July 2023 was a month of significant developments and hot topics in the crypto industry. The two major news events that captured the attention of the crypto community were the decision on the XRP case and the race for Bitcoin ETF approvals with the Securities and Exchange Commission (SEC). Additionally, a former CEO's arrest and the upcoming launch of Europe's first Bitcoin spot ETF added to the month's excitement.
In a groundbreaking ruling, a US judge declared that XRP, the altcoin associated with Ripple Labs, is not a security. This decision came as part of an ongoing case brought by the SEC against Ripple Labs since 2020. The court's decision means that XRP sales do not fall under investment contract offerings. However, it is essential to note that the court deemed XRP a security when sold to institutional investors based on the conditions set in the Howey Test. The announcement sent ripples of excitement through the crypto community, resulting in a sharp increase in XRP's price. Following the news, major crypto exchanges, including Coinbase, Kraken, and Gemini, announced their intentions to relist XRP.
The race for a Bitcoin Exchange-Traded Fund (ETF) approval in the US heated up in July, with major players like BlackRock, Fidelity, and Invesco reapplying for ETFs. These companies addressed regulators' concerns by incorporating surveillance-sharing agreements to prevent fraud and manipulation. The SEC's decision on these applications was eagerly awaited, with ARK Investment CEO Cathie Wood expressing confidence that her company is first in line for approval. If approved, BlackRock's ETF could pave the way for institutional short-selling of Bitcoin, making it DTC eligible for easy borrowing and lending of shares for shorting. BlackRock's CEO Larry Fink further fueled the excitement by referring to Bitcoin as an "international asset" and highlighting its potential as a hedge against inflation. Meanwhile, Ethereum gained attention as the "digital silver" to Bitcoin's "digital gold" due to its strong performance and recent supply reduction.
In a significant setback for the cryptocurrency lending platform Celsius, its former CEO Alex Mashinsky was arrested on July 13 following a lawsuit filed by the SEC against the bankrupt company. The charges against Mashinsky included fraud and market manipulation, following an investigation into the company's collapse. Celsius faced troubles when it suspended withdrawals in June 2022, leading to investigations and eventual bankruptcy. The SEC is seeking injunctive relief, restitution, and jail time against Celsius and the CEO's assets. This development highlights the increased scrutiny that the SEC has placed on the cryptocurrency industry, following its actions against major exchanges like Binance and Coinbase.
Europe is still way ahead of USA in crypto regulations and took a step forward in Bitcoin Spot ETFs too. Jacobi Asset Management is set to launch Europe's first spot Bitcoin exchange-traded fund (ETF) this month. Originally planned for launch in July 2022, the ETF faced delays due to market conditions after the Terra crash in May 2022 and the collapse of cryptocurrency exchange FTX in November of the same year. However, the asset manager believes that the current market conditions make it an opportune time for the ETF's launch, as demand has significantly changed since last summer. Unlike previous digital asset products on European stock exchanges, which were structured as exchange-traded notes, this new ETF will offer investors a more direct and regulated way to gain exposure to Bitcoin's performance in the market.
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