Tag: Regulatory Clarity

Binance Survey: Institutional Investors Bullish on Crypto’s Long-Term Prospects

by Blockchain News

Binance Research, in collaboration with Binance VIP & Institutional, has recently unveiled the results of their Institutional Crypto Outlook Survey. The study reveals a strong positive sentiment towards cryptocurrencies among institutional investors, with 63.5% expressing optimism for the next year and a striking 88% displaying a positive outlook for the next decade.

The survey, which ran from March 31 to May 15, 2023, gathered responses from 208 Binance VIP and Institutional users. It aimed to explore the demographics, attitudes, preferences, and motivations of these investors towards cryptocurrency investments.

Key findings from the survey indicate that despite market fluctuations over the past year, 47.1% of investors have maintained their crypto allocation, while 35.6% have increased their allocation. Only a minority, 17.3%, have decreased their crypto allocation. Looking forward, the majority of respondents expect to either increase (50.0%) or maintain (45.7%) their allocation over the next 12 months.

The study also highlights that institutional investors believe that the adoption of cryptocurrencies will be driven more by real-world use cases (26.9%) and improvements in regulatory clarity (25.3%) rather than higher prices (3.4%). This suggests that institutional participation in the crypto market is taking on a longer-time horizon, less reactive to short-term market cycles.

Interestingly, the survey reveals a more positive perception of Bitcoin compared to the broader crypto sector. While perceptions of Bitcoin and crypto remained largely unchanged over the past year (47.8% and 44.7% respectively), a larger proportion of respondents have turned more positive on Bitcoin (47.3% vs. 33.2%).

When it comes to investment motivation, 42.8% of investors cited the potential for large investment returns as the most compelling reason for investing in cryptocurrencies. This was followed by 37.5% of investors who see gaining long-term exposure to an emerging technology as the primary motivation.

Centralized Exchanges remain the most popular platform for institutional trading (90.5%) and custody activities (58.2%). The top three criteria for selecting a trading platform were liquidity (28.0%), security (26.0%), and reputation (22.5%).

Catherine Chen, Head of Binance VIP and Institutional, commented on the findings, “Institutions typically take a long-term horizon when they enter a new market, and our survey indicates that is likewise for crypto assets. These findings match the healthy rate of institutional account growth on Binance, which has increased 89% since the height of the bull market in Q4 2021.”

The results of this survey underscore the growing institutional interest and confidence in the long-term potential of cryptocurrencies. 

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Coinbase vs SEC: Legal Battle Heats Up

by Blockchain News

Coinbase, the largest US-based cryptocurrency exchange, has been embroiled in a legal battle with the US Securities and Exchange Commission (SEC) over regulatory clarity for trading digital assets. On May 4th, Coinbase’s chief legal officer Paul Grewal announced that the US Court of Appeals for the Third Circuit has responded to the complaint against the SEC, marking a significant development in the ongoing legal battle.

The court’s response was a text-only order, instructing the SEC to respond to Coinbase’s writ of mandamus within ten days. A writ of mandamus is a court order that compels an inferior government official to fulfill their official duties properly. The court also granted Coinbase the right to file a reply to the SEC’s response within seven days of the filing.

Coinbase filed a lawsuit in April, requesting that the court compel the SEC to publicly disclose its stance on a petition submitted several months prior. The petition posed 50 specific questions about the regulatory treatment of certain digital assets, covering topics such as how tokens are classified as securities and seeking clarification on various other matters.

Despite the lack of public response to the petition, the SEC has increased enforcement and issued warnings to crypto exchanges. The commission has even issued a Wells notice to Coinbase in the past, warning the company that the SEC may follow with an enforcement action.

Due to the ongoing regulatory issues faced by the company, US investment bank Citigroup has downgraded the shares of the crypto exchange from “buy” to “neutral,” and has also lowered its price target. The bank has cited “too many unknowns” as the reason for this downgrade. According to Citi analyst Peter Christiansen, the downgrade will remain in place until the regulatory “rules of the road” are better established in the United States.

The legal battle between Coinbase and the SEC highlights the need for greater regulatory clarity in the cryptocurrency industry. While the industry has seen rapid growth in recent years, the lack of clear guidelines from regulatory bodies has led to confusion and uncertainty for businesses and investors alike. As the battle between Coinbase and the SEC continues, it remains to be seen how the regulatory landscape for digital assets will evolve in the United States and beyond.

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US House to Hold Joint Hearings on Digital Assets

by Blockchain News

The US House of Representatives is taking steps to provide regulatory clarity to the digital asset ecosystem. The House Financial Services Committee, Agriculture Committee, and subcommittees will hold joint hearings in May to address the market structure around digital assets in the United States. The hearings aim to provide clear rules of the road for the crypto sector, which will help protect consumers without stifling responsible innovation.

The joint hearings will be led by Representative Patrick McHenry, the House Financial Services Committee chairman, and Representative Glenn Thompson, chairman of the House Agriculture Committee, along with Representative French Hill and Dusty Johnson, chairmen of the Digital Assets, Financial Technology and Inclusion Subcommittee, and the Commodity Markets, Digital Assets, and Rural Development Subcommittee, respectively.

The House committees’ goal is to provide a holistic view of the regulation and market structure around digital assets. The hearings will cover various aspects of the digital asset ecosystem, from capital raising to how a product can go from a securities regime to commodities regime while preserving rights around products that do not fit into either regime. The committees aim to report a bill out based on the hearings’ outcomes.

During the Consensus 2023 event on April 28, McHenry provided additional context to the upcoming hearings. He stressed that the House is looking to establish a bill that provides regulatory clarity to the crypto sector. The goal is to strike a balance between protecting consumers and promoting responsible innovation in the digital asset ecosystem.

McHenry emphasized that the joint hearings aim to provide a holistic view of the market structure around digital assets. He added that the committees plan to report a bill out over the next two months, dealing with various aspects of the digital asset ecosystem.

The hearings will add to the work on a bipartisan bill led by Senator Cynthia Lummis and Senator Kirsten Gillibrand. The Responsible Financial Innovation Act, also known as the Lummis-Gillibrand bill, was introduced in the U.S. Senate in June 2022. The bill addresses Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) jurisdiction, stablecoin regulation, and crypto taxation, among other issues.

The wide-sweeping Lummis-Gillibrand bill has faced delays, likely due to its complexity for non-crypto-versed Senators. Lummis and Gillibrand have revised the bill and are expected to release the next draft soon. McHenry stressed that the House’s attempt to establish a bill will complement the work done by Lummis and Gillibrand in the Senate.

In addition, Lummis suggested that the revised bill will likely have an additional focus on “national security interests,” such as cybersecurity. The goal is to address concerns among skeptics about digital assets and ensure that cybercrime is adequately addressed in the bill. The revised bill may also include provisions that require certain registrations, so companies are properly regulated and vetted.

Overall, the joint hearings by the US House of Representatives aim to provide regulatory clarity to the digital asset ecosystem.

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US House Committees To Hold Joint Hearings On Digital Asset Regulations

by Blockchain News

The US House Financial Services and Agriculture Committees, along with the Digital Assets, Financial Technology and Inclusion Subcommittee, and the Commodity Markets, Digital Assets, and Rural Development Subcommittee will hold joint hearings in May to establish regulatory clarity for the digital asset ecosystem. Representative Patrick McHenry, the House Financial Services Committee chairman, has announced that the hearings aim to establish a bill providing regulatory clarity to the crypto sector, which adds to the work on a bipartisan bill led by crypto-friendly Senator Cynthia Lummis and Senator Kirsten Gillibrand.

The move was revealed in a joint announcement on April 27 from McHenry and Representative Glenn Thompson, chairman of the House Agriculture Committee; Representative French Hill, chairman of the Digital Assets, Financial Technology and Inclusion Subcommittee; and Dusty Johnson, chairman of the Commodity Markets, Digital Assets, and Rural Development Subcommittee. The joint statement reads: “Our Committees are embarking on an unprecedented joint effort to pass and sign into law clear rules of the road for the digital asset ecosystem. We must strike the appropriate balance to protect consumers without stifling responsible innovation.”

McHenry spoke as part of a panel alongside crypto-friendly Senator Cynthia Lummis during the Consensus 2023 event on April 28, adding more context to the upcoming hearings. “We’re going to hold joint hearings when we return in May. This is going to be the first time we have had a holistic view for a House committee hearing around the regulation, our market structure around digital assets, and a holistic view of it.”

He also stressed that the hearings aim to establish a bill providing regulatory clarity to the crypto sector, which adds to the work on a bipartisan bill led by Lummis and Senator Kirsten Gillibrand. The Responsible Financial Innovation Act, also known as the Lummis-Gillibrand bill, was initially introduced in the US Senate in June 2022, and addresses Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) jurisdiction, stablecoin regulation and crypto taxation, among other issues.

The wide-sweeping bill has faced delays, likely due to its complexity for non-crypto-versed Senators. Lummis and Gillibrand have since revised the bill and are expected to release the next draft soon. Commenting on the revised bill, Lummis suggested that this iteration will likely have an additional focus on “national security interests” such as cyber security. “Some of the people that I speak to that remain very skeptical about digital assets are concerned that cybercrime is not adequately addressed in our bill. So I think you’ll see a stronger cybercrime aspect to our bill. I think you’ll see some provisions that require certain registration […] so that companies are properly regulated and vetted.”

The joint hearings in May will aim to provide regulatory clarity on the digital asset ecosystem and strike the appropriate balance to protect consumers without stifling responsible innovation. The hearings will focus on addressing the market structure around digital assets in the United States, which includes capital raising and transitioning products from a securities regime to a commodities regime.

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Coinbase CEO Compares SEC to Soccer Refs in Criticism of Lack of Clarity Around Crypto Regulation

by Blockchain News

In a recent development, Coinbase, the popular cryptocurrency exchange, has been issued a Wells notice by the United States Securities and Exchange Commission (SEC), which typically precedes an enforcement action. The news prompted Coinbase CEO, Brian Armstrong, to criticize the SEC for its lack of clarity around crypto regulation. In a series of tweets, Armstrong compared the SEC to “soccer refs” in a game of pickleball, arguing that they could not agree on the rules of the “new game” of crypto regulation.

Armstrong’s criticism comes as the crypto industry faces ongoing debates around who should be the primary body regulating crypto, with the SEC being just one of many potential regulators. There has been concern among crypto companies that regulators lack a clear understanding of the industry and that their regulatory efforts may stifle innovation and drive activity offshore.

The reference to a “call they made back in April 2021” refers to the SEC’s approval of Coinbase’s application to go public. Armstrong argued that the company’s filings “clearly explained” its asset listing process and “included 57 references to staking.” However, the recent Wells notice suggests that the SEC has reversed its earlier position and is now seeking to take enforcement action against Coinbase.

Coinbase’s chief legal officer, Paul Grewal, also criticized the SEC’s lack of clarity around crypto regulation, claiming that the agency had provided “no clear rule book” and that “efforts to engage with the SEC are met with silence or enforcement actions.” Both Armstrong and Grewal appear to welcome the chance to use the “legal process” to provide the crypto industry with regulatory clarity and to defend Coinbase against the SEC’s enforcement action.

The news of the Wells notice has been widely condemned by the crypto community, with many agreeing that the SEC has reversed its earlier position regarding Coinbase. The community also seems to be throwing their support behind Coinbase, believing that the company will be fighting on behalf of the entire U.S. crypto industry as an unclear regulatory environment drives activity offshore.

In conclusion, the recent Wells notice issued to Coinbase by the SEC has sparked a debate around the lack of clarity and understanding among regulators when it comes to crypto regulation. Coinbase’s CEO and chief legal officer have criticized the SEC’s lack of clarity and seem to be welcoming the chance to use the legal process to provide the industry with regulatory clarity. The crypto community has widely condemned the notice, with many agreeing that the SEC has reversed its earlier position regarding Coinbase.

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Fidelity Says What We’ve Been Thinking: Countries & Central Banks Will Buy BTC

by NEWSBTC

Surprising the world, Fidelity predicts what Bitcoin’s game theory implies. It’s as Satoshi Nakamoto said, “It might make sense just to get some in case it catches on.” That’s the exact same conclusion that Fidelity reaches in its “Research Round-Up: 2021 Trends And Their Potential Future Impact” report. Take into account that Fidelity is a multinational financial services corporation, it doesn’t get more mainstream than this.

What did Fidelity say about Bitcoin adoption at the nation-states and central bank level? 

They put it very clearly:

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“We also think there is very high stakes game theory at play here, whereby if bitcoin adoption increases, the countries that secure some bitcoin today will be better off competitively than their peers. Therefore, even if other countries do not believe in the investment thesis or adoption of bitcoin, they will be forced to acquire some as a form of insurance. In other words, a small cost can be paid today as a hedge compared to a potentially much larger cost years in the future.” 

In other words, It might make sense just to get some in case it catches on. And, as Stacy Herbert said, “First mover advantage goes to El Salvador”. At least if we’re talking out in the open, because other countries might be accumulating Bitcoin on the down-low. For example, Venezuela seized a lot of ASICs from private miners. Chances are those are active in a warehouse somewhere. And, of course, there are rumors that the USA is already mining.

In any case, what does Fidelity conclude?

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“We therefore wouldn’t be surprised to see other sovereign nation states acquire bitcoin in 2022 and perhaps even see a central bank make an acquisition.”

If those players do it in the open, it will probably trigger a race like no other. A race in which it will be too risky not to participate. 

Speaking About Bitcoin Mining…

Fidelity’s report summarized 2021, it goes through most of the major stories that NewsBTC has covered ad nauseam. The company doesn’t try to figure out why did China ban Bitcoin mining, but it highlights how fast the hashrate recovered. 

“The recovery in hash rate this year was truly astounding and one that we think demonstrates several issues that will be important to keep in mind for 2022 and beyond.”

The Fidelity report also highlighted how well the network responded. “This has now been tested and bitcoin’s network performed perfectly.”

BTCUSD price chart for 01/17/2021 - TradingView

BTC price chart for 01/17/2022 on Eightcap | Source: BTC/USD on TradingView.com

What Does Fidelity Say About The Ecosystem In General?

The report wasn’t exclusively about Bitcoin, they also identified the biggest trends in the wide crypto sphere.

“The biggest non-Bitcoin themes put on display this past year included the massive issuance of stablecoins, the maturation of decentralized finance, and the early days of non-fungible tokens.”

And about those trends, Fidelity predicted:


  • “The growth in interconnectivity between siloed blockchains”


  • “Traditional fintech companies partnering or building capabilities to interact with DeFi protocols”


  • “The dawn of decentralized algorithmic stablecoins has officially begun.” Responding to the “growth in demand for more regulated, centralized stablecoins.”


  • “While the long-term value of these NFTs is not known, the impact of increased digital property rights for art, music, and content is likely to be meaningful in some form.”

In general, Fidelity thinks that investment in digital assets will keep growing:

“Allocating to digital assets has become far more normalized over the past two years for all investors. The Fidelity Digital Assets 2021 Institutional Investor Survey found that 71% of U.S. and European institutional investors surveyed intend to allocate to digital assets in the future. This number has grown across each individual region of the survey for the past three years, and we expect 2022 to show another year of higher current and future asset allocations to digital assets amongst institutions.” 

However, something has to happen to catalyze widespread institutional adoption. “The key to allowing traditional allocators to continue to pour capital into the digital asset ecosystem revolves around regulatory clarity and accessibility.”

Is 2022 the year of regulatory clarity? What will happen first, institutional adoption of cryptocurrencies or nation-states adoption of Bitcoin? What central bank will earn first-mover advantage? Burning questions for the year ahead.

Featured Image by Damir Spanic on Unsplash  | Charts by TradingView

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