Spot Bitcoin ETF Approval: Is It the Game Changer We’ve Been Waiting For?
Today's Crypto Update Approval of Spot Bitcoin ETF a Significant Step Forward, But Unlikely to Impact US Regulatory Landscape; INX Confirms Customer Data and Funds Secure After Recent Attack; Plus Other News!Spot Bitcoin ETF Approval Unlikely to Impact US Regulatory Environment + More News
Last updated: January 1, 2024 20:35 EST
Get your daily, bite-sized digest of crypto and blockchain-related news – investigating the stories flying under the radar of today’s news.
In this edition: – Spot Bitcoin ETF Approval is Unlikely to Change Regulatory Environment in the US – INX Says Customer Data and Funds Are Secure After Recent Attack – Bybit Web3 Partners with Manta Network – Core Scientific Still Expects to Emerge from Chapter 11 by End of January, Despite Rescheduled Hearing
Spot Bitcoin ETF Approval is Unlikely to Change Regulatory Environment in the US
The approval of spot bitcoin (BTC) exchange-traded fund (ETF) will be a key step forward, say Steve Scott and AJ Nary of digital asset custody firm BitGo, but it’s unlikely that the bigger regulatory picture will be resolved any time soon in the US.
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As published in the American Banker, BTC is the only digital asset considered a commodity at this time, so “a spot bitcoin ETF won’t likely pave a quick path to, say, an ETF basket of crypto assets.”
Nonetheless, it will allow advisors and investors to transition into the new asset class via ETFs as a familiar vehicle, said Scott and Nary.
They argued that,
“The approval of a spot bitcoin [ETF] is almost certainly a matter of “when” rather than “if.” Yet, bitcoin ETF approvals likely won’t come as soon as many people in the crypto industry would like to believe.”
The two opined that we are likely to see another round of application rejections given the continued lack of clear market structure that led to the downfall of the crypto exchange FTX.
“In other words, the lack of separation of custody and trading will continue to serve as a stumbling block for approval until it is fully addressed.”
Therefore, ETF applicants will likely need to show to the US Securities and Exchange Commission (SEC) that their assets will be custodied with one provider, ideally a qualified custodian, and traded using a different entity.
Whichever asset management company gets the first approval, a group of investment companies’ applications that satisfy the above-stated requirement could be approved in rapid succession or even all at once.
“Predicting how quickly this will occur is a purely speculatory exercise,” Nary and Scott wrote.
INX Says Customer Data and Funds Are Secure After Recent Attack
Security token and digital asset trading platform INX Digital Company said that on December 20, 2023, it learned of a cyberattack on the computer systems of a third-party vendor providing services to one of the company’s subsidiaries.
According to the press release, a malicious actor accessed the vendor’s servers and executed unauthorized trades, leading to a $1.6 million loss for the subsidiary.
INX stated that,
“The customers were not affected by the incident, and the security breach at the third-party provider did not have any impact on the platforms and servers of INX.”
No customer personal information or other data was compromised, and INX.One remains fully operational.
The company “took immediate actions to remediate the security vulnerability and to investigate the nature and scope of the incident.”
It also notified law enforcement and placed additional security measures in place.
Bybit Web3 Partners with Manta Network
Crypto exchange Bybit partnered with Manta Network, a privacy-preserving protocol using zero-knowledge (ZK) application ecosystems.
The Bybit Wallet now supports Manta, providing a seamless experience for over 800,000 users utilizing the Web3 Wallet, said the press release.
“This integration not only expands the functionality of the Bybit Wallet but also brings the advantages of Manta Network’s ZK technology to a broader user base,” it added.
Core Scientific Still Expects to Emerge from Chapter 11 by End of January, Despite Rescheduled Hearing
Crypto miner Core Scientific announced filing an amended plan of reorganization and extension of the subscription deadline for its Equity Rights Offering to January 5, 2024.
The Company previously announced a global settlement with all key stakeholders. While subject to further finalization, the Plan reflects the Global Settlement and represents another step towards confirmation and exit from Chapter 11, it said.
The Bankruptcy Court also approved the company’s motion requesting to modify certain dates and deadlines with respect to the plan, including an extension of the deadlines to vote on the plan or file an objection to it.
The Court has agreed to reschedule the combined hearing to consider the final approval of the Disclosure Statement and confirmation of the Plan to January 16, 2024 (the “Combined Hearing”).
The company still expects to emerge from Chapter 11 in mid-to-late January 2024.
As a result of rescheduling the Combined Hearing, the deadline for participating in the Equity Rights Offering has been extended to Friday, January 5, 2024.
🌐 Additional Information and Insights
Q: Will the approval of a spot bitcoin ETF significantly impact the regulatory environment in the US?
A: While the approval of a spot bitcoin ETF is indeed a significant step forward, it is unlikely to bring about immediate changes in the broader regulatory landscape. BTC is currently the only digital asset considered a commodity, so a spot bitcoin ETF may not pave the way for an ETF basket of crypto assets. However, it will provide advisors and investors with a familiar vehicle to transition into the new asset class. The crypto industry should anticipate continued rejections until the issue of clear market structure, particularly the separation of custody and trading, is adequately addressed.
Q: How did a cyberattack affect INX and its customers?
A: INX discovered a cyberattack on December 20, 2023, targeting a third-party vendor’s computer systems, which resulted in unauthorized trades and a $1.6 million loss for one of its subsidiaries. Fortunately, the incident did not impact INX’s customers, and their personal information and funds remain secure. INX promptly responded by remediating the security vulnerability, investigating the nature and extent of the attack, notifying law enforcement, and implementing additional security measures.
Q: What are the benefits of Bybit’s partnership with Manta Network?
A: Bybit’s collaboration with Manta Network brings several advantages to the table. Bybit Wallet users, who amount to over 800,000 individuals, can now enjoy a seamless experience with the integration of Manta’s privacy-preserving protocol. This partnership not only expands the functionality of Bybit Wallet but also allows a broader user base to leverage the advantages of Manta Network’s zero-knowledge (ZK) technology.
Q: What is the current status of Core Scientific in its Chapter 11 proceedings?
A: While Core Scientific is undergoing Chapter 11 proceedings, the company still expects to emerge from this phase by the end of January 2024. By filing an amended plan of reorganization and extending the subscription deadline for its Equity Rights Offering to January 5, 2024, Core Scientific aims to solidify its global settlement with key stakeholders. The rescheduled hearing, set for January 16, will determine the final approval of the Disclosure Statement and confirmation of the Plan.
References:
- Bitcoin Spot ETF Unlikely to Change Regulatory Environment
- INX Cyberattack: Customer Data and Funds Secure
- Bybit Partners with Manta Network
- Core Scientific’s Path to Emerge from Chapter 11
- SEC’s Latest on Bitcoin ETF Countdown
- Bitcoin ETFs Show Promise in the US
- The Importance of Custody and Trading Separation
- Zero-Knowledge Technology Explained
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