wells notice

Scaramucci: ‘We’re through the bear market’ as Bitcoin notches up 70% YTD

Bitcoin’s strong start to 2023 is persisting despite numerous headwinds, and is currently outperforming the S&P 500 Index by nearly 60 percentage points.

Following Bitcoin’s (BTC) stellar start to 2023, SkyBridge Capital founder Anthony Scaramucci believes “we’re through the bear market” and expressed confidence in his firm’s crypto investments.

However, “the Mooch” qualified the statement by adding, “That is a guess. We don’t know.”

In an April 6 interview with Yahoo Finance, Scaramucci noted that Bitcoin has consistently outperformed every other asset class over longer periods of time, saying:

“But any time that you’ve held Bitcoin in a four-year rolling interval, so you pick the day, hold it for four years, you’ve outperformed every other asset class.”

Scaramacci also expressed his bullish outlook for the leading crypto by market cap ahead of the next halving cycle, which is set to take place in early March 2024, according to NiceHash.

Halving countdown according to NiceHash.

Bitcoin has historically operated on a four-year cycle, with the start of an upward trend occurring soon after each halving cycle.

The theory behind the price cycle is that block rewards being halved makes the BTC in existence more scarce and therefore more valuable.

Bitcoin has recorded gains of nearly 70% in 2023, according to Cointelegraph Pro, increasing from $16,521 to $28,060 compared to the S&P 500 index, which has risen by just over 7% during the same time period.

Bitcoin’s enviable start to 2023 also comes amid what can only be described as poor market and regulatory conditions that may yet weigh down the price.

Crypto institutions based in the United States are struggling to find banking partners and liquidity following the collapse of crypto-friendly banks such as Silvergate, Silicon Valley and Signature Bank, and there are fears that the U.S. is putting into place a policy to prevent banks from interacting with crypto.

Related: Bitcoin ‘faces headwinds’ as US money supply drops most since 1950s

Additionally, the two largest crypto exchanges in the world according to CoinMarketCap — Binance and Coinbase — have both been subject to recent scrutiny from regulators.

Coinbase received a Wells notice on March 22 notifying of possible enforcement action from the Securities and Exchange Commission, while Binance has been sued by the Commodity Futures Trading Commission for allegedly violating trading and derivatives rules

Yet, despite these events, crypto sentiment remains positive.

The Crypto Fear & Greed Index, an indicator used to measure crypto sentiment, is currently sitting in greed territory and is pushing for highs that haven’t been seen since November 2021 — Bitcoin’s all-time high.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

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‘US has left a vacuum that other countries are eager to fill’: Coinbase

While the U.S. government opts for “regulation by enforcement,” other countries are fostering “vibrant” crypto ecosystems due to progressive regulation, argues Coinbase’s Daniel Seifert.

With Coinbase seemingly on the verge of a court battle with the Securities and Exchange Commission (SEC), the firm has emphasized that the U.S. government’s hawkish approach to crypto regulation has “left a vacuum that other countries are eager to fill.’

The SEC issued Coinbase a wells notice on March 22 outlining that SEC staff had recommended the agency take enforcement action over “possible violations of securities laws” concerning some of the firm’s asset listings, staking services and Coinbase Wallet.

In a March 23 blog post titled Europe is winning. Will the US catch up? Daniel Seifert, Coinbase’s Vice President and Regional Managing Director in Europe, stressed that the U.S.’s “regulatory approach to crypto has been marked by regulation by enforcement,” despite industry-wide calls for “comprehensive crypto regulation.”

“This approach has created an environment of uncertainty and instability in the crypto industry,” he wrote.

As such, Seifert argued that the U.S. is losing its status as the leading hub of the crypto sector, while France, the U.K. and the European Union, are now building “vibrant” ecosystems due to their friendlier approach to crypto regulation.

“The US has left a vacuum that other countries are eager to fill,” he wrote, adding: “we are proudly an American company. It’s hard to sit by and watch the US squander the opportunity it has been given.”

In particular, Seifert highlighted the significance of the Blockchain Week event being hosted at the Louvre in Paris this month. He also pointed to the U.K.’s recent push to become a crypto hub, and the European Union’s Markets in Crypto-Assets (MiCA) regulation that is slated to come into effect in 2024.

“This year it’s being held in a private space at the Louvre, arguably the greatest national treasure in France and one of the world’s most respected museums,” he said, adding:

“To me this is a clear signal: France is rapidly recognizing the opportunity that crypto presents and is offering it space to flourish. The broader EU, the UK, UAE, Hong Kong, Singapore, Australia, and Japan are all following suit.”

The MiCA legislation has been in development for two years, and aims to establish a “harmonized set of rules for crypto-assets and related activities and services.”

Related: Cathie Wood’s ARK loading up on Coinbase shares again, buying $18M

It is generally expected to be a positive move for the European cryptocurrency ecosystem, as it will offer clear rules and guidelines for the sector.

“Already we are seeing that Europe now matches the US in its share of crypto developers ( 29% apiece globally). The US used to lead the charge with 40%,” he said, adding that:

“This level of growth does not happen by chance. Concerted efforts have to be made, such as developing a regulatory framework that will provide clarity and stability for businesses operating in the space.”

In a lengthy March 23 Twitter thread, the Crypto Council for Innovation also highlighted similar points to Seifert, noting that “crypto is global, and nobody is waiting around for the US to land the plane.”

The thread explored positive developments across the globe, including examples such as the National Australia Bank’s work with non-USD pegged stablecoins, Hong Kong’s efforts to become a digital asset hub, and the Canadian Securities Administration recently imposing “enhanced investor protection commitments” on domestic crypto exchanges.

‘US has left a vacuum that other countries are eager to fill’: Coinbase

While the U.S. government opts for “regulation by enforcement,” other countries are fostering “vibrant” crypto ecosystems due to progressive regulation, argues Coinbase’s Daniel Seifert.

With Coinbase seemingly on the verge of a court battle with the United States Securities and Exchange Commission (SEC), the firm has emphasized that the U.S. government’s hawkish approach to crypto regulation has “left a vacuum that other countries are eager to fill.“

The SEC issued Coinbase a Wells notice on March 22 outlining that SEC staff had recommended the agency take enforcement action over “possible violations of securities laws” concerning some of the firm’s asset listings, staking services and Coinbase Wallet.

In a March 23 blog post titled, “Europe is winning. Will the US catch up?” Daniel Seifert, Coinbase’s vice president and regional managing director in Europe, stressed that the U.S.’s “regulatory approach to crypto has been marked by regulation by enforcement,” despite industry-wide calls for “comprehensive crypto regulation.”

“This approach has created an environment of uncertainty and instability in the crypto industry,” he wrote.

As such, Seifert argued that the U.S. is losing its status as the leading hub of the crypto sector, while France, the U.K. and the European Union are now building “vibrant” ecosystems due to their friendlier approach to crypto regulation.

“The US has left a vacuum that other countries are eager to fill,” he wrote, adding: “we are proudly an American company. It’s hard to sit by and watch the US squander the opportunity it has been given.”

In particular, Seifert highlighted the significance of Paris Blockchain Week hosted at the Louvre this month. He also pointed to the U.K.’s recent push to become a crypto hub, and the European Union’s Markets in Crypto-Assets (MiCA) regulation, slated to come into effect in 2024.

“This year it’s being held in a private space at the Louvre, arguably the greatest national treasure in France and one of the world’s most respected museums,” he said, adding:

“To me this is a clear signal: France is rapidly recognizing the opportunity that crypto presents and is offering it space to flourish. The broader EU, the UK, UAE, Hong Kong, Singapore, Australia, and Japan are all following suit.”

The MiCA legislation has been in development for two years, and aims to establish a “harmonized set of rules for crypto-assets and related activities and services.”

Related: Cathie Wood’s ARK loading up on Coinbase shares again, buying $18M

It is generally expected to be a positive move for the European cryptocurrency ecosystem, as it will offer clear rules and guidelines for the sector.

“Already we are seeing that Europe now matches the US in its share of crypto developers (29% apiece globally). The US used to lead the charge with 40%,” he said, adding that:

“This level of growth does not happen by chance. Concerted efforts have to be made, such as developing a regulatory framework that will provide clarity and stability for businesses operating in the space.”

In a lengthy March 23 Twitter thread, the Crypto Council for Innovation also highlighted similar points to Seifert, commenting that “crypto is global, and nobody is waiting around for the US to land the plane.”

The thread explored positive developments globally, including examples such as the National Australia Bank’s work with non-U.S. dollar-pegged stablecoins, Hong Kong’s efforts to become a digital asset hub, and the Canadian Securities Administration recently imposing “enhanced investor protection commitments” on domestic crypto exchanges.

Cathie Wood’s ARK loading up on Coinbase shares again, buying $18M

ARK Invest purchased 269,928 shares in Coinbase on March 23, only two days after it sold $13.5 million, its first sale of Coinbase shares this year.

Cathie Wood’s investment management firm has gone back to buying Coinbase shares again, just a day after COIN’s stock price dipped amid news of its Wells notice. 

On March 23, ARK Invest purchased 268,928 Coinbase shares via its ARKK Innovation and ARKW Next Generation Internet exchange-traded funds. The shares wereworth $17.88 million at the time of writing.

Only two days prior, and before the news of the Wells notice broke, ARK Invest sold 160,887 Coinbase shares from its ARK Fintech Innovation ETF. The sale was the first time any of ARK Invest’s ETFs shed Coinbase shares in 2023.

Coinbase’s share price has failed to recover since it shared news it had received a Wells notice warning of possible enforcement action from the Securities and Exchange Commission, which led to COIN shares dropping around 21%.

Shares in Coinbase dipped to a low of $64.27 after trading began on March 23, and at time of writing were trading at $66.87 in after-hours trading, according to Barron’s.

Coinbase’s share price from March 17 to March 23. Source: Barron’s

Related: Coinbase CEO on its Wells notice: SEC is like soccer referees in a game of pickleball

Coinbase CEO Brian Armstrong had also sold shares in his firm between March 17 to March 20 — just days prior to the Wells notice and share price dip.

SEC filings indicate, however, that Coinbase executives and insiders all enter into 10B5-1 selling plans months in advance and that this tranche of sales was pursuant to a trading plan adopted on Aug. 16.

SEC filing showing the latest shares sold by Coinbase CEO Brian Armstrong. Source: SEC Archives

While the SEC reached a settlement with crypto exchange Kraken on Feb. 9 after alleging its staking services qualified as securities, Coinbase has repeatedly asserted that its staking products are fundamentally different from Kraken’s and they cannot be universally labeled as securities.

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Coinbase CEO on its Wells notice: SEC is like soccer referees in a game of pickleball

Brian Armstrong made the interesting analogy when asked to explain the firm’s recent “Wells notice” in “NFL terms.“

Brian Armstrong, the co-founder and CEO of crypto exchange Coinbase, has compared the United States Securities and Exchange Commission (SEC) to “soccer refs” in a game of pickleball, criticizing U.S. regulators for not being able to “agree on the rules” of “this new game.”

The comments came after Armstrong revealed that his firm had been issued a Wells notice on March 22, which he said: “typically precedes an enforcement action.“

The Coinbase CEO has been critical of U.S. regulators’ seeming lack of clarity around crypto regulation. There has also been an ongoing debate on who should be the primary body regulating crypto.

Asked to explain the most recent development “in NFL terms,” Armstrong quipped:

“Imagine you’ve got both football and soccer refs on the field, but we’re actually playing pickleball (fastest growing new sport in America). The refs can’t really agree on the rules of this new game, and one of them decides to change a call they made back in April 2021.”

The reference to a “call they made back in April 2021” refers to the SEC’s approval of Coinbase’s application to go public. Armstrong argued that its filings “clearly explained” its asset listing process and “included 57 references to staking.”

In a separate tweet, Coinbase chief legal officer Paul Grewal claimed the SEC provided “no clear rule book” on crypto regulations and that “efforts to engage with the SEC are met with silence or enforcement actions.“

Both executives appear to welcome the chance to use the “legal process” to provide the crypto industry with regulatory clarity.

“We are proud to stand up for our customers and the industry in these moments,” said Armstrong.

“Going forward, the legal process will provide an open and public forum before an unbiased body where we will be able to make clear for all to see that the SEC simply has not been fair, reasonable, or even demonstrated a seriousness of purpose when it comes to its engagement on digital assets.”

While other firms like Kraken reached a settlement with the SEC that required it to stop offering staking services to U.S. customers, Armstrong has repeatedly asserted that Coinbase’s staking services are not securities and that the firm would be happy to defend this position in court if required.

Related: Cathie Wood’s ARK sells Coinbase stock for the first time in 2023

The crypto community has widely condemned the recent notice, with many agreeing that the SEC has reversed its earlier position regarding Coinbase.

Many have also thrown their support behind Coinbase, seeming to agree that Coinbase would be fighting on behalf of the entire U.S. crypto industry as an unclear regulatory environment drives activity offshore.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

Breaking: Circle squashes rumors of planned SEC enforcement action

Rumors swirled on Twitter that the stablecoin issuer received a litigation notice from the U.S. securities regulator, but a Circle executive rebuffed the claim.

USD Coin (USDC) issuer Circle has denied rumors that it received a “Wells Notice” over its United States dollar-pegged stablecoin.

On Feb. 14, a now-deleted tweet from Fox Business reporter Eleanor Terrett claimed Circle had been ordered by the U.S. Securities and Exchange Commission to cease the sale of USDC due to the stablecoin being an unregistered security. 

However, the rumor was swiftly rebuffed by Dante Disparte, chief strategy officer and head of global policy at Circle Pay. Replying on Twitter just 15 minutes after Terrett’s tweet, Disparte said his firm has not received a Wells Notice. 

A Wells Notice is a formal notice sent by the SEC informing the recipient that the agency plans to bring enforcement actions against them. 

In response to Circle’s denial, Terrett said she “went with the word of several trusted sources” and apologized for the mistake. 

Dante accepted her apology, adding:

“Alas, there is a lot of churn, swirl and rumors informing the market right now.”

The original tweet from Terrett has since been deleted. Her account on Twitter was temporarily deleted but has since returned.

Fears of regulatory action against stablecoin issuers have been running high this week after Paxos Trust Company, the issuer of Binance USD (BUSD), confirmed that it had received a Wells Notice alleging it failed to register the offering under federal securities laws. 

Related: Stablecoins not the target in BUSD crackdown: Matrixport head of research

Asked earlier this week whether Circle had received a similar notice from the SEC concerning USDC, Disparte told Cointelegraph: 

“Circle maintains that USDC is a regulated dollar digital currency issued as stored value under U.S. money transmission law.”

“Facts and circumstances in any type of regulatory action like this are all different, as are the structural and regulatory considerations with each of the cryptocurrencies that are in circulation around the world,” he added.