"Inadequate" Crypto ETFs Aren't Backing Down

Ah Monday... Everyone’s favourite day of the week. Whilst you were all living it large this weekend, Blockhead was busy keeping up with the ever-tireless world of crypto. Here’s what you missed, and what to look forward to in the week ahead. As ever, if you’re here from a friend, subscribe now.

The all-mighty SEC has responded to the slew of crypto exchange-traded fund (ETF) applications filed over the last couple of weeks. In true SEC fashion, the regulator delivered the disappointing news that the applications in question are "inadequate."

BlackRock set the ball rolling two weeks ago with its Bitcoin ETF application. WisdomTree, Invesco, and Valkyrie Digital Assets filed similar applications with the SEC shortly after. Even HSBC, notoriously anti-crypto, announced its support for customers to trade cryptocurrency ETFs in Hong Kong.

Well, the SEC has since informed Nasdaq and Cboe Global Markets, which filed the applications on behalf of asset managers including BlackRock and Fidelity, that the applications are not sufficiently clear and comprehensive.

Although one can't be too surprised about the SEC's pushback, considering its relentless purge of US crypto companies, news of the regulator's crypto ETF disapproval sent Bitcoin down 5% on Friday.

However, the asset managers aren't backing down too easily. On Friday, Cboe refiled Fidelity's Bitcoin ETF application. Cboe said the refreshing will address the SEC's concerns and added that it is working with Coinbase to prevent any market manipulation in the process. The SEC had taken particular issue with the exchanges that did not name the crypto-trading partner they planned to work with.

The asset managers' resilience was also shared by Bitcoin, which has returned to the higher end of $30,000.

Elsewhere:

Hong Kong has named the members of its Task Force on Promoting Web3 Development, among which is Animoca Brands co-founder and executive chairman, Yat Siu. The Task Force is chaired by the Financial Secretary and consists of 15 non-official members from relevant market sectors, along with key government officials and financial regulators. Siu said he believes that the "work of the Task Force will help to shape not only Hong Kong but also globally in the adoption of blockchain technologies, particularly in the areas of regulation, ecosystem building, industry development, and talent development.”
Whilst Bitcoin took a bit of a wobble over the weekend, Pepe and Litecoin have been surging formidably. Over the last 24 hours alone, Pepe has surged 15%, whilst Litecoin jumped over 30% in three days. Litecoin's pump is attributed to it trending on social media ahead of its halving event on 2 August. A halving event is commonly perceived as a positive force that stimulates market optimism, as it reduces miners' rewards by 50%. Pepe's boost is regarded as a short squeeze as the market looks for speculative assets.

Over in South Korea, crypto legislation is fostering a safe harbour for the industry. The country's National Assembly has approved a bill aimed at protecting the interests of crypto investors and establishing a legal framework for digital assets. Known as the Virtual Asset User Protection Act, the legislation will come into effect next year. Under the new laws, crypto service providers will be required to safeguard user assets, maintain insurance, store reserves in offline cold wallets, and keep records of transactions. Penalties will also be imposed for price manipulation, false promotion of crypto assets, and failure to provide necessary investor information. The legislation also grants the Bank of Korea the authority to request data from cryptocurrency platforms to monitor financial and monetary stability.
OKX and treble winners Manchester City have signed a $70 million deal over three years. The deal will see OKX becoming the official sleeve sponsor of both men's and women's first-team playing jerseys. This sponsorship marks the third deal between OKX and Manchester City in just over a year.