Sometimes we have to cover the big news... Even if it has been covered by a million sources. As you all know, a federal court ruling on July 13, 2023 in the SEC's enforcement action against Ripple Labs and its senior leaders disagreed with the SEC's claim that most crypto assets are securities. The court applied the Howey test to determine if transactions in crypto assets qualify as investment contracts and, thus, securities. The ruling found that while Institutional Sales of XRP satisfied the Howey elements, Programmatic Sales and Other Distributions did not. As a result, some trading platforms that had previously delisted XRP relisted the crypto asset. This decision may accelerate debates in Congress about potential legislation to clarify the SEC's jurisdiction and grant new jurisdiction to the Commodity Futures Trading Commission over spot crypto asset transactions. The court's ruling has raised questions about the SEC's previous statements on clear rules for the crypto industry and has impacted the SEC's crypto asset enforcement. See a good breakout of the nuances on the ruling and why the type of transaction matters.
You know it's really summertime when you get back from vacation and an accounting firm has a fresh report for you... PWC dropped their 2023 Global Crypto Hedge Fund Report and it shared some interesting takeaways. Despite regulatory challenges, no traditional hedge funds plan to reduce their crypto exposure this year. Another fun fact was that over 90% of crypto hedge funds expect higher market capitalization for crypto-assets by the end of 2023. While some traditional hedge funds show curiosity, 54% are unlikely to invest in crypto-assets in the next three years, with 37% waiting for asset maturity. It appears crypto funds demand transparency and regulatory requirements after 2022's crypto industry collapse to mitigate risks and boost investor confidence. Also, don't forget tokenization is seen as a significant growth opportunity, with around one-third of traditional hedge funds considering it. See the full report in the link below.
"You will own nothing and you will like it!" The famous WEF ad is spreading within the family. The International Monetary Fund (IMF) emphasized in a recent blog that sovereign fiat currency must be prioritized and safeguarded over crypto assets. The group advised countries to uphold the integrity of their financial systems to prevent crypto assets from replacing sovereign currencies. They suggest that transparent and coherent monetary policy frameworks are essential to effectively address the challenges posed by cryptocurrencies. They also argue that countries should not grant legal tender status to crypto assets to protect national sovereignty, as doing so could lead to fiscal risks, threaten financial stability, and cause rapid inflation. The IMF has also previously warned about the potential risks of crypto assets in relation to taxes, as widespread use could result in evasion of VAT and sales taxes, leading to lower government revenues. Enjoy the FUD!
RFK Jr. is running for President and is openly considering backing the dollar with Bitcoin - which is the central theme from the "Layered Money" book written by Nik Bhatia. The book goes through some monetary history, the issues with the current monetary regime, and discussing central bank digital currencies—the monstrosity that has monetary overlords from China to the eurozone to the Fed drooling— and Bhatia presents his prediction for the future, where bitcoin takes its natural place at the top of the hierarchy. We would have central banks and the private sector both competing for bitcoin deposits and leveraging payment mechanisms on top of their bitcoin reserves. RFK Jr. wants to regain strength in the dollar, rein in inflation, and usher in a new era of American financial stability. Thinking about our other options - we are listening... Check out Nik Bhatia's book and see RFK Jr.'s speech in the link below.
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