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Block 1: Key news
Bitcoin liquidation imminent?
The United States Marshals Service (USMS), an agency under the U.S. Department of Justice, has signed a $32.5 million contract with Coinbase to manage and liquidate digital assets seized by the government. The partnership aims to simplify the management of large-cap cryptocurrencies held by the USMS, including the 200,000 BTC seized in fraud cases. Coinbase Prime, Coinbase's institutional arm, will be in charge of this process, which could influence the evolution of the BTC price.
Société Générale: Towards European regulation
Societe Generale -Forge has announced technical and regulatory changes to its EUR CoinVertible (EURCV) stablecoin to comply with new European MiCA (Markets in Crypto-Assets Regulation) rules. The stablecoin, based on Ethereum, becomes freely transferable without prior authorization and is restructured as an Electronic-Money Token (ET) for improved traceability. Société Générale-Forge, registered as an electronic money institution and digital asset service provider, aims to integrate EURCV into decentralized finance (DeFi). This initiative could encourage the adoption of euro-backed stablecoins in Europe.
Circle, leader in Europe
Circle has become the first stablecoin issuer in Europe to comply with MiCA regulations. The company now issues its USDCs and EURCs in compliance with MiCA, facilitating access to regulated stablecoins for European professionals via the Circle Mint solution. The process, though complex, ensures a solid and transparent infrastructure for the development of cryptocurrencies in Europe.
Sony to relaunch cryptocurrency platform
Sony plans to relaunch the Amber Japan cryptocurrency exchange, renamed S.BLOX, which it acquired via its Quetta Web subsidiary. The exchange, formerly known as WhaleFin, will be completely revamped with a new user interface and improved application. This initiative marks a significant step forward in Sony's involvement in the cryptocurrency ecosystem. No reopening date has yet been announced.
Block 2: Crypto Analysis of the week
US SEC Chairman Gary Gensler recently stated that he expects to see spot Ether ETFs available as early as September.
For fans of crypto, ETFs or both, the potential launches of Spot Ethereum ETFs have added a layer of excitement after the launch earlier this year of Spot Bitcoin ETFs. Since the SEC approved the Ethereum Spot ETFs, there has been much discussion about certain documents such as 19b-4 and S-1 and their relevance. While much of their content is standard for SEC filings, several takeaways lurk in the legalese. Based on the S-1s and other industry data, here's what we know so far about Ethereum Spot ETFs.
So-called "19b-4" filings are made by exchanges (for example, the New York Stock Exchange or NASDAQ) to notify the SEC of a proposed rule change. These filings are necessary to list a new type of ETF.
Issuers were invited to amend their 19b-4s around May 20, by which time most issuers had removed the staking provisions. The SEC approved amended versions of these documents from eight issuers - VanEck, 21Shares, Grayscale, Fidelity, Invesco, iShares, Franklin and Bitwise - shortly thereafter, on May 23. Later, ProShares also filed.
While this means that the SEC will likely approve Ethereum Spot ETFs, we're still waiting for official S-1 approval (registration statements) before these ETFs begin trading. Ethereum Spot ETF issuers have filed amended S-1s in response to SEC comments - often a good sign that discussions are progressing. Final approval will probably come within 90 days of the initial 19b-4 approvals, which means it could happen this summer.
Other things to know:
Potential concentration among custodians. As with Bitcoin Spot ETFs, the majority of Ethereum Spot ETF issuers have chosen Coinbase as their custodian, which could lead to concentration issues or a potential conflict of interest between competing products. Only VanEck and Fidelity have chosen custodians outside Coinbase. (VanEck, however, plans to enter into an agreement that would allow Coinbase to become an additional custodian).
Creation/redemption baskets vary by issuer. Larger issuers such as iShares, Fidelity and VanEck will issue and redeem shares in blocks of 40,000, 25,000 and 25,000 respectively. Many other issuers will use baskets of 10,000.
The fee war is yet to be determined. Fees have yet to be specified (but logically, we could see fees drop as low as for cash Bitcoin ETFs).
Investors need to weigh up the pros and cons of investing in an ETF versus a direct investment. Investors may not benefit from some of the advantages associated with spot ether ETFs. Investors would not have access to staking or to "forked" or "parachuted" assets.
Block 3: Gainers & Losers
Crypto chart (Click to enlarge)
Block 4: This week's readings
Inside a16z Boot Camp for crypto startups (Wired)
Inside the ruthless frenzy of a violent gang stealing cryptocurrencies at home (Wired)
Will digital currencies become the norm as the world moves to a cashless society? (The Conversation)
