Tag: Regulator

Brazil’s Securities Market Regulator Targets Mercado Bitcoin over Token Sale

by Blockchain News

The Brazilian Securities and Exchange Commission (CVM), the securities market regulator in Brazil, has ordered Mercado Bitcoin, the largest cryptocurrency exchange in Brazil, to provide information on fixed-income tokens the exchange has issued over the last two years.

According to reports by Estadão newspaper, the capital markets regulator wants to know the amount Mercado Bitcoin raised with the tokens and see a list of investors who participated.

While the report did not reveal the names of the tokens, it confirmed that they were issued on a blockchain and allegedly backed by real-world assets. The report further said the tokens were “low risk and high yield” in “consortium, energy, writs of payments and receivables.”

Mercado Bitcoin has responded to the matter, saying that its token sales fully complied with Brazil’s regulatory framework. The exchange further said it “actively” works with the securities market regulator and Brazil’s central bank to “contribute to the construction of regulations for the sector.”

“We do not make public offerings of securities outside the scope of the authorizations we hold as an authorized crowdfunding platform and investment manager,” Mercado said.

In early this month, the CVM banned the Singapore-based crypto exchange Bybit from brokering securities in the country. On September 5, Bybit was booted out of the Brazilian market over its alleged unregistered securities offering. The country’s securities watchdog ordered the Singaporean exchange to cease operations immediately or face a daily fine.

The CVM alleged that Bybit was seeking to raise funds from Brazilian investors for investments in securities without the company having the authorization to act as a securities intermediary. The regulator argued that only Brazil’s stock exchange B3 is allowed to offer securities in the country.

This month, 2TM Group, Mercado Bitcoin’s parent company, criticized Brazilian regulators for not being clear about regulating cryptocurrency. The company said the current environment in Brazil is unfair and has not yet developed a clear regulatory framework for crypto-activities.

Meanwhile, reports indicate that the CVM is preparing to release an official crypto guide soon but encourages companies to consult the commission before issuing any token that may be considered a security.

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Spain’s Regulator Clashes with Popular Football Star Andres Iniesta Over Binance’s Tweet

by Blockchain News

Spain’s market watchdog has clashed with one of the country’s football heroes in promoting a cryptocurrency platform on social media.

Andres Iniesta, a famous football striker who scored the winning goal that made Spain win its first soccer World Cup in 2010, found himself in a heated battle with Spain’s National Securities Markets Commission. He took to Twitter to say that he was using the Binance crypto exchange.  

“I’m learning how to get started with crypto with @binance,” the former FC Barcelona player wrote in his tweets on Wednesday, November 24.

The regulator then responded to Andres Iniesta after posting photos of himself using the Binance platform on social media. The National Securities Markets Commission tweeted late Wednesday, reminding Iniesta that cryptocurrencies are non-regulated products with some significant risks.

“All of this prompted us to say last night to Iniesta, whom we admire and who has given us great pleasure, please, before recommending this, tell your followers about the risks; it is your responsibility too,” the agency stated.

The watchdog clarified to the football star that it is best to read up on the risk of crypto assets before making investments or recommendations to others. 

The regulator mentioned that it is concerned about players and other influencers who promote crypto assets to audiences who do not necessarily understand how the market works or what rules to be applied or not apply.

The commission urged celebrities and influencers to take care about recommending investments in unregulated products which carry additional risks to the public.

Iniesta currently plays for Vissel Kobe, the Japanese club owned by Rakuten Japanese electronic commerce and online retailing company. Iniesta representatives have not responded to comments required by media journalists.

Sports Fans Are into Cryptocurrency

Iniesta is not the only popular football star who has posted an ad for Binance. Atletico Madrid striker Luis Suarez, Colombian player James Rodriguez, and Raul Jimenez, who plays for Premier League club Wolverhampton Wanderers, all posted photos of themselves on Binance under the #BinanceForAll hashtag early this month.

The cryptocurrency exchange featured the three footballers in a post promoting a social media contest in the previous week: “Get creative with @jamesdrodriguez, @LuisSuarez9, @Raul_Jimenez9 on #Binance, and you may win.”

The three football stars have a total of 39 million followers on Twitter.

As crypto-assets exploit in value, several firms have popped up virtually to help investors buy and set digital currencies. Binance is among the biggest. Last month, Lazio became the latest Series A club to partner with Binance exchange when it struck a sponsorship deal to make the crypto firm the main club Jersey sponsor.

Last week, the Staples Center, home to Log Angeles’ several professional sports teams, including the NBA’s Los Angeles Lakers and Clippers and the NHL’s LA Kings, got a new name, “Crypto.com Arena”, as part of a new 20 year- deal between arena owner AEG and the Singapore crypto exchange.

Such partnerships help to raise awareness of digital currency platforms as well as the coins themselves.

 

According to a survey by the Association of Financial Users of Spain, a consumer protection non-profit organization, recently estimated that more than 4.4 million citizens of Spain have invested in cryptocurrencies, and 41% of them consider cryptocurrencies as safe investments.

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3 reasons why a Bitcoin ETF approval will be a game changer for BTC price

by Cointelegraph

Some financial experts believe that the price of cryptocurrencies is solely driven by investors’ speculation, and in the past few years detractors have suggested that fixed income instruments like treasury bills have no relation to do with digital assets. This point of view is fairly accurate because, at this time, most investors from the asset class are not allowed to invest in Bitcoin (BTC) and altcoins.

Public pension funds, retirement plans, fixed income and most non-leverage equity and multimarket mutual funds can only invest in certain asset classes. These limits arise from the fund class regulation, the fund’s own bylaws, and the administrator’s risk assessment.

Not every fund can invest in Grayscale’s GBTC Trust

Unbeknownst to most, the mutual fund manager does not have absolute control of the investment decision. The fund administrator is a third-party company that acts as an intermediary between the fund manager and investors to verify and distribute assets tied to investments.

Therefore, the fund administrator might rule that a particular instrument poses a significant risk and either limit the exposure or deny access to it. The trust fund, in this example, is the investment vehicle used by the Grayscale Bitcoin (GBTC), and it involves an issuer credit risk.

Amundi funds breakdown by asset class. Source: Amundi.com

Global asset managers will typically have a 30% to 60% fixed income exposure, so it is very unlikely to have any exposure to cryptocurrencies. Amundi, the leading European investment firm with over $2.1 trillion of assets under management, is a good example.

According to BCG Group, the global asset industry has surpassed $100 trillion, with North America holding nearly 50% of this figure. Unfortunately, these astronomical figures cause analysts to incorrectly relate those numbers to the Bitcoin ETF instrument.

According to Reuters, more than half of all investment-grade corporate bonds in the eurozone now trade with negative yields. This includes $7.7 trillion worth of government debt and accounts for 70.8% of the total.

Financial Times has reported that the value of the global negative-yield debt has surpassed $16.5 trillion, fueled by investors’ more pessimistic outlook and bond purchases by central banks.

Investors will gradually exit fixed income strategies

There’s reason to believe that investors getting negative yields will eventually move to riskier assets, although it is improbable that a total shift to cryptocurrencies will occur. However, the most likely beneficiaries are non-leverage multi-assets and alternative investments as these instruments usually carry lower risk than equities and high-yield structured assets and bonds.

Consequently, an eventual Bitcoin ETF approval by the U.S. Securities and Exchange Commission (SEC) will open the doors for a vast array of funds that are currently shut out from cryptocurrency exposure.

Even if the ETF is exclusively reserved for a part of the equities and multi-asset classes, the new instrument doesn’t need to capture $500 billion to propel Bitcoin’s market capitalization above $2 trillion. Less than 2.5 million coins are deposited on exchanges, equivalent to $125 billion readily available for trading.

Commodity funds are the best candidate

According to iShares, the value of global commodities exchange-traded products adds up to $263 billion. Considering not every mutual fund is listed, it is reasonable to assume that the actual number surpasses $500 billion.

This means that a mere 1% allocation from this specific asset class is equal to $5 billion, and such an investment would surely be enough to propel the Bitcoin price above its $65,000 all-time high.

If and when a BTC ETF is approved, traders will front-run the potential inflow as soon as the approval is announced, regardless of whether the products capture only $5 billion in the first couple of months.

As long as governments and central banks continue injecting liquidity, buying bonds and issuing stimulus packages, there will be a gradual inflow to riskier assets, increasing the demand for the ETF.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.