SEC calls ETF filings inadequate, Binance loses euro partner and other news: Hodler’s Digest, June 25 – July 1

Top Stories This Week

US SEC deems spot Bitcoin ETFs filings as inadequate

There may be a longer wait for a spot Bitcoin exchange-traded fund (ETF) in the United States, as the Securities and Exchange Commission labeled investment managers’ recent applications inadequate. The SEC told the Nasdaq and the Chicago Board Options Exchange that their filings are not “sufficiently clear and comprehensive.” The regulator returned the filings, citing the lack of information regarding the proposed surveillance-sharing agreement. Asset managers can still resubmit their applications.

Cathie Wood’s ARK reportedly ‘first in line’ for a spot Bitcoin ETF

ARK Investment Management is reportedly ahead of BlackRock in the race for a spot Bitcoin ETF, as it still has a previous application pending with the United States securities regulator. ARK and 21Shares filed their third application for a spot BTC ETF in April, and amended it this week to include a surveillance-sharing agreement, making it similar to BlackRock’s filing. Since BlackRock’s application on June 16, other investment firms such as Valkyrie, WisdomTree and Invesco have reapplied for spot Bitcoin ETFs.

Binance to lose support of its euro banking partner

Crypto exchange Binance informed users that its current euro banking partner, Paysafe Payment Solutions, will no longer support the exchange after September 25. Binance said it will switch to a new service provider for euro deposits and withdrawals via SEPA bank transfer, though it didn’t name which provider that would be. In recent months, Binance has been facing waves of backlash from regulators around the world, leading to a cessation of operations in various countries.

FTX has recovered $7B in assets so far, has almost $2B to go to cover misappropriations

FTX has recovered about $7 billion in liquid assets so far, and the search for additional assets is continuing, according to an interim report released June 26. The extensive commingling of funds complicates their efforts, however. The FTX Debtors, made up of FTX and affiliates, currently estimate the amount of misappropriated customer assets at $8.7 billion. Most of that money, about $6.4 billion, was in fiat and stablecoins. The former FTX leadership “did not commingle and misuse customer deposits by accident,” the report alleged.

3AC liquidators look to recoup $1.3B from founders

Teneo, the liquidator behind bankrupt hedge fund Three Arrows Capital (3AC) is seeking to recover roughly $1.3 billion in funds from its founders Su Zhu and Kyle Davies. The debt reportedly incurred when 3AC was already insolvent, adding to creditors’ losses. The company owed creditors $3.5 billion, making the founders’ potential liability more than a third of the total debt. Davies and Zhu have maintained active social media profiles, but their physical whereabouts are unknown, delaying the liquidation process. Both 3AC founders have received digital subpoenas during the bankruptcy proceedings. To date, they have not cooperated.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $30,418, Ether (ETH) at $1,928 and XRP at $0.47. The total market cap is at $1.19 trillion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Compound (COMP) at 84.33%, Bitcoin Cash (BCH) at 63.16% and eCash (XEC) at 44.59%. 

The top three altcoin losers of the week are Conflux (CFX) at -22.38%, Sui (SUI) at -15.41% and Stacks (STX) at -14.81%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

Most Memorable Quotations

“One of the things that I think people need to stop doing is going, ‘What’s the ultimate blockchain?’ […] It doesn’t exist in my mind because it really depends.”

Mel McCann, vice president of engineering at the Cardano Foundation

“Crypto presents [the SEC] an opportunity to rethink how we approach innovation. […] I really think we’ve been taking an approach that is not appropriate.”

Hester Peirce, commissioner of the U.S. Securities and Exchange Commission

“Many of the largest financial institutions in the US are actively working to provide access to Bitcoin and more.”

Meltem Demirors, chief strategy officer at CoinShares

“I think that our NFTs are a neat way to show that we do have a seat at the table and that we’re really invested in crypto and the investigation of digital assets.”

Andrew Frey, forensic financial analyst in the U.S. Secret Service

“Once in a while, something comes along that makes poor people rich because they got it really, really cheap. This [Bitcoin] was one of them.”

Davinci Jeremie, crypto advocate

“Regulation by enforcement is the equivalent of having a hammer and seeing everything as a nail.”

Simon Callaghan, CEO of Blockchain Australia

Prediction of the Week 

Bitcoin speculators send 35K BTC to exchanges in new ‘elation inflow’

Bitcoin short-term holders (STHs) are feeling the need to sell BTC at $30,000, according to a recent report from analytics firm Glassnode flagging tens of thousands of coins being sent to exchanges.

This indicates that speculative interest in Bitcoin remains fickle and highly sensitive to even smaller price movements.

Historical data has shown that once STH profitability reaches an aggregate 20%, selling begins, and against their current $26,500 breakeven point, anything much above $33,000 could spark a significant shift in hodler composition. Current data shows STH profitability at around 10%, with their realized price — the price at which STH coins last moved — now above $27,000.

FUD of the Week 

FTX has filed a lawsuit against a former regulatory and compliance executive at the exchange, alleging he made a series of payments attempting to prevent staff from blowing the whistle about the exchange’s issues. Daniel Friedberg, who held multiple leadership roles at the exchange, is accused of making “hush money” payments to two potential whistleblowers to stop them from leaking information about “regulatory issues” and the close ties between FTX and Alameda.

Over $204M was lost in Q2 DeFi hacks and scams

Over $204 million was lost in decentralized finance (DeFi) hacks and scams in the second quarter of 2023, according to a recent report. A total of $208.5 million was initially lost during the quarter, but $4.5 million was recovered through prosecutions, deals with hackers and other recovery methods. The number of DeFi hacks in Q2 rose by “almost 7 times” year-over-year, with 117 incidents during the period, compared with only 17 in the same quarter of 2022. A total of over $665 million was lost during the first half of 2023.

Revolut US to delist ADA, MATIC and SOL in September

Crypto-friendly neobank Revolut is next to delist a batch of digital assets on its platform in the United States amid the ongoing regulatory developments in the country, including the complete delist of tokens like Cardano (ADA), Polygon (MATIC) and Solana (SOL). The firm, however, still supports the tokens in other jurisdictions outside the country. ADA, MATIC and SOL were labeled as unregistered securities by the SEC in early June.

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