CRYPTO INDUSTRY NEWS #10

The SEC will start tracking DeFi transactions. A large American investment fund has invested in cryptocurrencies. Ripple sued the SEC. Another Bitcoin futures are being prepared for launch.

According to the Forbes report published on Friday, August 27, the US Securities and Exchange Commission (SEC) has signed an agreement with the analytical company AnChain.AI for monitoring and regulating the decentralized finance sector (DeFi).

AnChain.AI is a startup working in the field of artificial intelligence and machine learning, specializing in tracking illegal transactions on crypto exchanges, DeFi protocols, and traditional financial institutions.

The initial contract amount is $125,000. The contract also provides for 5 annual options worth $125,000 each, for a total of $625,000.

“The SEC is very interested in understanding what is happening in the field of decentralized finance based on smart contracts. Therefore, we are ready to provide the SEC with technologies for monitoring and analyzing smart contracts”, explained the co-founder and CEO of AnChain.AI Victor Fang.

The news about the SEC and AnChain partnership came shortly after the newly appointed chairman of the US Securities Commission, Gary Gensler said in an interview with the Wall Street Journal that the decentralized nature of DeFi projects could lead to them falling into the scope of SEC regulation. Also in an interview, Gary Gensler warned about increased regulation of the DeFi sphere.

Earlier, in a conversation with DeFiWatch founder Chris Black on The Defiant’s YouTube channel, SEC Commissioner Hester Pierce expressed the opinion that only complete decentralization of DeFi projects is the only way to avoid regulation.

One of the largest investment holdings and financial services providers in the United States, Morgan Stanley, owns a total of 928,051 shares of the Grayscale Bitcoin Trust (GBTC) investment fund with a total value of $27,665,200.31, according to a recent report of the US SEC.

Several funds of the bank invested in GBTC shares at once. The largest investment in Grayscale for several months was carried out by the Morgan Stanley Insight Fund. In addition, other divisions and structures of the investment bank — Morgan Stanley Institutional Fund and Morgan Stanley Variable Insurance Fund — invested in Bitcoin through GBTC shares.

One of the first major investments of Morgan Stanley in cryptocurrencies was noticed by a financial analyst on Twitter with the nickname MacroScope. He compared the indicators of a recent report to the SEC from Morgan Stanley and noted that investments in cryptocurrencies of Morgan Stanley funds have increased significantly over the past few months.

According to financial reports provided to the SEC, investments in cryptocurrencies can reach up to 25% of assets managed by Morgan Stanley.

Grayscale is one of the largest funds investing in digital assets, which allows accredited US investors from the stock market to invest in cryptocurrencies in a regulated environment through traditional market instruments — bitcoin trusts (Grayscale Bitcoin Trust — GBTC) and futures contracts with a cash settlement.

Grayscale Bitcoin Trust is a replacement for exchange-traded funds (ETFs). Given that there is still no authorized platform for trading cryptocurrency ETFs in the United States, GBTC is the only legitimate option for investing in cryptocurrencies for traditional investors from the United States.

Ripple has filed an application demanding to disclose information about the operations of employees of the US Securities and Exchange Commission with Bitcoin, Ether, and XRP tokens.

According to the statement provided by lawyer James Filan, the defendant (Ripple) demands to issue:

anonymous documents reflecting pre-settlement decisions regarding trading XRP, Bitcoin, Ethereum.

In addition, the lawsuit mentions applications related to the ownership of XRP tokens by SEC employees:

Ripple requires to provide certificates confirming the ownership of XRP tokens by SEC employees, the application says.

Ripple stressed that in response to the company’s previous requests, the SEC refused to disclose any information necessary to understand the Commission’s attitude to digital assets and whether the SEC allowed its employees to trade cryptocurrencies that are the subject of a dispute between the SEC and Ripple.

Earlier in June, the court granted Ripple’s claim to the SEC with a requirement for the regulator to develop a trade policy for digital assets in the United States.

Ripple pointed out that in the SEC’s “Ethics Recommendations for Digital Assets” document, the Commission did not consider digital assets as securities until January 19, 2018, so its employees “could freely buy, sell and hold XRP without any restrictions from the SEC”.

The company also noted that BTC, ETH, and XRP have never appeared on the SEC’s list of “prohibited assets for ownership”. XRP was added to the “watch list” created by the SEC to monitor assets subject to individual verification, but not a complete ban, after April 13, 2018.

The Commission must respond to Ripple’s request by September 3.

This week, Coindesk reported that one of the largest international financial conglomerates, Citigroup, plans to launch Bitcoin futures trading amid the growing demand of the bank’s customers for digital assets.

According to sources close to this issue, Citigroup has already applied and is awaiting approval from US regulators to start trading Bitcoin futures contracts on the Chicago Mercantile Exchange (CME).

Journalists report that Bitcoin futures contracts will be offered primarily to Citigroup’s institutional clients. The representative of the bank also clarified that the bank monitors the interests of its clients who show a desire to invest in digital assets.

“At the moment, we are considering futures for some of our institutional clients”, Citigroup said.

According to the sources of the publication, Citigroup is recruiting employees in the London division, which specializes in trading digital assets.

It is assumed that the bank will first receive a license to trade Bitcoin futures contracts on CME, and then — exchange notes ETN.

At the moment, Citigroup owns assets worth $23.7 trillion.