The week the SEC finally approved spot Bitcoin ETFs: Law Decoded

Even Gary Gensler voted to approve the spot Bitcoin ETFs.

More than a decade after the first application was filed, the crypto industry finally has spot Bitcoin (BTC) exchange-traded funds in the United States. On Jan. 10, the U.S. Securities and Exchange Commission (SEC) approved Bitcoin ETF applications from ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex and Franklin Templeton. The SEC’s decision was a historic milestone for crypto, but the road was not smooth. It all started in 2013, when Gemini co-founders Cameron and Tyler Winklevoss filed the first application for a spot Bitcoin ETF in the United States.

The decision by the SEC to approve a spot cryptocurrency ETF in the U.S. for the first time raised questions about the intentions of Gary Gensler, the commission’s chair. Since taking office, Gensler has often spoken about the risks of crypto investments, connecting digital assets to fraud and scams. However, Gensler was one of three commissioners who voted to approve the offerings. The 3-2 vote tally suggests the SEC chair may have been the deciding vote. Some community members suggested the SEC chair “voted with Wall Street,” as the expansion of crypto products is likely to bring in investor funds. Others speculated that “the writing was already on the wall” for the SEC to approve a spot Bitcoin ETF, given that the commission had been mandated by a federal court to review Grayscale’s offering.

Not everyone is happy with the SEC’s decision. In her statement, SEC Commissioner Caroline Crenshaw — one of two commissioners to vote against the approval — wrote that the agency’s move to greenlight the Bitcoin-based investment vehicles was “unsound and ahistorical.” Better Markets, a nonprofit economic organization, also didn’t mince words in its criticism of the ETF decision, describing the asset as inherently worthless and without purpose. Gold advocate and Bitcoin critic Peter Schiff added his voice to the mix, saying that the approvals were nothing more than a series of new ways for speculators to gamble on Bitcoin.

Honduras special zone recognizes Bitcoin as a unit of account

Less than two years after adopting Bitcoin as legal tender, Próspera, a special economic zone in Roatan, Honduras, has officially recognized Bitcoin as a unit of account — meaning it can now be used to measure the market value of goods and services. For the time being, tax liabilities of Bitcoin-electing entities will be determined in reference to BTC for internal accounting purposes but reported to Próspera Zone for Employment and Economic Development (ZEDE) in United States dollars or the Honduras lempira. Once the issues are resolved, entities will report tax liabilities (and pay the corresponding amounts) to Próspera ZEDE in BTC. 

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Google Play Store blocks Binance, OKX in India 

Google’s Play Store in India has removed Binance and OKX crypto exchange apps after the government issued a noncompliance notice against them. The removal follows a similar decision by Apple’s App Store in India in December 2023. Back then, the Indian Ministry of Finance’s Financial Intelligence Unit (FIU) issued a notice to Binance, Huobi, Kraken, Gate.io, KuCoin, Bitstamp, MEXC Global, Bittrex and Bitfinex for operating illegally in India. The FIU notice stated that any exchange providing services to Indian users must register as a “reporting entity” and submit statements to the income tax department. The FIU proposed that the Ministry of Electronics and Information Technology block the websites of the mentioned exchanges due to non-compliance.

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Do Kwon requested SEC trial postponement 

Terraform Labs co-founder Do Kwon has requested the United States District Court for the Southern District of New York to postpone his trial date until March, citing extradition challenges in Montenegro as the reason for seeking the delay. In a letter addressed to Judge Jed Rakoff, Kwon’s legal team emphasized his interest in attending the trial personally, which is scheduled for Jan. 29. However, they had anticipated that Kwon would have already been permitted to return to the U.S. by now. 

In February 2023, the SEC filed fraud charges against Kwon, accusing him of having a role in orchestrating a multibillion-dollar crypto securities fraud. The charges were related to the collapse of Terraform Labs’ stablecoin TerraUSD (USTC) and its associated Terra (LUNA) token. While recognizing the urgency of the trial, Kwon’s legal team indicated that this month’s trial date would not be feasible for him to attend.

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