bitcoinist.com

A recent report by OpenSecrets.org revealed that cryptocurrency industry Super Political Action Committees (PACs) have accumulated a staggering $102 million war chest to exert their influence on the upcoming 2024 US congressional elections. 

The data, compiled by Public Citizen, highlights the sector’s concerted efforts to sway elections in favor of pro-crypto candidates and impede regulatory measures to ensure compliance within the industry.

Crypto Billionaires Lead Funding Surge

Rick Claypool, a research director for Public Citizen and author of the report, emphasized that a fresh wave of crypto corporations, executives, and their allies have returned to the political landscape, pouring millions of dollars into campaigns. 

Their objectives reportedly include influencing elections, supporting cryptocurrency-friendly candidates, and obstructing accountability measures to enforce industry regulations.

The report further discloses that over half of the funds raised originate from direct corporate expenditures, primarily attributed to Coinbase and Ripple Labs.

The remaining contributions come from billionaire crypto executives and venture capitalists, including significant sums from the founders of venture capital firm Andreessen Horowitz, the Winklevoss twins, and Coinbase CEO Brian Armstrong.

Of the eight corporate Super PAC donors, four have either settled or faced charges by the US Securities and Exchange Commission (SEC) for alleged violations of securities laws. 

According to the report, the largest crypto Super PAC, Fairshake Political Action Committee, has resorted to running political ads that deliberately avoid any mention of cryptocurrencies, employing a “manipulative strategy” to sway voters.

The report also highlights the intervention of crypto Super PACs in primary races for the 2024 elections. Out of the six completed primaries, only one crypto-backed candidate suffered defeat. 

However, eleven primary races involving crypto-backed candidates are still ongoing. Moreover, the crypto Super PACs have pledged to allocate funds to Senate races in Ohio and Montana, two crucial battleground states in the general election.

Voters In ‘Swing States’ Demand Reasonable Regulations

A separate study conducted by Digitial Currency Group (DCG), a global investor in blockchain companies, found that more than 20% of registered voters in key “swing states,” or states where support for political parties is divided, consider digital assets an important issue in the 2024 election. 

The survey, conducted in partnership with The Harris Poll and encompassing Michigan, Ohio, Montana, Pennsylvania, Nevada, and Arizona, reveals that a pro-crypto stance can be “advantageous” for policymakers and candidates. It emphasizes the desire among voters for “reasonable regulations” that protect consumers without stifling innovation.

Julie Stitzel, Senior Vice President of Policy at DCG, highlighted the poll’s findings, stating that the digital asset industry is at the forefront of swing state voters’ minds and that a positive stance on virtual assets can benefit policymakers and candidates. 

Kristin Smith, CEO of the Blockchain Association, echoed this sentiment, emphasizing the growing relevance of digital assets in shaping the electoral landscape in 2024.

Featured image from Shutterstock, chart from TradingView.com 

While Bitcoin continues to trade within the $60,000 to $70,000 range, a new wave of optimism is emerging from on-chain analysis. Willy Woo, an on-chain analyst, took to X on May 7 to point out an exciting development: high-net-worth BTC holders have been rapidly accumulating the coin. 

High Net-worth Whales Accumulating

In a chart, the analyst noted that whales, entities holding between 100 and 1,000 BTC, have been gobbling up BTC over the past two months. Their involvement, Woo says, has been the “strongest buying spree” by such whales in recent history. 

However, while there is excitement, some argue that this cohort’s sharp spike in BTC accrual could be due to spot Bitcoin exchange-traded fund (ETF) issuers. Since the United States Securities and Exchange Commission (SEC) approved the first spot ETFs in January, these issuers, including Fidelity, Bitwise, and ProShares, now control over 850,000 BTC.

Even so, Woo counters this argument, emphasizing that this uptick is not due to the involvement of these Wall Street players. The analyst explained that, based on available data, these entities are “distinct” and have been picked out through forensic clustering techniques. 

Moreover, Woo observes that publicly available spot ETF flow data reveals a discrepancy. For instance, while these whales have been purchasing BTC over the two months, amassing over 220,000 BTC according to network activity, spot ETF flows have been declining, only scooping up roughly 165,000 BTC during this period.

This deviation suggests that investors, including institutions, gaining BTC exposure via spot ETFs cannot account for the entire whale activity. 

Bitcoin Buying Pressure Sustained, Will Bulls Break $73,800?

 

Additionally, Woo clarifies that the accumulation over the past two months wasn’t a single, massive purchase. Instead, the analyst explains, a clear pattern of sustained buying is observed over 30 days within two months. This makes it evident that their approach was deliberate, and they were eager to strategically accumulate when prices were depressed. 

That whales are involved and actively buying, based on on-chain activity, is bullish. The coin has moved horizontally over the past two months since BTC prices peaked at $73,800.

Early this month, Bitcoin prices plunged to as low as $56,500 before recovering steadily over the weekend. For the uptrend to remain, there must be a conclusive close above $70,000 and, ideally, $73,800. Analysts predict an eventual spike to $100,000.

As the US Securities and Exchange Commission (SEC) continues to scrutinize crypto industry players, including Robinhood, Binance, Coinbase, and Ripple, the Chair of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, warns of an impending surge in enforcement actions. 

Crypto Faces Inevitable Wave Of Enforcement Actions

At the Milken Institute’s 27th annual Global Conference, Behnam emphasized the lack of regulatory framework and transparency within the growing crypto industry, which he believes will inevitably lead to more fraud and manipulation cases.

Behnam anticipates a “cycle of enforcement actions” within the next six months to two years, driven by the rapid appreciation of digital assets and heightened interest from retail investors. 

As a regulator, Behnam expresses concerns about the absence of clear rules and tools typically employed by regulators to maintain market integrity. Without proper regulations in place, Behnam argues that fraud and manipulation will persist.

The recent issuance of a Wells Notice by the SEC against Robinhood further highlights the regulatory pressure faced by industry players. 

Dan Gallagher, Chief Legal, Compliance, and Corporate Affairs Officer at Robinhood, expressed disappointment in the SEC’s decision, asserting that the assets listed on their platform are not securities. Gallagher remains confident in Robinhood’s position and its commitment to regulatory compliance.

SEC Commissioner Hester Peirce, on the other hand, is known for her pro-crypto stance. She has previously criticized the lack of clear rules and the SEC’s skeptical approach towards cryptocurrencies. Peirce advocates for improved and updated regulatory frameworks that allow the industry to thrive and encourage innovation.

CFTC And SEC Lock Horns 

During his remarks, Behnam further emphasized that without action from Congress and increased regulatory transparency, enforcement agencies are likely to resort to lawsuits. 

The CFTC Chair acknowledges the challenges of getting legislation passed but notes the momentum and desire from lawmakers to close regulatory gaps, particularly in stablecoin legislation.

The ongoing interagency conflict between the CFTC and the SEC regarding classifying major cryptocurrencies further complicates regulatory matters. 

The CFTC recognizes cryptocurrencies like Bitcoin, Ethereum, and Litecoin as commodities, while the SEC’s current stance, led by Chair Gary Gensler, limits the commodity classification solely to Bitcoin. 

This discrepancy has sparked debates within the industry, with legal experts suggesting that the CFTC’s position challenges the SEC’s authority.

The need for comprehensive regulatory frameworks becomes increasingly apparent as the crypto industry continues to evolve and gain mainstream attention. 

The outcome of ongoing enforcement actions and regulatory developments will significantly shape the industry’s future, impacting market participants and investors.

Featured image from Shutterstock, chart from TradingView.com

Major cryptocurrencies have exhibited an interesting price dynamic in the past few days. According to data from Coinmarketcap, the majority of cryptocurrencies, including Dogecoin, have posted losses in the past 24 hours. On the other hand, some of these cryptocurrencies are still on a price increase when looking at a larger timeframe and many more addresses have crossed into the profitability zone in the past seven days. 

Dogecoin, for instance, is still up by 9% in a 7-day timeframe. As a result, the number of DOGE addresses in profitability has now been pushed to 83%, with 163,000 more addresses waiting to be pushed into profit if DOGE crosses over $0.1657.

Holders of Shiba Inu, Dogecoin’s meme counterpart, haven’t been treated to the same effect. At the time of writing, the number of SHIB holders in profitability has largely consolidated around 60%. 

Dogecoin And Shiba Inu Holder Profitability

According to data from IntoTheBlock’s “In/Out of the Money” metric, Dogecoin is still proving itself to be the top meme coin for holders over the long run. The majority of Dogecoin holders are still in profitability, despite the wider lackluster movement of most cryptocurrencies. Particularly, the number of Dogecoin holders in profit now stands at 83%, its highest level in weeks. 

At the time of writing, this metric shows that 5.23 million DOGE addresses are still in profit, representing 83.03% of the total addresses. This is in comparison to 826,350 addresses currently in loss, which represent 13.12% of the total addresses. Interestingly, 242,710 addresses, representing 3.85% of total addresses, are currently “in the money,” meaning they are neither in profit nor loss.

Shiba Inu, on the other hand, has not really seen a growth in the profitability of its holders. In terms of price action, both cryptocurrencies have increased from their price point in the beginning of the month. DOGE is up by 29%, while SHIB is up by 13.79%. However, on-chain data shows a varying level of profitability for traders. 

Holder profitability for SHIB is currently at 60%, with the 810,230 addresses in this cohort. Around 487,970 addresses are currently in loss, which represents 36.18% of the total addresses. Lastly, 50,590 addresses, representing 3.75% of total addresses, are “in the money.”

Profitability around the current price also shows that only 41.38% of Shiba Inu addresses that bought between $0.000020 and $0.000027 are making a profit. In contrast, more Dogecoin addresses (55.84%) are in profit around the current price level of $0.132243 and $0.179879.

Can SHIB Catch Up In Holder Profitability?

Shiba Inu has a long way to go before it reaches Dogecoin’s level of profitability for holders. An interesting fact about Shiba Inu is that it is deflationary by design, unlike Dogecoin, which has an unlimited supply. This means over time, the total number of Shiba Inu coins will decrease, making the remaining ones scarcer and potentially more valuable. This could lead to a stable price increase over the years and more investors moving into profitability. 

At the time of writing, DOGE is trading at $0.1588 while SHIB is trading at $0.00002403.

As the political temperature in the United States heats up ahead of upcoming elections, cryptocurrency is emerging as a significant topic among voters in key battleground states.

An extensive online survey spearheaded by the Digital Currency Group (DCG) has highlighted the growing importance of digital currency policies in the electoral dialogue, particularly in states known for their pivotal role in election outcomes.

Voter Sentiment On Crypto: A New Electoral Battleground

The influence of digital currency in shaping political landscapes is increasingly apparent, as evidenced by the recent survey conducted by The Harris Poll for DCG. From April 4-16, this poll involved 1,201 registered voters across Michigan, Ohio, Montana, Pennsylvania, Nevada, and Arizona.

Results indicate that a significant portion of the electorate is tuning into candidates’ positions on crypto, with half of the respondents affirming that a candidate’s stance on digital currency influences their voting decision.

Ohio presents a contrasting scenario, with voters exhibiting considerable skepticism towards cryptocurrency. This divergence in voter sentiment underscores the complex perceptions surrounding digital currency across different regions.

However, amidst the heightened interest, there is a strong call from about 20% to 25% of voters for elected officials to prioritize the regulation of cryptocurrencies and enhance investor protections.

This demand is even more pronounced among crypto-positive voters, approximately one-third of whom advocate for focused regulatory efforts.

Furthermore, the survey reveals that about 14% of voters currently own digital currency, while 12% have engaged with it in the past. Ownership rates peak in Montana.

These statistics reflect the penetration of crypto into Americans’ everyday financial dealings and highlight the potential electoral impact of digital currency policies.

Political Figures And Crypto Policies

Amidst the backdrop of the interplay between elections and digital currency, not all political figures are supporters. Senator Elizabeth Warren, a key Democratic figure in the US, focused her re-election campaign last year on forming what she termed an “anti-crypto army.”

Warren’s legislative efforts peaked with introducing the Digital Asset Anti-Money Laundering Act of 2022 in December, which faced opposition from both parties.

Warren committed to reintroducing the bill, aiming to safeguard vulnerable populations from the risks associated with digital assets.

Her strategy includes implementing comprehensive anti-money laundering regulations across decentralized finance (DeFi) platforms and private wallets, alongside proposing a ban on digital currency mixers.

Coin Center, a prominent non-profit advocating for digital currency policy, has harshly criticized this legislative move. The organization described the act as “an opportunistic, unconstitutional assault on self-custody, developers, and node operators.” according to Jerry Brito, the executive director of Coin Center.

He characterized the bill as the most “severe threat” to the personal freedoms of those in the crypto community.

Amid these tensions, Ripple CEO Brad Garlinghouse has been vocal about the need for unity within the cryptocurrency industry to support pro-crypto candidates in the forthcoming 2024 US presidential election.

Last year, Garlinghouse highlighted the necessity to oppose the current administration’s anti-crypto posture, particularly regarding blockchain technology. He advocates endorsing candidates who favor innovation and sensible regulation to ensure the US does not lag in the global technological arena.

Team @Ripple is putting a stake in the ground, leading the charge with other industry leaders to support pro-innovation and pro-crypto candidates in the 2024 US election cycle. The US cannot afford to continue taking a back seat on the global stage. Regulatory overreach (esp from… https://t.co/hpkqNf7Y99

— Brad Garlinghouse (@bgarlinghouse) December 18, 2023

Featured image from Unsplash, Chart from TradingView

EMURGO, the commercial arm of the Cardano blockchain, has formed a strategic alliance with GSR, a prominent global cryptocurrency trading firm. This partnership aims to bolster the infrastructure of the ecosystem by leveraging GSR’s expertise in market liquidity and financial services.

How The Partnership Will Boost Cardano

EMURGO, established in 2015, plays a critical role in driving the adoption and implementation of the Cardano blockchain. The collaboration with GSR is intended to address several key areas within the network.

First, GSR will bring its extensive experience in market-making to provide deeper liquidity for Cardano’s native token and other Cardano-based digital assets. This move is expected to reduce slippage and improve transaction efficiency on decentralized exchanges operating within the Cardano ecosystem.

The partnership will scout and support burgeoning projects through venture investments within the network, aiming to fuel innovative developments and accelerate commercial applications built on Cardano. By enhancing the interoperability of applications, the collaboration also seeks to simplify user interactions and integrate services across the blockchain, thus broadening user engagement and adoption.

Moreover, both entities are committed to advancing blockchain knowledge through joint educational programs focused on ADA’s technology, which will aim to attract more developers and businesses to the ecosystem.

Ken Kodama, CEO of EMURGO, highlighted the strategic benefits of the alliance, stating, “EMURGO is excited to work with GSR and utilize its established track record as one of the largest market makers in the crypto space to support the growing ecosystem. GSR’s wealth of experience, expertise, and deep resources will enable builders and projects to develop and scale their Web3 products to potential Web3 users while fostering an even more robust Cardano ecosystem moving forward.”

Echoing the sentiment, CJ Fong, Head of EMEA Business Development at GSR, noted, “GSR is thrilled to be working with the EMURGO team as they continue to expand their ecosystem. We look forward to supporting the next phase of growth through unique investment opportunities and education initiatives within the Cardano community.”

This partnership comes at a pivotal time for GSR as well, with its Singapore subsidiary, GSR Markets Pte. Ltd., securing the Digital Payment Token Service license from the Monetary Authority of Singapore (MAS). This is a notable milestone as it marks the first such license granted to a digital asset market maker in the region, potentially setting a precedent for regulatory acceptance of digital asset firms in Singapore and beyond.

Cardano itself is known for its foundation in peer-reviewed research and a scientific development methodology. With a commitment to environmental sustainability and security through its proof-of-stake protocol, the blockchain has successfully processed nearly 90 million transactions. The platform currently supports over 1,350 projects, varying from financial applications to complex decentralized applications (dApps).

At press time, ADA traded at $0.45.

Popular cryptocurrency analyst, Michael van de Poppe has predicted a major bullish breakout for Chainlink (LINK), urging investors to hold on to their cryptocurrencies despite market volatility. 

Analyst Cautions Against Premature Sell-Off

In an X (formerly Twitter) post on Monday, May 5, Poppe shared a LINK/BTC price chart, depicting historical price movements from 2018 to 2025. Based on the technical analysis of the cryptocurrency’s price action across previous market cycles, the crypto analyst noted that Chainlink was presently undergoing a retest at its low point. 

This suggests that the cryptocurrency is experiencing a phase of reassessment and potential stabilization, followed by a possible price rebound. Poppe has disclosed that initiating sell-offs during Chainlink’s current price stage may not be a strategic move, as doing so could result in investors missing out on potential gains when the market rebounds from the temporary weakness. 

Highlighted in the price chart, the analyst disclosed that $0.0004480 was a crucial resistance level for a potentially strong breakout upwards. Additionally, the LINK/BTC ratio could undergo a trend switch at $0.0006721, as it begins to make “higher lows and higher highs.”

In addition to the optimistic outlook, the crypto analyst previously disclosed that Chainlink was getting close to its “bottom,” potentially testing new lows around 2,000 Satoshis (SATs) before surging upwards. He revealed that this phase was a prime buying period, acknowledging in an earlier post that he was already investing in Chainlink. 

At the time of writing, Chainlink is down by 3.54% in the last 24 hours and trading at a price of $14.5%, according to CoinMarketCap. While the present market condition may have contributed to the price decline, the cryptocurrency has remained relatively stable, witnessing a price increase of 6.28% over the past seven days, and a massive 75.15% surge in its 24-hour trading volume. 

Chainlink Becomes Top RWA By Development

Chainlink has ranked number one among the top Real World Assets (RWA) by development activities. According to market intelligence platform Santiment, Chainlink emerged as the leading project in the RWA sector, witnessing activities 2.49 times greater than that of the next most active project, Synthetix (SNX). 

The blockchain platform disclosed that the top list was compiled by GitHub, an online software development platform. The criteria for evaluating the top RWA project in terms of development was based on counting non-redundant GitHub activities and averaging this daily activity over the past 30 days. 

The result of the evaluation revealed Chainlink’s high level of developer engagement and activities, underscoring the ongoing progress and innovative processes within the crypto project.  

On-chain data shows the Bitcoin long-term holders have finally cooled off their profit-taking after showing a wild selloff just earlier.

Bitcoin Coin Days Destroyed Has Calmed Down For BTC Recently

As pointed out by BTC on-chain research account “The Bitcoin Researcher” in a post on X, the Coin Days Destroyed In Profit metric has declined recently. A “coin day” is a quantity that 1 BTC accumulates after staying dormant on the blockchain for 1 day. Thus, when a coin sits still in the same address for a while, it carries some number of coin days.

When a coin like this is finally moved on the network, its coin days count resets back to zero, and the coin days that it had been holding are said to be “destroyed.” The Coin Days Destroyed (CDD) keeps track of the total amount of coin days being destroyed in this manner across the blockchain on any given day. When the value of this indicator spikes, it means that a large number of aged coins are on the move.

These spikes are attributed to the “long-term holders,” investors who normally tend to HODL onto their coins for extended periods. This group holds large coin days, so their moves end up leading to a destruction of a large amount of them.

Large moves from these investors, though, are not that common, as they are by nature HODLers who remain tight despite whatever may be going on in the wider market. When the LTHs do break their dormancy, it’s generally for selling, so spikes in the CDD may correspond to selling pressure arising from this group.

In the context of the current topic, profit-taking from these investors specifically is of interest, so the analyst has cited the CDD data for only the coins that were carrying a profit prior to the move.

Here is the chart for this Bitcoin indicator over the last few years:

As displayed in the above graph, the Bitcoin CDD In Profit had risen to some very high levels earlier as the BTC rally towards the new all-time high had taken place.

This extraordinary spike would suggest that the run had enticed even these diamond hands into harvesting their profits. As the asset’s drawdown post this rally has played out, though, the metric’s value has declined, suggesting a decrease in selling pressure from the LTHs.

The ‘CDD In Profit’ has now come down to relatively low levels, although its value is still higher than during the bear market. Given this trend, it’s possible that the LTH profit-taking may have been exhausted for now, or at least is close to being so.

It now remains to be seen how the Bitcoin price develops from here, as perhaps one of the main obstacles to the rally is now out of the asset’s way.

BTC Price

Bitcoin’s recovery surge has slowed down over the last few days as the asset’s price has continued to consolidate around the $64,000 level.

Commencement speeches are supposed to be inspirational send-offs for graduating students, filled with wisdom and hope for the future. But at Ohio State University’s ceremony this past Sunday, the chosen speaker, Chris Pan, delivered a speech that left many scratching their heads and some downright booing.

Pan, a 1999 graduate and entrepreneur, ignited controversy by admitting on LinkedIn that he wrote the first draft of his speech under the influence of ayahuasca, a powerful psychedelic drug. This revelation was only the beginning of the unusual turn of events.

Bitcoin Takes Center Stage

While many expected Pan to impart conventional wisdom about navigating careers and life after graduation, his speech took a sharp turn towards the world of cryptocurrency. Pan, a self-proclaimed Bitcoin enthusiast, heavily promoted the digital currency as a hedge against inflation, urging graduates to invest.

This endorsement was met with audible boos from the audience, broadcasted live on the university’s livestream.

“Saving isn’t enough anymore,” Pan declared. “Inflation’s out of control, that’s why everything costs more! Bitcoin offers a misunderstood asset class. It’s decentralized and finite, meaning no government can just print more at will.”

University Clarifies Stance On Bitcoin

Ohio State University was quick to distance itself from Pan’s Bitcoin advocacy. A university spokesperson declined to comment on the specific content but made it clear that they don’t approve commencement speeches beforehand.

The university’s official write-up of the ceremony conspicuously omitted any mention of cryptocurrency, focusing instead on Pan’s message of civility and social responsibility.

Psychedelic Inspiration Or Publicity Stunt?

Pan’s use of ayahuasca to craft the speech added another layer of eccentricity to the situation. While some might dismiss it as a publicity stunt, others wondered about the impact of such mind-altering substances on the speech’s content.

Unorthodox Methods, Unconventional Message

Regardless of the inspiration, Pan’s core message about overcoming fear and embracing new mindsets resonated with some. He highlighted common barriers to investing – fear, laziness, and closed-mindedness – urging graduates to break free from these limitations.

Pan’s Diverse Background

Pan’s biography offers a glimpse into his unconventional approach. A self-described “social entrepreneur, musician, and inspirational speaker,” his career path has spanned prestigious firms like McKinsey & Company and PepsiCo, along with stints at Facebook and his current venture, MyIntent, a company that creates custom-message bracelets. This eclectic background might explain his willingness to break the mold with his commencement speech.

Lingering Questions

The fallout from Pan’s speech continues. Whether his use of ayahuasca was a genuine creative outlet or a publicity stunt remains unclear. The university’s attempt to distance itself from the Bitcoin promotion raises questions about the control they have over commencement speeches.

Ultimately, Chris Pan’s unorthodox commencement speech will likely be remembered more for the controversy it sparked than for any pearls of wisdom it offered.

Featured image from Shoshana Gordon/Axios, chart from TradingView

Bitcoin is currently on a recovery path, which tracks to analysts’ prediction that the price decline over the last two days has been more of a bear trap. Crypto analyst Orson Fawley elaborates more on this in his analysis and shows that the BTC price remains inherently bullish given its recent movements.

Bitcoin Recovery Is Strong

Fawley took to the TradingView website to share his analysis on Bitcoin, covering its surge from last weekend through to the price decline on Monday. The crypto analyst pointed out that with the weekend surge that began on Friday, Bitcoin was able to form a wide-ranging bullish D1 candlestick close to its high.

Now, the thing about wide-ranging D1 candlesticks is that they are used to measure buying pressure. Given that this candlestick closed near the Bitcoin high on Friday, Fawley explains that this means that the price was being pushed up due to strong and sustained BTC buying pressure.

Furthermore, the analyst explains that the candlestick had also broken Bitcoin’s previous “Inside Bar pattern”. This pretty much tells the same story as the wide-ranging D1 candlestick closing to close its high, meaning that buying pressure has been sustained for the digital asset.

As a result of this price surge, Bitcoin had been able to break above $60,000, which the crypt analyst identifies to be a major psychological level. Breaking this $60,000 level has been positive for the coin, and this fuels Fawley’s sentiment that the price decline was a false break. In other words, the decline was a bear trap.

For those unfamiliar, bear traps are crashes in price after a period of price recovery that makes investors believe that the price has peaked. This draws in more bears who continue to short the price, thinking it will keep falling, but eventually, the price resumes its upward trajectory. Since the BTC price decline has been identified as a bear trap, it means that the cryptocurrency’s price is expected to continue its climb toward its all-time highs.

BTC Buying Pressure Continues

Fawley also analyzed the Bitcoin price going forward, using the 4-hour chart as the point of focus. In this chart, the crypto analyst confirmed that BTC had formed a V-shaped pattern as a result of the strong buying pressure from the bottom of the dip.

He also points out that the coin had broken above its downward trend line resistance. This comes as the Bitcoin price is forming an accumulation zone around its recent high, which has been around $64,000. According to the analyst, if Bitcoin “ can break above this price high and the PPZ area, Bitcoin H4 will revert to the uptrend structure on the H4 timeframe.”

Presently, the BTC price is still holding above $64,000 after a sharp surge in the early hours of Tuesday. Its daily volume has also risen 45%, lending credence to Fawley’s analysis that buying pressure remains strong. “The false break creating a bear trap on Friday and sustaining through Saturday and Sunday shows Bitcoin D1 is strengthening,” Fawley states.

Pessimism surrounding Spot Ethereum ETFs approval is set to increase as the United States Securities and Exchange Commission (SEC) has opted to delay its decision on the approval process of Invesco Galaxy’s ETH Spot ETF, fueling uncertainty in the crypto market.

SEC Pushes Back Invesco’s Ethereum Spot ETF

In October last year, Invesco Galaxy filed a proposed rule change to list and trade shares of its Ethereum spot ETF, Commodity-Based Trust Shares, with the SEC under the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, which was published in the Federal Register in November.

Invesco Galaxy’s Ethereum Spot ETF aims to reflect the performance of the spot price of Ether, by retaining ETH units with a different custodian. The document indicated that Invesco is the sponsor and Galaxy Digital is the execution agent, which is responsible for selling ETH to cover the Trust’s costs. However, according to a Monday filing, the Commission has decided to postpone its decision on the company’s proposal. 

The SEC declared that additional time is needed to analyze the related concerns and the proposed rule change, stressing the need for more time to fully assess the spot ETF proposal. Thus, the regulatory watchdog has given an additional 60 days to approve or disapprove the proposal.

The filing read:

The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.

Given that the SEC has 240 days overall from the publishing date to make extensions before reaching a final decision to approve or disapprove the application, the agency is expected to issue a final decision on Invesco Galaxy’s Ethereum Spot ETF by July 5, 2024.

Invesco Galaxy is the latest asset management company to see its Spot ETF proposal being delayed by the agency. Other notable companies like Blackrock have also encountered the same fate over time.

Blackrock’s proposed Spot Ethereum ETF was delayed in March, marking the second time the Commission has postponed the firm’s proposal. This repeated delay from the SEC thus far has cast a dark shadow on the exchange products within the crypto community.

ETH Spot ETFs See Pessimism From Top Crypto Figures

Over time, Ethereum Spot ETFs have seen constant negative sentiment from top figures in the crypto space, unlike Bitcoin, which saw unwavering optimism from these figures. Last Month, Tron Founder Justin Sun expressed his disbelief in the products getting approved by the May 31 deadline. “My honest opinion (NFA) is that an Ethereum ETF won’t be approved in May,” he stated.

Sun claims the crypto industry still needs to prepare for a drawn-out education process in order to help authorities and regulators understand cryptocurrency, even though he believes the industry has already reached this stage.

Currently, the likelihood of acceptance of the ETH Spot ETFs now stands at a mere 12%, which is a significant decline from the 76% odds recorded in January following the approval of Bitcoin spot ETFs.

The Spot Bitcoin ETF market is currently experiencing a resurgence, marked by a second consecutive day of positive inflows totaling $217 million. This increase in investment activity is a notable reversal from the previous weeks where inflows inflows stagnated since mid-March.

US Bitcoin ETFs Regain Momentum

Grayscale Bitcoin Trust (GBTC), a pioneer in crypto investment products, once again attracted capital with an inflow of $3.9 million. This positive trend for the second day in a row underlines that the outflows at GBTC may have come to a halt, which could remove significant selling pressure.

BlackRock’s IBIT also saw inflows for the second day in a row after seeing zero net inflows on six of the last seven days and one day of outflows, raising $21.5 million. Fidelity, another heavyweight in the financial sector, outshone others with the strongest inflows, drawing $99.2 million.

Other ETF providers like Bitwise, ARK, Invesco, Franklin, and VanEck also saw positive flows, although less pronounced compared to the leaders. Bitwise added $2.1 million, ARK impressed with $75.6 million, Invesco secured $11.1 million, while both Franklin and VanEck recorded $1.8 million each. This collective uptrend across diverse providers suggests a broad-based recovery in investor sentiment towards spot Bitcoin ETFs.

Yesterday's ETF inflows by @FarsideUK

We had $217 million of inflows and all were positive.

Fidelity had $99 million, Ark $75 million and $GBTC $3.9 million.

Blackrock did $21.5 million.

Price in range of $63k-$65K.

As long as inflows stays positive here the supply is… pic.twitter.com/iKUNFCLLhK

— WhalePanda (@WhalePanda) May 7, 2024

Bloomberg ETF specialist Eric Balchunas commented on the phenomenon, noting the rarity of uniformly positive inflows and the resilience of ETF investors. He said, “First time ever 1D flows all green, no red for the Bitcoin Bunch. Not going to spike the football like some did during the outflow period but will point out that over 95% of the ETF investors HOLD-ed during what was a pretty nasty and persistent downturn. Will same happen next time? Who knows, but track record says it will be pretty high % again. As we said, outflows will happen, so will inflows but over time two things tend to be true for ETFs: net growth and relatively strong hands.”

Adam Blumberg, the co-founder of Interaxis, commented on the mature behavior of ETF investors, emphasizing their long-term perspective and resilience to volatility. “ETF investors aren’t trading. They’re not degens. They expect the volatility, and in for the long term benefit. When they’re investing 1-5%, the short term downturns also have a minimal effect on overall portfolio,” he explained.

Adding to the optimism, a recent 13F filing revealed that Hightower, a $130 billion asset manager, purchased $68 million worth of spot Bitcoin ETFs. The diverse set of investments from Hightower in Bitcoin ETFs such as Grayscale, Fidelity, BlackRock, ARK, Bitwise, and Franklin Templeton illustrates a significant endorsement of Bitcoin from traditional financial institutions.

HighTower 13F today discloses the following positions:

Grayscale BTC: $44,838,000 (709,956 shares)Fidelity Bitcoin ETF: $12,410,000 (200,084 shares)BlackRock Bitcoin ETF: $7,621,000 (188,397 shares)ARK Bitcoin ETF: $1,702,000 (23,964 shares)Bitwise Bitcoin ETF: $988,000…

— MacroScope (@MacroScope17) May 6, 2024

Hunter Horsley, CEO of Bitwise, reacted to the news of Hightower’s investment, indicating a positive outlook for the future interaction between traditional finance and Bitcoin. “Hightower is one of the largest RIA firms in the country, and highly admired. 2024 is going to have more & more stories of Bitcoin embraced by large traditional firms,” he remarked.

At press time, BTC traded at $64,273.

Bitcoin mining company Marathon Digital (MARA) is basking in the glow of a successful week, with its stock price surging after inclusion in the prestigious S&P SmallCap 600 index and the announcement of a performance-based executive bonus plan. However, the company’s fortunes remain tethered to the ever-volatile Bitcoin price.

S&P Inclusion Boosts Visibility And Investor Confidence

The inclusion in the S&P SmallCap 600 index marks a significant milestone for Marathon Digital. This widely tracked index exposes the company to a broader pool of investors who base their investment decisions on index holdings.

The news triggered an 18% jump in Marathon Digital’s stock price, reaching $20.67 per share, according to Yahoo Finance data. This surge reflects investor confidence in the increased visibility and potential for more significant investments.

Being added to the S&P SmallCap 600 is a validation of Marathon Digital’s position as a leading player in the cryptocurrency mining industry. This inclusion will enhance the company’s standing and attract a new wave of investors seeking exposure to the Bitcoin mining space.

Executive Bonus Plan Aligns Interests With Shareholders

Adding to the positive momentum, Marathon Digital unveiled a new executive bonus plan directly linked to the company’s stock price performance. This strategic move aligns the interests of top executives, including CEO Fred Thiel, CFO Salman Khan, and General Counsel Zabi Nowaid, with those of shareholders.

Bonuses of up to nearly $33 million can only be awarded if the stock price performs well, incentivizing executives to make decisions that drive shareholder value.

The executive bonus plan demonstrates the management team’s confidence in Marathon Digital’s future growth trajectory. Tying bonuses to stock price performance ensures that executives are focused on strategies that will benefit shareholders in the long run.

Bitcoin Price Volatility: A Double-Edged Sword

While the S&P inclusion and bonus plan are positive developments, Marathon’s fortunes remain intricately tied to the price of Bitcoin. The article mentions Bitcoin hovering around $63,200, with increased trading volume but a bearish trend over the past 24 hours. This volatility presents a double-edged sword for Marathon Digital.

A sustained rise in Bitcoin price would significantly benefit the company, as its mining operations become more profitable. However, a prolonged slump could put a damper on Marathon Digital’s growth prospects. Investors considering Marathon Digital as an investment should carefully consider their risk tolerance regarding Bitcoin’s price fluctuations.

Looking Ahead: Marathon Digital Charts A Growth Path

Despite the inherent risks associated with Bitcoin price swings, Marathon’s recent developments paint a promising picture for the company’s future. The S&P inclusion broadens its investor base, and the executive bonus plan incentivizes leadership to focus on shareholder value creation.

As the cryptocurrency mining industry continues to evolve, Marathon Digital is well-positioned to capitalize on growth opportunities, provided it can navigate the unpredictable tides of the Bitcoin market.

Featured image from Marathon Digital/X, chart from TradingView

In the latest from the XRP lawsuit between Ripple and the US Securities and Exchange Commission (SEC), the agency has filed its remedies reply brief under seal, signaling a significant advance in the case’s remedies phase. This stage focuses on determining the potential sanctions that the fintech company might face if the SEC is successful in proving its allegations that Ripple conducted unauthorized securities transactions involving its XRP cryptocurrency.

Ripple Vs. SEC: Detailed Timeline And Upcoming Events

James K. Filan, a former defense lawyer closely monitoring the case, updated the XRP community via X (formerly Twitter), stating, “The SEC has filed, under seal, its remedies reply brief & supporting exhibits. These documents are not yet public. Public, redacted versions will be filed by Wednesday, May 8, 2024. Other sealing-related filings will follow.”

This filing is a crucial procedural step in the ongoing litigation, initiating a series of legal maneuvers centered around the confidentiality and disclosure of sensitive materials. Following yesterday’s sealed filing, Ripple and the SEC will meet today, May 7, to discuss and determine the necessary redactions to the reply brief and related documents, involving both parties and any third parties. This session aims to determine what information remains under seal and what will be made accessible to the public.

Tomorrow, on May 8, the SEC is scheduled to release a public, redacted version of the reply brief along with any supporting exhibits not designated as Confidential or Highly Confidential under the current Protective Order. This release will only include those provisional redactions requested during the May 7 meet and confer.

Further sealing motions are planned for May 13, where all involved parties and third parties will file omnibus letter-motions to seal all materials related to the remedies-related briefing. This includes briefs, declarations, and supporting exhibits, followed by the submission of proposed redactions to these materials.

On May 20, oppositions to the May 13 sealing motions are due. The process stipulates that parties are also required to file public, redacted versions of all documents within 14 days following the court’s decisions on the omnibus sealing motions.

Financial Stakes And Ripple’s Defense

The stakes are notably high, with the SEC seeking fines and penalties totaling around $2 billion. Ripple’s counter-proposal suggests a maximum penalty of just $10 million. The fintech firm argues against the SEC’s proposed injunction, maintaining that it has instituted significant changes to avert future infractions.

Ripple’s opposition to the SEC’s demand for disgorgement is based on the claim that the regulator has not substantiated that Ripple’s activities caused monetary losses to institutional investors. Regarding civil penalties, Ripple calls for a substantial reduction, arguing that the SEC’s demands are disproportionate compared to penalties imposed in similar cases.

Currently, a critical battle is unfolding over the testimony of expert witness Andrea Fox. Ripple disputes the SEC’s characterization of Fox’s expert declaration. Ripple’s objection suggests that the SEC’s categorization of the testimony is flawed.

Jeremy Hogan, a legal expert from the XRP community, commented recently on the matter via X, saying, “I think the SEC will win this motion.” He noted that, based on past case outcomes, the court is likely to recognize Fox as an expert, thus permitting Ripple to depose her rather than striking her testimony from the record.

At press time, XRP traded at $0.53761.

Grayscale Bitcoin Trust (GBTC), the world’s largest cryptocurrency investment vehicle, has experienced a notable influx of investor funds for the first time since the January approval of US spot Bitcoin exchange-traded funds (ETFs). 

Grayscale Bitcoin Trust Bounces Back With Inflows

Data compiled by Bloomberg reveals that on May 3, Grayscale’s Bitcoin Trust received approximately $63 million in net inflows. This comes after net outflows totaling around $17.4 billion since the trust’s conversion. 

The outflows experienced in the past were partially linked to bankruptcies in the crypto industry, as defunct companies sought to repay their creditors by withdrawing funds from the trust. 

However, Grayscale’s position as the largest spot Bitcoin ETF in terms of assets under management (AUM) is now facing competition from BlackRock’s iShares Bitcoin Trust (IBIT), which manages $16.91 billion.

Grayscale has responded to the changing landscape by announcing plans in March to seek approval from the Securities and Exchange Commission (SEC) to spin off a portion of Grayscale’s assets into a new, lower-fee Bitcoin Mini Trust. The exact fees for the Mini Trust are yet to be determined.

Hong Kong Market Surges Amid Growing Demand

Eric Balchunas, an ETF expert at Bloomberg, commented on the recent developments in the Bitcoin ETF market. He noted that for the first time, there were positive net flows without any outflows among Bitcoin ETFs, stating: 

Not going to spike the football like some did during the outflow period, but will point out that over 95% of the ETF investors held during what was a pretty nasty and persistent downturn.

Balchunas emphasized that while outflows and inflows are expected to occur, the track record suggests that ETFs generally witness net growth and demonstrate resilient investor sentiment.

In contrast to the US market, Hong Kong has also made advancements in the Bitcoin ETF space. Farside data suggests that the launch of Bitcoin and Ethereum ETFs in Hong Kong is less significant than their US counterparts. 

However, a new HK ETF Flow dashboard has been introduced due to popular demand. Balchunas acknowledged the relatively smaller scale of the Hong Kong ETF market compared to the US but highlighted the local market’s rapid growth. He stated:

The HK ETFs at $310 million are equivalent to $50 billion in the US market. So, in that regard, these ETFs are already as significant in their local market as the US ones are in theirs.

As of the time of writing, the leading cryptocurrency in the market is valued at $63,300 per coin, reflecting a 1.4% decrease in price over the past 24 hours. The decline occurred after an unsuccessful endeavor to establish a stable position above the $65,000 threshold during the early hours of Monday’s trading session.

Featured image from Shutterstock, chart from TradingView.com 

Dogecoin has now presumably entered a long-term bullish rally that could send its price higher from here, according to one crypto analyst. This comes after the price had crashed below $0.13, before a swift recovery brought it back above $0.16. So what is driving this current bull rally?

Dogecoin Ready For Long-Term Bullish Rally

Crypto analyst Behdark, on the TradingView website, shared an interesting analysis that has caught the eye of Dogecoin community members. The crypto analyst identified that the meme coin has now entered a bullish rally, with reasons to back up why this is so.

Behdark explained that the Dogecoin price has formed strong support just above $0.1, and this has helped to bounce the coin back up in the event of a crash. The demand at this level is what ensures that whenever the price crashes down, it is always rejected to the upside, as seen with the most recent market crash.

The meme coin has also been in a long period of correction, and this is one of the reasons why the analyst believes it is entering into a bullish rally. Behdark pointed toward the previous correction of 900 days and that this current current will hold above 500 days in a similar fashion.

However, the long-term bullish rally did not just begin, Behdark explains. Apparently, the rally had begun back in October 2023 when the price had successfully broken above $0.06. Naturally, this bull rally has seen periods of uptrend and downtrend, helping the analyst identify the next wave that the price just entered.

Invalidation Thesis For The Analysis

Like with any analysis, Behdark’s analysis also comes with a level at which the predicted bullish rally will be invalidated. In this case, the crypto analyst outlines that the Dogecoin price must maintain above $0.08, as “closing a daily candle above the invalidation level with violate the analysis.”

Nevertheless, Behdark believes that the DOGE price is now in a D wave after the completion of the C wave following its rise above $0.2. This D wave has been historically bullish for the price, triggering at least a 100% price increase.

As for the price targets, Behdark puts the first target at $0.28. After this, a retracement is expected back to the $0.16 level, which would mark the completion of the E and F waves. Then once the G wave begins, the analyst sees the price rising over 100% to $0.38.

Presently, the Dogecoin price is still trading above $0.16, with an 18.6% increase in the last week. It remains the 8th-largest cryptocurrency in the space, with a market cap of $24.18 billion at the time of writing.

On-chain data shows the Bitcoin exchange inflow trend has been at its lowest in almost a decade recently, a sign that may be bullish for the asset.

Bitcoin Exchange Inflows Have Been On The Decline Recently

As pointed out by CryptoQuant author Axel Adler Jr in a post on X, the BTC exchange inflows have been heading down for a while now. The “exchange inflow” is an on-chain indicator that keeps track of the total amount of Bitcoin the investors deposit to wallets attached to centralized exchanges.

When this metric’s value is high, it means that holders are transferring a large number of coins to these platforms right now. As one of the main reasons why investors might deposit coins in the exchanges’ custody is for selling purposes, this kind of trend can be bearish for the asset.

On the other hand, the low indicator implies the exchanges aren’t receiving many deposits currently. Depending on the trend in the opposite metric, the exchange outflow, such a trend can be either bullish or neutral for the cryptocurrency’s price.

Now, here is a chart that shows the trend in the Bitcoin exchange inflow over the past decade:

As displayed in the above graph, the trend of the Bitcoin exchange Inflow is sitting at 20,000 BTC right now, the lowest value the market has seen since 2015.

The analyst has also attached the data for the indicator’s 365-day moving average (MA) to the same chart. This line has been on the decline since February 2018, dropping from 90,000 BTC to 36,000 BTC today.

The decline in the exchange inflows could indicate that the appetite for selling the cryptocurrency has reduced. If so, due to how supply-demand dynamics work, the price could naturally benefit from a bullish effect from this pattern.

However, there could be another explanation for this long-term trend, and it’s the fact that the exchanges haven’t played a constant role in the market throughout these years.

In the 2017 cycle, the exchanges were relevant in the market, so they actively received huge deposits. Still, during the 2021 cycle, new ways to invest in Bitcoin popped up, which may explain why the drop-off occurred between the two periods.

Today, Bitcoin finds itself in an era when spot exchange-traded funds (ETFs) have gained approval and are attracting considerable demand.

With these ETFs, cryptocurrency exchanges are bound to have lost more relevance, hence why it looks like this cycle will see even fewer deposits than the 2021 epoch.

BTC Price

Bitcoin had recovered beyond $65,000 earlier during the past day, but the asset seems to have slipped, as it’s now back down to $63,100.

German state-owned development bank Kreditanstalt für Wiederaufbau (KfW) is gearing up to issue its first blockchain-based digital bond, marking a significant milestone in adopting crypto technology within the financial sector. 

According to a recent report by Bloomberg, KfW has already successfully issued a digital bond as a central register security in compliance with the German Electronic Securities Act (eWpG). The bank is preparing to take the next step by offering a blockchain-based bond to attract a wide range of investors.

Streamlined Crypto Bond Offering

Treasurer Tim Armbruster expressed optimism about digitalization’s advantages in terms of increased efficiency and scalability. Recognizing these potential benefits, KfW aims to leverage blockchain technology to streamline and increase its bond issuance process.

KfW plans to hold discussions during a several-week preparatory phase to familiarize European institutional investors with the upcoming transaction. 

This will reportedly allow investors ample time to understand and evaluate the opportunities the blockchain-based bond presents. Union Investment, an experienced investor in crypto assets, has been announced as an anchor investor in this deal.

Per the report, while the bond issuance will be in digital format, KfW will continue to process payments using traditional payment systems. The transaction is expected to be finalized in the summer of this year.

Anonymous Source Reveals Anticipated €100M Bond

Several prominent financial institutions have been enlisted to facilitate the bond issuance. DZ Bank, Deutsche Bank, LBBW, and Bankhaus Metzler will act as joint bookrunners and oversee the process. Frankfurt-based fintech firm Cashlink Technologies GmbH will be the crypto assets’ registrar.

Although specific details about the bond remain undisclosed, an anonymous source familiar with the matter revealed that the minimum size is anticipated to be €100 million ($108 million). The bond is expected to mature in December 2025, providing investors with a defined timeline for their investment.

KfW’s move follows in the footsteps of JPMorgan, which recently ventured into the crypto market by employing blockchain technology to offer municipal bonds to investors. This move reflects the increasing recognition of blockchain’s potential to revolutionize traditional financial operations.

KfW’s pioneering issue of a blockchain-based digital bond sets a precedent for other financial institutions to explore similar avenues. 

The successful implementation of this technology could lead to increased efficiency and accessibility in the bond market, ultimately transforming the way crypto assets are issued and traded among traditional finance institutions.

As of this writing, the cryptocurrency market is valued at $2.2 trillion. Bitcoin (BTC), the foremost cryptocurrency in terms of market capitalization, is currently trading at $63,200. 

Featured image from Shutterstock, chart from TradingView.com

Cardano’s (ADA) founder, Charles Hoskinson, recently raised the possibility of Cardano partnering with Bitcoin Cash. He noted how significant this partnership could be for Bitcoin Cash as it would put it ahead of networks like Bitcoin. 

What Cardano’s Potential Partnership With Bitcoin Cash Is About

Hoskinson conducted a “hypothetical poll” on his X (formerly Twitter) platform, asking his followers if they would like to see Bitcoin Cash become a Cardano “partnerchain.” He noted that this partnership would upgrade Bitcoin Cash with “Useful Proof of Work Leios, NiPoPoWs, and Ergo tech.”

Hoskinson further claimed that the partnership would make Bitcoin Cash the “fastest and most useful proof of work chain (PoW) ever built.” At the time of writing, over 13,000 people have voted on the poll, with 67.7% voting in favor of the partnership. Ben Scherrey, founder and CTO of blockchain firm Biggest Lab, also supports the move, noting how both chains share similarities. 

He stated in an X post that he “always thought there was some natural synergy between the two chains given the shared UTXO model that allows for high scalability and decentralization.” Meanwhile, it is worth noting that Bitcoin Cash is already known to have an edge over Bitcoin as it is faster, cheaper, and more scalable. 

Therefore, Hoskinson’s claim that Bitcoin Cash will become the fastest and most useful PoW may be valid. Upgrading Bitcoin Cash with PoW Leios and Ergo tech means the network can process transactions faster and have a more efficient smart contract functionality. However, the concept of making Bitcoin Cash a Cardano “partnerchain” is still unclear, considering that they operate different consensus mechanisms. 

Cardano Also Set To Undergo Two Major Upgrade

Cardano is also set to experience two significant upgrades. One is the Chang hard fork, which the network plans to carry out this quarter. This will promote decentralized governance on the blockchain as Cardano shifts to a community-driven governance model. Given the criticism that Hoskinson has prevented the network from progressing, this could change the outlook of the network. 

Specifically, Tom Dunleavy, Partner and Chief Investment Officer (CIO) at MV Capital, once called Hoskinson a “megalomaniac” who is “unwilling to change or adapt to the ecosystem.” Therefore, with the community having more control, there could be changes in the network that could help it adapt to the ecosystem. 

The second upgrade is the introduction of the Ouroboros Leios protocol, which will also take place this year. This upgrade is expected to enhance Cardano’s scalability and efficiency. Hoskinson noted that this development is a big step towards solving the blockchain trilemma of security, scalability, and decentralization. 

Recent reports revealed that the Australian Securities and Investment Commission (ASIC) was granted its first victory on a non-cash payment case involving cryptocurrencies. Per the documents, an Australian court ruled partially in favor of the watchdog’s lawsuit against BPS Financial Pty Ltd (BPS).

“Qoin Scheme” Earns $26 Million In Sales

In 2022, ASIC initiated civil penalty procedures against BPS for alleged “misleading, false or deceptive” advertising and engaging in unlicensed operations with a non-cash payment facility involving a crypto asset token.

The Australian regulator claimed that the Qoin Facility was a “non-cash payment facility” established by the company in 2020. The “Qoin scheme” included the Qoin tokens, the Qoin Wallet, and a distributed digital ledger implemented by blockchain technology.

Moreover, ASIC alleged that BPS promoted the tokens to retail consumers and business owners as a payment method for “goods and services offered by Qoin Merchants.”

Nonetheless, the tokens could only be traded on the BTX Exchange, operated by Block Trade Exchange Pty Ltd (BTX), a company under BPS. The crypto exchange seemingly only allowed trading Qoin tokens for Australian dollars, and over time, it allegedly imposed restrictions that limited the ability to exchange the token.

According to the press release, the Qoin Wallet had over 93,000 users by September 2022. Additionally, it received over AU$40 million, around $26.5 million, from Qoin token sales.

Court Rules In Favor Of Watchdog

On May 3, 2024, the Australian Federal Court found that BPS was guilty of most of the charges leveled by ASIC. Judge J Downes ruled that the company “engaged in unlicensed conduct when offering the ‘Qoin Wallet,’ a non-cash payment facility which used a crypto-asset token.”

Judge Downes considered that BPS broke the Corporations Act for at least 10 months in 2020 as it did not hold an Australian Financial Services License. As a result, the company was not authorized to “issue or provide advice about the Qoin Wallet.”

Moreover, the judge found that the company engaged in misleading marketing and representation of the product. The reasons for this ruling include BPS’s false claims that the Qoin Wallet was officially registered and that said wallet could be used to purchase goods and services from an “increasing number of Qoin Merchants” when it was declining.

Additionally, the Court found that the only crypto exchange that accepted Qoin before November 2021 was the BTX exchange. This contradicted the claims that Qoin tokens could be traded for other crypto assets or AUD from different exchanges.

Clearer Regulatory Framework For Crypto?

ASIC Chair Joe Longo deems this “a significant ruling as the first court outcome against a non-cash payment facility involving crypto.”  However, the Court did not agree with all of ASIC’s arguments against BPS.

According to the official document, Judge Downes disagreed with the regulator’s claim that the Qoin Wallet and the Qoin Blockchain were one single scheme as part of the Qoin Facility:

Contrary to ASIC’s submissions, the Qoin Blockchain, a means of acquiring Qoin and a means whereby business operators who hold Qoin Wallets can register as Qoin Merchants are not components of, and are not themselves, the mechanism which allows the user to make the non-cash payment.

The Court’s rejection becomes a crucial ruling against the regulator’s attempt to classify blockchain technology as a financial product under Australian law. According to ASIC’s Chair, the agency has taken several enforcement actions against crypto asset businesses “with the intention of clarifying what is a regulated product and when the provider needs a license.”

Lastly, Longo added that the enforcements are meant as a message to the crypto community:

These proceedings should send a message to the crypto industry that their products will continue to be scrutinized by ASIC to ensure consumers are protected and that they comply with regulatory obligations.