BlackRock and SEC Discuss iShares Bitcoin Trust Listing on Nasdaq

On November 20, 2023, a critical meeting was held between the United States Securities and Exchange Commission (SEC) and representatives from BlackRock, Inc., and the Nasdaq Stock Market LLC. The meeting’s primary focus was the discussion of the iShares Bitcoin Trust and its potential listing on Nasdaq as a spot Bitcoin exchange-traded fund (ETF).

The SEC’s Division of Trading and Markets hosted the meeting, attended by key personnel including David Shillman, Tom McGowan, Randall Roy, Ray Lombardo, Molly Kim, Edward Cho, Sarah Schandler, and Stacia Sowerby. Representing BlackRock were Rachel Aguirre, Adithya Attawar, Shannon Ghia, Robert Mitchnick, Charles Park, Marisa Rolland, and Ben Tecmire. Additionally, Eun Ah Choi, Jonathan Cayne, Giang Bui, and Ali Doyle represented The NASDAQ Stock Market LLC.

BlackRock’s presentation to the SEC included a detailed exposition of two potential models for the iShares Bitcoin Trust: the “In-Kind Redemption Model” and the “In-Cash Redemption Model.” These models outlined the mechanics of how the ETF could operate, focusing on the redemption process involving market makers, bitcoin custodians, and various exchanges.

The In-Kind Redemption Model entails a process where the ETF issuer instructs the Bitcoin Custodian to release bitcoin to a market maker, who may then unwind the bitcoin position. This model involves various parties, including a U.S. Registered Broker/Dealer, spot crypto exchanges, and a listing exchange.

The In-Cash Redemption Model, on the other hand, involves the ETF issuer trading with the market maker to sell bitcoin for USD. This model includes additional steps involving the Bitcoin Custodian moving cash out of cold storage and the market maker delivering shares to the Transfer Agent via an Authorized Participant.

The SEC’s response to BlackRock’s presentation and proposed models remains unclear, with no information on whether the SEC plans to approve the listing of a spot Bitcoin ETF. The approval of such an ETF would represent a major milestone in the acceptance of cryptocurrency in mainstream financial markets.

This meeting comes amid ongoing reviews by the SEC of various proposals for spot crypto ETFs from several firms, including Fidelity, WisdomTree, Invesco Galaxy, Valkyrie, VanEck, and Bitwise, alongside BlackRock. The push for a spot Bitcoin ETF has seen several delays and denials, creating a sense of anticipation and uncertainty in the crypto and financial markets.

The SEC has also met with executives from Grayscale on the same day to discuss their proposal for a Bitcoin ETF. The meeting with BlackRock and the ongoing reviews indicate the SEC’s active engagement in understanding and potentially integrating cryptocurrencies into regulated financial products.

BlackRock’s application to list a spot Bitcoin ETF on the Nasdaq was initially filed in June 2023. The discussion around Bitcoin ETFs has been fueled by a 2019 video of SEC Chair Gary Gensler, where he criticized the commission’s “inconsistent” approach to Bitcoin products. The approval of a spot Bitcoin ETF by the SEC would be a landmark decision, potentially paving the way for wider acceptance and integration of cryptocurrencies in the mainstream financial sector.

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US Bitcoin Corp-Hut 8 Merger Progresses Amid Celsius Plan Approval

U.S. Data Mining Group, Inc., doing business as US Bitcoin Corp (USBTC), today announced two pivotal developments: the progression of its merger with Hut 8 Mining Corp (“Hut 8”) and the court approval of the Celsius bankruptcy restructuring plan.

USBTC is advancing its all-stock merger (the “Transaction”) with Hut 8, a leading North American digital asset mining and high-performance computing infrastructure provider. The Securities and Exchange Commission (SEC) declared the registration statement for the merger effective on November 9. Asher Genoot, President and Co-Founder of USBTC, expressed enthusiasm about the merger, stating, “Joining forces with Hut 8 marks a new phase of growth for our shared company. This merger shows our ongoing dedication to operational excellence and provides a strengthened platform for our shared future.”

The merger is anticipated to be finalized by November 30, 2023, pending approval from USBTC stockholders and other customary closing conditions. Post-merger, the common stock of the new entity, Hut 8 Corp. (“New Hut”), is expected to be listed on the Nasdaq and the Toronto Stock Exchange under the proposed ticker symbol HUT.

In another significant development, USBTC, alongside consortium partners Arrington Capital, Proof Group, Steve Kokinos, and Ravi Kaza, acknowledges the court’s approval of the Celsius bankruptcy restructuring plan. This approval marks a crucial step for the consortium to begin managing Celsius’s assets and operations. The plan received overwhelming support from creditors, with a 95% approval rate.

The approved plan outlines a strategy for establishing and operating a new public, regulatory-compliant company to manage Celsius’ illiquid assets. This move signifies USBTC’s commitment to shaping the future of the cryptocurrency industry through operational excellence and innovative solutions.

USBTC, founded by visionary entrepreneurs and experienced executives, is a prominent North American mining company known for its efficiency, eco-friendliness, and large-scale operations. With campuses in New York, Nebraska, and Texas, USBTC aims to set industry standards.

Recently, Hut 8 Mining Corp has received the green light from the Canadian Supreme Court for the merger with USBTC. This approval further solidifies the merger’s progression and highlights Hut 8’s commitment to transparency and regulatory compliance in the cryptocurrency mining sector.

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NASDAQ Listed MIGI Boosts Bitcoin Self-Mining in July 2023 Operational Update

Mawson Infrastructure Group Inc. (NASDAQ:MIGI), a leading figure in the digital infrastructure and Bitcoin mining landscape, has unveiled its unaudited business and operational update for July 2023.

Mawson Infrastructure Group (NASDAQ: MIGI) is not just a digital infrastructure company but a beacon in the Bitcoin and crypto industry across the USA. Their model, infused with AI-driven strategies, champions the global transition to the digital economy, with a pronounced focus on efficient Bitcoin production.

The company reported a significant 23% month-on-month surge in its “Total Revenue Equivalent in BTC”, reaching a figure of 163. This showcases Mawson’s growing footprint in the Bitcoin ecosystem. As of July 31, 2023, the company’s operational capacity was approximately 96 Megawatts, supporting around 27,636 Bitcoin miners.

Rahul Mewawalla, the CEO and President of Mawson, emphasized the company’s dedication to Bitcoin and the broader crypto ecosystem. “During July, we amplified our Bitcoin self-mining capabilities, leveraging AI-driven enhancements in our hardware and miner management software analysis. Our strategic location in the PJM power market, combined with our tech-forward approach, positions us at the forefront of the Bitcoin mining industry,” he said.

July’s Bitcoin-centric results revealed:

  1. Total Revenue Equivalent in BTC: 163
  2. Total Self-Mining Bitcoin Production: 69
  3. Monthly Revenue for July 2023: Approximately $4.89M
  4. Bitcoin Self-Mining Monthly Revenue: $2.07M
  5. Hosting Co-location Monthly Revenue: $1.78M
  6. Energy Market Program Monthly Revenue: Approximately $1.04M

Mawson’s 2023 vision is deeply intertwined with the crypto world. They are exploring expansion opportunities in the crypto-friendly PJM energy markets, especially in Pennsylvania and Ohio. The company is also keen on securing strategic sites for long-term digital infrastructure capacity, ensuring a robust foundation for their Bitcoin and crypto operations.

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Former Coinbase CLO Brian Brooks Joins Hashdex’s Board of Directors

Hashdex, a global pioneer in crypto asset management, announced the addition of Brian Brooks to its Board of Directors. The board now expands from four to five members. Brooks, a representative of Hashdex investor Valor Capital Group, will serve as a strategic advisor, providing counsel on global regulation to further Hashdex’s global market growth.

Hashdex, known for co-developing the Nasdaq Crypto Index™ (NCI™) with Nasdaq, provides global investors with a reliable benchmark for the crypto asset class. In 2021, Hashdex introduced the world’s first crypto ETFs and other innovative products, enabling over 225,000 investors to simply and securely add crypto to their portfolios.

Brooks, often referred to as the “first fintech Comptroller,” is recognized as a visionary global leader in financial services, fintech, and cryptocurrency. His career is marked by historic achievements on bank charters, including granting the first fintech and crypto charters, and promoting bank-fintech partnerships. As a member of Hashdex’s Board, Brooks will enhance the firm’s efforts to bridge the gap between the crypto ecosystem and traditional finance, accelerating institutional adoption and scaling key partnerships with financial organizations and policymakers worldwide.

Marcelo Sampaio, Co-Founder and CEO of Hashdex, stated, “Brian’s extensive experience as a leader in financial regulation and the crypto industry will help Hashdex meet our core mission of giving investors simple and secure access to the developing crypto ecosystem. His proven ability to push forward thoughtful, innovation-driven public policy is much needed at this time, and we are thrilled to have him as a partner and advisor.”

Prior to joining Valor, Brooks served as CEO of two blockchain-focused companies and as chief legal officer of global crypto exchange Coinbase. He was also acting U.S. Comptroller of the Currency, heading the U.S. government agency that charters and supervises the national banking system. He served as a member of the FDIC board of directors and as a voting member of the Financial Stability Oversight Council.

Brooks currently serves as a Managing Partner at Valor Capital Group, a Venture Capital fund manager founded in 2011 that pioneered the “Cross-Border” strategy, seeking to act as a bridge between the U.S. and Latin America technology markets. Valor, which invests in transformative businesses from startup to scale-up stages, led Hashdex’s Series A round and has been supporting the company with strategic, business development, and regulatory initiatives in Brazil and abroad.

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Nasdaq to Launch Digital Asset Custody Services

The global securities marketplace known as Nasdaq is planning to join the cryptocurrency business by the end of the second quarter of 2022 when it will provide its custody services for digital assets. Ira Auerbach, Senior Vice President of the exchange operator, is in charge of the digital assets division, which has submitted an application to the New York Department of Financial Services for a limited-purpose trust company charter. This charter would allow the department to monitor the new business.

The initiative, which was unveiled for the first time in September, will begin with the storage of Bitcoin and Ether, with the intention of ultimately offering a whole suite of services for the division, including the execution of transactions for financial institutions. Before the launch, Auerbach stressed the group’s commitment to ensuring that all of the essential governmental permissions and technological infrastructure are in place.

It is possible that Nasdaq’s introduction into the cryptocurrency market will be a big step forward for the industry. This comes at a time when conventional financial institutions are increasingly filling the void left by industry bankruptcies. The reputation of the exchange and its presence in the worldwide market might help enhance institutional investor trust in the cryptocurrency market, which would pave the road for more conventional financial institutions to follow suit in the future.

The decision by Nasdaq is similar to those taken by other prominent financial institutions, such as BNY Mellon and Fidelity, who provide services related to the storage of cryptocurrencies. These offers are a reflection of the increased demand from institutional investors for exposure to digital assets. Digital assets are considered by some as an alternative asset class that may bring advantages of diversification when included in a portfolio.

Traditional financial institutions have been hesitant to provide these types of services despite the rising interest in digital assets; this reluctance may be attributed to worries over the regulatory clarity and security risks connected with digital assets. But, with Nasdaq’s introduction into the market, it is feasible that more institutions may follow suit, as they attempt to profit on the potential development prospects that exist within the cryptocurrency business.


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Argo Blockchain IPO: Lawsuit Claims Miner Made Untrue Statements

During the selling phase of the initial public offering (IPO), which took place in 2021, investors in the cryptocurrency mining firm Argo Blockchain have launched a class-action complaint against the miner. The investors accuse the miner of making deceptive promises and omitting essential facts in their complaint. The investors claim that the miner purposefully deceived them in their dealings with him. According to the allegations that have been levelled against the miner in this scenario, the miner is said to have acted in such a way on purpose with the intention of misleading prospective investors.

Argo was the target of a fresh new legal action that was initiated on January 26. In addition to important staff members, the lawsuit counts as defendants a considerable number of directors on the company’s board of directors as well as other employees. It is alleged that the corporation did not provide an explanation as to the extent to which it was susceptible to difficulties such as network connection, financial restrictions, and the cost of electricity.

In the lawsuit, it was alleged that the offering papers were drafted in a sloppy manner, and as a consequence, they contained inaccurate representations of important facts or failed to give additional information that was essential to ensure that the assertions made did not mislead anyone. In addition, it was alleged that the offering papers contained representations of important facts that were inaccurate, and as a result, the lawsuit was filed. The corporation that was sued is the one that was responsible for putting out the offering papers. In addition to this, it was stated that the offering materials included deceptive assertions of key facts with the goal of deceiving potential investors.


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Argo Blockchain regains stock listing compliance with Nasdaq

The Bitcoin (BTC) mining company Argo Blockchain has regained stock listing compliance with Nasdaq, which coincides with the recent positive movement seen on cryptocurrency markets.

Amidst the recent uptick in share price, Argo made the formal announcement on January 23 that the firm had once again achieved compliance with the minimum bid price guideline imposed by Nasdaq. Argo has been advised by the Nasdaq stock market listing requirements department that it has successfully satisfied a criteria to maintain a minimum closing bid price of $1 for ten consecutive trading days in order to be eligible for listing on the Nasdaq stock market.

On January 13, this criteria was satisfied, and Nasdaq subsequently confirmed that it believes the situation to be resolved.

After notifying Argo on December 16 that the company was not in compliance with Nasdaq’s minimum bid price standard, Nasdaq has now made this notice approximately a month and a half later.

The problem arose as a result of the fact that Argo’s common stock had not been able to maintain its minimum bid price of $1 during the prior thirty consecutive business days, as is required by the listing regulations of the Nasdaq.

Trading on the Nasdaq was temporarily halted because the cryptocurrency mining firm was experiencing financial difficulties as a result of declining Bitcoin (BTC) prices in addition to rising energy expenses.

In September 2021, trading of American depositary shares (ADS) issued by Argo began on the Nasdaq Global Select Market under the ticker code ARBK.

After opening at a price of $15, ARBK shares have been continuously decreasing in price, and by October 2022, they will have fallen to a price lower than $1.

After receiving a warning from Nasdaq in December that the company was on the verge of becoming noncompliant, ARBK shares eventually began to rebound.

According to information provided by TradingView, the price of Argo’s shares hit $1 for a short period of time on December 30, but it was unable to sustain that price.

After making another attempt at the price level on January 3, ARBK stock has kept trading higher than it was before.

At the end of trading on January 20th, the share price was $1.73.

Argo is not the only publicly traded Bitcoin mining company that has been fighting a losing battle to keep its share values at or above $1.

The Bitcoin mining business Bitfarms, which is based in Canada, was issued a similar warning by Nasdaq on December 15 about its Bitfarms shares (BITF).

In contrast to ARBK, shares of Bitfarms have not yet shown sufficient growth to satisfy the requirements of the Nasdaq for listing.

After reaching beyond $1 for the first time on January 12, BITF fell back below the barrier for the second time on January 18.


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Bitcoin Miner Digihost Under Risk of Delisting from Nasdaq

Crypto miner Digihost is under scrutiny and has been threatened with getting delisted by Nasdaq for trading below $1 for 30 consecutive days.

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The bitcoin miner is among the many that have fallen into the danger zone of losing their spots on major U.S. stock exchanges.

Digihost has been given grace periods of up to 180 days to resolve the issue. The company must comply with Nasdaq listing rules by trading for $1 or more for at least 10 consecutive days.

In a document filed on last Friday, Digihost stated that the company’s operations have been going on as usual despite the complaint.

“The Company’s business operations are not affected by the receipt of the Notification Letter, and the Company fully intends to resolve the deficiency and regain compliance with the Nasdaq Listing Rules,” Digihost said in the filing.

Besides Digihost, two other public mining companies have also come close scrutiny from Nasdaq.

Public miners — Mawson Infrastructure Group and BIT Mining – need better stock performance to keep their listings on Nasdaq and the New York Stock Exchange (NYSE), respectively.  

Three other companies fell under the $1 threshold last week alone, and only a few have been trading slightly above that threshold.

In case, the stock price does not recover to over $1 per share, many companies will potentially get delisted from Nasdaq.

The stock price fall is related to the coin’s cost, which has fallen about 50% in the last six months and 70% since the all-time high of around $67,550 in November last year.

Furthermore, rising power costs have also added to the strain as it has squeezed profits for bitcoin miners and mining difficulty jumped 13.55% last week to an all-time high.

Meanwhile, last week, a group of crypto firms led by Bitcoin mining tech provider Braiins and Block Inc’s subsidiary funding Bitcoin development called Spiral are promoting the adoption of Stratum V2 protocol.

The upgrade from Stratum V1 would improve security for miners and for the network, help further decentralize the network, and make communication more efficient, a joint statement from Braiins and Spiral said.

Stratum’s second version (V2) promises to bring many improvements to the protocol, including censorship resistance and allowing miners to choose their own work rather than being assigned workloads by pools, which would increase the Bitcoin network’s decentralization. The report elaborated that the upgrade is necessary to support an increase in pooled mining and further growth in hashrate.

The working group now focuses on building and sharing tools for all mining firms to rapidly and seamlessly upgrade to Stratum V2 protocol.

As per the announcement, the working group has released the first version of an open-source Stratum V2 reference implementation (SRI) for testing. The report said that the SRI will allow anyone to run the upgraded protocol or use it as a guide for their own implementation of Stratum V2.

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No Plans to Launch Crypto Platform Yet: Nasdaq

Nasdaq plans to wait for further clarity in terms of crypto adoption globally, the company’s executive vice president and head of North American markets said.

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Tal Cohen said that the world’s second-largest stock exchange is awaiting greater regulatory clarity and institutional adoption around crypto exchanges before planning to launch a platform of its own.

“Those are discussions we are happy to have,” Cohen told Bloomberg TV on Tuesday. 

“But right now, on the retail side, the market is fairly saturated,” he added. “There’s a number of exchanges servicing the retail customer base.”

Nasdaq instead plans to stay focused on its crypto custody services. Cohen said that these services are foundational for clients, citing “massive” demand ad opportunity there.

“We think if you can safe-keep peoples’ assets, they’ll trust you to do everything else afterwards,” he said.

Cohen added that along with safe-keeping services, Nasdaq is working on facilitating the movement and transfer of the assets by building out its execution capabilities.

In September, Nasdaq announced it would offer custody services for Bitcoin and Ether to institutional investors. To do so, the firm hired Ira Auerbach, who ran prime broker services at crypto exchange Gemini, to head the new Nasdaq Digital Assets unit.

The primary target market for the Nasdaq exchange is institutional investors, as adoption has grown remarkably amongst these classes in the past few years. While accumulating crypto is one thing, safeguarding them is another, and company-owned funds are not supposed to be handled by solely one person.

According to Blockchain.News, This calls for the need for custodial services. While exchanges like Coinbase, Gemini, and Kraken are already dominating the crypto custody space for institutional investors, many believe Nasdaq is not yet late to the party.

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Bitcoin Miner Rhodium Plans to List on Nasdaq through Reverse Merger

Bitcoin miner Rhodium Enterprises is planning to list on Nasdaq under the ticker “RHDM” through a reverse merger with business consulting firm SilverSun Technologies Inc., Bloomberg reported on Sept. 30.

The deal is scheduled to close by the end of this year, and investment bank B. Riley will serve as Rhodium’s financial advisor.

Rhodium, one of the few major Bitcoin miners that use a proprietary liquid-cooling system, has been seeking a listing since last year that delayed its debut in the $1.5 billion to $1.7 billion valuation range on the Nasdaq earlier this year due to a sharp drop in the price of cryptocurrencies such as Bitcoin (BTC) plans for a public offering.

According to the official filing, SilverSun shareholders will receive a cash dividend of at least $1.50 per share, for a total of $8.5 million and additional stock dividends.

Under the merger agreement’s terms, Rhodium will also create stock in a new subsidiary that incorporates SilverSun’s traditional business. SilverSun’s board members will continue to serve after the transaction closes.

Rhodium CEO Chase Blackmon said in a statement that:

“We believe access to U.S. capital markets is paramount to sustainable, long-term success in our capital-intensive industry. We believe this strategic transaction will unlock long-term accretive value for Rhodium’s shareholders.”

Rhodium, which recently closed an $11.9 million financing round, plans to raise $30 million through debt, options, and securities, according to SEC filings earlier this month.

The company had planned to issue 7.69 million shares for $12 to $14 apiece, according to IPO documents filed with the SEC in January.

Texas-based Rhodium mines bitcoins on its own using “proprietary liquid-cooled mining technology,” allowing it to average $2,507 in electricity bills per bitcoin it mines throughout 2021, according to the company’s website.

For the nine months ended Sept. 30, Rhodium recorded a net income of $46.1 million, or $0.10 per share, on revenue of $82.1 million.

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Bitcoin (BTC) $ 37,917.16 0.43%
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Bitcoin Cash (BCH) $ 222.39 0.09%