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What were the 4 biggest cryptocurrency stories of 2023?
Key points
- BlackRock and other traditional financial institutions have filed applications to offer spot Bitcoin exchange-traded funds (ETFs).
- Former CEO of cryptocurrency exchange FTX, Sam Bankman-Fried, has pleaded guilty to fraud involving the misuse of customer funds at the bankrupt company.
- Binance Holdings Ltd. and its CEO, Changpeng Zhao, have pleaded guilty to criminal charges related to violations of the Bank Secrecy Act (BSA).
- The SEC has filed charges against Binance, Coinbase Global Inc., Kraken and other platforms for operating what it called unregistered exchanges.
The past year has been a pivotal one in terms of the relationship between the cryptocurrency industry, regulators, and financial markets. US authorities have cracked down on major players and financial titans have thrown their weight behind them, while traditional finance has taken steps to accept, if not embrace, cryptocurrencies.
Here are four stories that sum up the year in the cryptocurrency world.
BlackRock Files for Bitcoin ETF
The price of Bitcoin has recovered significantly from the lows seen in late 2022 and much of the renewed interest in cryptocurrency has to do with the possibility of at least one spot Bitcoin ETF being approved by early next year. While Bitcoin Futures ETFs already exist, in the past several applications for spot Bitcoin ETFs have been rejected. BlackRock’s entry In June, the bitcoin ETF arena changed everything.
BlackRock’s ETF application was seen as a major step forward for cryptocurrencies. The company is one of the largest asset managers in the world and could bring a greater level of credibility to the cryptocurrency market. Once BlackRock entered the race, other industry giants, like loyaltyhave renewed their offering of spot ETFs.
The approval of a spot Bitcoin ETF would be a pivotal moment for the cryptocurrency in terms of regulation and trust. Experts estimate that a spot Bitcoin ETF could lead tens of billions of dollars money back into the Bitcoin market in a few years. For now, the Securities and Exchange Commission (SEC) has until January 10 to decide on Ark Invest’s ARK 21Shares Bitcoin ETF.
Sam Bankman-Fried found guilty of fraud
Just last year, FTX CEO Sam Bankman-Fried was seen by his supporters as the cryptocurrency industry’s wunderkind and potentially the world’s first trillionaireHe is now awaiting sentencing after being found guilty of fraud and conspiracy for his role in the misuse of customer funds at his exchange.
While SBF may be getting what it deserves, the reality is that many FTX customers have been burned and may never be compensated. While FTX intends to return 90% of recovered assets to customers, depositors they will not regain the true value of the funds they had on the stock exchange at the time of failure. That’s because not all assets will be recovered, and those depositors missed out on this year’s cryptocurrency rally.
The entire FTX saga is a stark reminder that many of the benefits of cryptocurrencies are lost when users don’t control their private keysIt remains to be seen whether cryptocurrency users will take self-custody more seriously in the future.
DOJ Charges Binance and ‘CZ’
Recently, members of Congress have regained their interest in protecting themselves from the use of cryptocurrencies for financial crimes. This concern has been brought to the fore by recent charges from the United States Department of Justice (DOJ) against Binance Holdings Ltd.the world’s largest cryptocurrency exchange. In November, Binance and its founder Changpeng Zhao, known as “CZ,” pleaded guilty to money laundering charges and agreed to pay $4.3 billion in fines and settlements.
Treasury Secretary Janet Yellen said the exchange allowed “illicit actors to transact freely, supporting activities ranging from child sexual abuse to illegal drug trafficking to terrorism, through more than 100,000 transactions.”
Binance’s call is further evidence that crypto’s “Wild West” days may be over. Investors may now want to think about other areas where stricter compliance is needed. anti-money laundering regulations may apply, such as stablecoins.
Coinbase, Kraken, Binance Charged by SEC
Binance was sued by the SEC in June for operating an unregistered stock exchange, as well as Monetary basealways in June, and The Krakenin November.
The action against Coinbase was particularly notable, as the company has often touted its willingness to cooperate with U.S. regulators and play by the rules. Regardless of Coinbase’s intentions, the reality is that the exchange has listed assets that the SEC considers securities.
At the heart of the matter is a disagreement about what is meant by ” safety and who has the authority to decide. Coinbase CEO Brian Armstrong said in April that it would consider moving the exchange if Congress and regulators did not provide more clarity on cryptocurrency regulations in the coming years. Federal officials, such as Commodity Futures Trading Commission President Rostin Behnam, they said the US regulatory framework needs clarification.
In 2024, the industry will continue to seek greater clarity about which cryptocurrencies are securities and which are commodities. In the meantime, the SEC will likely continue to operate under Chairman Gary Gensler’s belief that “everything but bitcoin” falls under its purview.