG expects to issue written recommendations in the coming months.

What do you think about the comments by Treasury Secretary Janet Yellen? Let us know in the comments section below.

SEC Charges Token Listing Website With Unlawfully Touting Crypto Securities

15/07/2021 by Idelto Editor

The U.S. Securities and Exchange Commission (SEC) has charged a token listing website with unlawfully touting crypto securities. The site did not disclose that it was paid by the token issuers to profile their coin offerings.

SEC Charges Website Touting Security Tokens Without Clarifying Which Tokens Are Securities

The U.S. SEC announced Wednesday that a token listing website has been “charged with unlawfully touting digital asset securities.” The commission also stated that it has already settled charges against the operator of the website.

Coinschedule.com was a popular website that “profiled offerings of digital asset securities,” the SEC described, adding that its operator was a company based in the U.K. called Blotics Ltd. The regulator explained that the website was accessible in the U.S. from 2016 to August 2019, during which time U.S. visitors comprised a significant portion of its web traffic.

The website offered details of each initial coin offerings (ICOs) profiled, including links to the token issuers’ websites and a “trust score.” The platform claimed that this score “reflected its evaluation of the ‘credibility’ and ‘operational risk’ for each digital token offering based on a ‘proprietary algorithm.’” However, the commission alleged:

In reality, the token issuers paid Coinschedule to profile their token offerings on Coinschedule.com, a fact that Coinschedule failed to disclose to visitors.

The SEC claims that the British company “violated the anti-touting provisions of the federal securities laws by failing to disclose the compensation it received from issuers of the digital asset securities it profiled.”

Kristina Littman, chief of the SEC Enforcement Division’s Cyber Unit, explained that “Coinschedule presented potential investors with seemingly independent profiles about token offerings when in fact they were bought and paid for by token issuers.” She emphasized, “The securities law prohibiting touting securities for compensation without appropriate disclosures to investors is clear and longstanding.”

The commission detailed: “Without admitting or denying the SEC’s findings, Blotics has agreed to cease and desist from committing or causing any future violations of the anti-touting provisions of the federal securities laws, and to pay $43,000 in disgorgement, plus prejudgment interest, and a penalty of $154,434.”

Following the settlement, two commissioners at the SEC issued a joint statement regarding the case. Commissioner Hester Peirce and Commissioner Elad Roisman stated:

We agree with our colleagues that touting securities without disclosing the fact that you are getting paid, and how much, violates Section 17(b). We nevertheless are disappointed that the commission’s settlement with Coinschedule did not explain which digital assets touted by Coinschedule were securities.

What do you think about the SEC’s action? Let us know in the comments section below.

Grayscale Investments’ Diversified Cryptocurrency Fund Now an SEC Reporting Company

13/07/2021 by Idelto Editor

Grayscale Investments now has three SEC reporting funds, with the newest addition being the Digital Large Cap Fund. The company has also filed to make three other funds SEC reporting companies.

Grayscale Investments, the world’s largest crypto asset manager, made two announcements Monday.
The first was that the registration statement on Form 10 filed with the U.S. Securities and Exchange Commission (SEC) for the Digital Large Cap Fund (OTCQX: GDLC) has become effective. The fund is, therefore, an SEC reporting company, the company confirmed, elaborating:

The fund is Grayscale’s first diversified digital currency investment fund to become an SEC reporting company with its shares registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended.

Grayscale Digital Large Cap Fund will now file its reports and financial statements with the SEC, along with current reports, in addition to complying with all other obligations under the Securities Exchange Act.

The Digital Large Cap Fund’s components as of the end of the day on July 9 comprised 67.49% bitcoin (BTC), 25.35% ethereum (ETH), 4.30% cardano (ADA), 1.03% bitcoin cash (BCH), 0.96% litecoin (LTC), and 0.87% chainlink (LINK).
The second announcement on Monday was that Grayscale has filed registration statements on From 10 to make three other crypto investment products SEC reporting companies. They are Bitcoin Cash Trust, Ethereum Classic Trust, and Litecoin Trust.
Besides the Digital Large Cap Fund, Grayscale has two other SEC reporting products: Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE).

What do you think about Grayscale filing to make its funds SEC reporting companies? Let us know in the comments section below.