Crypto Exchange Backed by Citadel Securities, Fidelity, Schwab Starts Operations
wsj.com
wsj.com
over a decade of this cycle with nothing fundamentally different about why this time would be different in a negative way
The gold standard was dropped for good reasons. It couldn't expand at the GDP growth rates and storage/transport fees were significant. Gold backed fiat solved the latter, but not the former.
The problem is that even smaller quantities of $100M or $100k would have larger relative overheads. Once you're down to $1000 or toz size quantities where security is less of an issue, the testing and weighing costs become significant.
Meanwhile Brazil (22B), India (122B) and China (380B) run multi-billion dollar trade surpluses with the U.S.
Only theoretically. The USD is the cleanest shirt in a pile of dirty laundry. Neither the euro nor any of the BRICS currencies are getting any cleaner.
I cannot comment but that's the theory.
Just a thought.
When it came to their actual court filings, when it's time to put your money where your mouth is, they ... didn't really say much about a lack of guidance:
> We disagree that the majority of digital assets are securities. For those digital assets that are securities, registration under the current rules is, for many market participants, either not possible or not economically viable given the associated and unnecessary compliance burdens
i.e. "it's too much work, and/or not profitable for us".
The SEC isn't obligated to make securities/commodities trading profitable for exchanges.
The SEC said that most cryptocurrencies are securities. That's their guidance, and explains what they need to do - register as a securities exchange.
They just don't like that answer and want a different one that suits them better.
Get a new excuse already and stop blaming other people for how shit crypto is.
While breaking the law.
Which of the assets listed were not reviewed and approved by *every* state in which said exchanges operate?
If there is no contract for future performance, can there be a securities contract?
Is this correct?: If there is no written contract, the state and defendants may refer to Statute of Frauds. (If there is no written contract for future performance valued at greater than like $500, defendant can motion to dismiss due to Statute of Frauds?).
Do the States and the SEC have any statuory duty to provide `def is_a_security(asset) -> bool` service; wherein securities are assessed according to the Howey Test and other case law pertaining to what constitutes a securities contract? Or only after 40+ states (n exchanges per asset per state) have reviewed each asset for list?
The initial registration form is Form S-1. One of the things you disclose in Form S-1 is the risks your firm faces that may affect its valuation.
Coinbase disclosed the following risks in their Form S-1 SEC filing [0]:
> We are subject to an extensive and highly-evolving regulatory landscape and any adverse changes to, or our failure to comply with, any laws and regulations could adversely affect our brand, reputation, business, operating results, and financial condition.
> A particular crypto asset’s status as a “security” in any relevant jurisdiction is subject to a high degree of uncertainty and if we are unable to properly characterize a crypto asset, we may be subject to regulatory scrutiny, investigations, fines, and other penalties, and our business, operating results, and financial condition may be adversely affected.
> As we continue to expand and localize our international activities, our obligations to comply with the laws, rules, regulations, and policies of a variety of jurisdictions will increase and we may be subject to investigations and enforcement actions by regulators and governmental authorities.
Coinbase was acutely aware of the risk that their business may not exactly be legal, they disclosed it in their initial SEC filing. It’s not the SEC’s job to tell Coinbase that what they’re doing might not be legal, it’s up to Coinbase to hire lawyers to advise them.
[0] https://www.sec.gov/Archives/edgar/data/1679788/000162828021...
Which the SEC allowed, despite Coinbase back then already allowing to trade what the SEC now considers securities. A weird thing.
> ... and is now probably tied up in everything
BlackRock (10 trillion assets under management) is launching a Bitcoin ETF. With the Bitcoin backing the ETF to be held in custody at Coinbase.
That's a big one I think.
Many institutions want to trade crypto but don't want or can't use the crypto financial system without a lot of effort. If they can buy coins and use the same (trusted, separated, and audited) exchange, clearing, and custodian systems they use for other trades then crypto trades can be added with little compliance effort.
If retail traders can buy and sell bitcoin using their existing retail broker they'll do so rather than open accounts on a crypto exchange.
A USD tethered coin offered by a major institution that used this would likely kill tether etc.
I would love for Tether to die, personally. So many lies and violations have surrounded them from Day 1.
Not affiliated with Bitfinex.
Misrepresenting attestations as audits. Stating that they had audits but since they were in Mandarin, they wouldn't be released.
Murky banking connections.
Statements from their bank that implies that the bank is heavily in bed with them ("we can see the flows and orders coming into them...")
and on, and on, and on.
Would not shed a tear.
Weirdly enough under a FOIA request it came to light that tether provided documents proving (unless they gave false documents to the state of NY) they had 40.6 billion out of the 40.8 billion of tether printed back somewhere in 2021. Including the names of all the (big name) banks where they had gold/ETF/commercial papers/treasuries etc. in custody.
They're definitely more than shady. If they've got the USD backing the tether they say they have, it's probable it all started by printing their way into solvency, creating USDT out of thin air.
But it's also possible a big percentage of the USDT circulating are actually backed by real things. Which came as a surprise to me.
I mean either that or they sent fake documents to the NYAG. But I doubt it because I take it these big name banks have been contacted by US authorities that, I take it, verified the numbers tether gave them?
So, thanks to a FOIA request, it looks like tethers/USDTs were at least up to 2021, backed nearly 1:1.
Now they pulled 40 more billion, doubling that amount, since then, out of some hat. Real or not: I sure have no idea.
Is this still true?
This exists and it is called the US dollar.
Do any banks want to hold 100% reserve accounts? What do they get out of it?
Very few narrow banking offerings available worldwide today.
I looked at the laws and there is genuinely no way to earn money except from the difference between the interest payments you get on the custodial accounts (at a normal bank). The only exception is if the contract contains an explicit duration. Then you are allowed to charge a "reasonable" fee for trade ins to Euro. E-Money is not allowed to pay interest. It is basically irrelevant unless you want to do a radically different form of banking.
The SEC is bought and paid for, I wouldn't trust the SEC to protect me from anything.
I'll take off my tinfoil hat now. Everyone have a nice day. I'm not a financial advisor and I'm not shilling anything for coinbase
""" EDX Markets, a non-custodial cryptocurrency exchange backed by Citadel Securities, Fidelity Investments, and Charles Schwab, is live as of today, June 20.
EDX differentiates itself from traditional crypto exchanges by not directly catering to retail investors as it focuses on institutional traders. Additionally, trading access is via API and does not offer a front-end or trading graphical user interface.
WSJ reported that it relies on retail brokerages to route investors’ transaction orders for cryptocurrencies to its marketplace.
EDX Chief Executive Jamil Nazarali reportedly said FTX’s failure had heightened demand for crypto exchanges that do not possess the inherent conflict of interest associated with storing customer funds. """
EDX CEO's comment on FTX is pretty funny; so customer don't want a fraudulent system, makes sense...
So, any institutional investors out there who would care to comment on the interest level on this? What's the goal? Surely, Wall St. loves an opportunity to make money...
> Over 70% of the market is either Bitcoin, Ether, Litecoin, or Bitcoin Cash. Why did I name those 4? They're not securities.
- Gary Gensler
> One major difference: EDX is a “noncustodial” exchange, meaning it doesn’t directly handle its customers’ digital assets. Instead, EDX runs a marketplace where firms agree to execute trades of coins and dollars, using its platform to agree on prices. Then the firms move crypto and cash between each other to settle the trades. Later this year, EDX plans to launch a clearinghouse to facilitate the process of settling trades, but even then it plans to use third-party banks and a crypto custodian to hold customer assets.
> In contrast, crypto exchanges typically require their customers to park their digital coins in wallets run by the exchange, creating the risk that the exchange could lose the funds or be tempted to misuse them.
I guess that's part of the FUD strategy