The first widely available bitcoin mutual fund is now available for investors who don’t want to buy the coin itself

Bitcoin golden physical coin illustration on US dollar banknotes.
  • A new mutual fund by ProFunds will allow traders to invest in bitcoin without buying the asset itself.
  • The Bitcoin Strategy ProFund is the first publicly available mutual fund in the US that invests in bitcoin futures contracts.
  • ProFunds said the fund eliminates the need for investors to hold their bitcoin through exchanges or wallets.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

A new mutual fund will allow traders to invest in bitcoin without going through the process of buying the asset itself.

ProFunds on Wednesday launched Bitcoin Strategy ProFund, the first publicly available bitcoin mutual fund in the US, which invests in bitcoin futures contracts. It does not invest directly in bitcoin.

The fund aims to track the performance of the world’s largest digital asset before fees and expenses.

The Maryland-based firm said the new fund eliminates the need for investors to hold their bitcoin through exchanges or wallets and gives them a more convenient way to diversify their portfolios with bitcoin.

“Compared to directly buying bitcoin … ProFund offers investors the opportunity to gain exposure to bitcoin through a form and investment method that tens of millions of investors are familiar with,” company CEO Michael L. Sapir said in a statement.

ProFunds investment vehicle arrives as a wave of financial firms are applying with the Securities and Exchange Commission for approval of a bitcoin ETF.

Currently, there are more than 10 bitcoin ETF applications waiting on the go-ahead from the SEC. The agency has been delaying the approval process, and has maintained that it is “appropriate” to take more time to consider risks and nuances of introducing such a product to the market.

Countries in Europe, as well as Canada and Brazil, already have bitcoin funds available to investors.

Read the original article on Business Insider

The SEC is reportedly looking into conflicts of interest among major banks in the SPAC deal-making process

The headquarters of the U.S. Securities and Exchange Commission (SEC) are seen in Washington, July 6, 2009. REUTERS/Jim Bourg
The headquarters of the U.S. Securities and Exchange Commission are seen in Washington

  • The SEC is investigating banks over conflicts of interest in the SPAC deal-making process, Reuters first reported.
  • In particular, the regulator is looking into instances of banks acting as underwriter and adviser on the same deal.
  • The SEC has requested information from top SPAC underwriters including Morgan Stanley and Goldman Sachs.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The US Securities and Exchange Commission is investigating major banks over conflicts of interest in the SPAC deal-making process that exploded in the past year, Reuters first reported.

In particular, the regulator is looking into instances wherein the banks acted both as the underwriters and the advisers on the same SPAC deal and whether certain fee structures may have incentivized underwriters to secure unsuitable mergers, sources told Reuters.

“The big issue for the SEC is to understand if the advisers are conflicted,” one of the sources told Reuters.

The SEC, according to sources, has requested information from top SPAC underwriters including Citigroup, Credit Suisse, Morgan Stanley, and Goldman Sachs. Requests do not imply malpractice.

SPACs are shell companies that list with the aim of merging with private companies and taking them public.

This method is typically done in lieu of an IPO or a direct listing and has garnered support from Wall Street heavyweights as well as pop icons and professional athletes.

Management teams of SPACs, also known as sponsors, generally pay banks a 5.5% fee for underwriting the process. Banks, however, can earn more if they also represent the merger target.

Such conflict of interest could harm investors, sources told Reuters.

Under the current law, banks are not required to disclose their fees in regulatory filings while law and accounting firms are.

SPACs have exploded in popularity in the last year. In 2020, a total of 248 SPACs raised $83.3 billion according to SPAC Analytics. But over halfway through 2021 alone, data already show 368 SPACs that have raised $190 billion, comprising 59% of initial public offerings.

Read the original article on Business Insider

Bitcoin is unlikely to face any new SEC rules this year, based on the watchdog’s work plan

Gary Gensler, SEC Chairman, financial regulator, alone, testifying
Gary Gensler’s SEC has increased its focus on cryptocurrencies.

  • The SEC has released its rulemaking agenda for the year – and bitcoin isn’t on there.
  • Cryptocurrencies fall into something of a regulatory grey area, SEC chief Gary Gensler has said.
  • Congress needs to take the lead in regulating bitcoin and crypto exchanges, according to Gensler.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The US markets regulator has released its agenda for the year – and bitcoin isn’t on there.

Regulators at the Securities and Exchange Commission will be focused on short-selling, special purpose acquisition companies or SPACs, and the “gamification” of retail investing, among other topics.

But the SEC is not planning any new rules on cryptocurrencies, according to its agenda, released Friday, despite signs that it is keeping a close eye on bitcoin and other digital tokens.

SEC boss Gary Gensler has said that investors in cryptocurrencies need more protection, given that the crypto world is currently largely unregulated.

Yet he has also said that cryptocurrencies fall into something of a grey regulatory area. One issue is that the SEC makes rules for securities, but does not consider bitcoin to be one.

The SEC chairman in May pushed Congress to kick off the process of creating regulations for cryptocurrencies and crypto exchanges.

“There’s a lot of authority that the SEC currently has in the securities space, and there are a number of cryptocurrencies that fall within that jurisdiction,” Gensler told lawmakers.

“But there are some areas, particularly bitcoin-trading on large exchanges, that the public is not currently really protected.”

However, the SEC has been keeping close tabs on bitcoin and cryptocurrencies. It has warned of the dangers of investing in funds that focus on bitcoin futures, for example, and Gensler has spoken publicly about crypto assets several times.

And there are signs that lawmakers themselves are beginning to take digital currencies more seriously. Senator Elizabeth Warren last week called for a crackdown on “environmentally wasteful cryptocurrencies” like bitcoin in order to help fight the climate crisis.

Even though bitcoin doesn’t feature on the SEC’s rulemaking agenda, the markets regulator’s planned focus on “gamification” could touch upon cryptocurrencies, which retail investors trade on platforms such as Robinhood.

Read the original article on Business Insider

SEC tells investors to be wary of bitcoin futures due to volatility and fraud, as regulators ramp up crypto scrutiny

GettyImages 175048059
Gary Gensler heads the Securities and Exchange Commission.

  • The SEC warned investors over bitcoin futures, saying the cryptocurrency is volatile and speculative.
  • It also said the market lacked regulation and had the potential for fraud and manipulation.
  • Regulators around the world are stepping up their scrutiny of the market as bitcoin booms.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The US market regulator has warned investors about investing in funds with exposure to bitcoin futures, saying the market is volatile, unregulated and has the potential for fraud.

The Securities and Exchange Commission released a notice on Thursday urging those considering bitcoin futures funds “to weigh carefully the potential risks and benefits of the investment.” The notice was issued with the Commodity Futures Trading Commission.

“Among other things, investors should understand that bitcoin, including gaining exposure through the bitcoin futures market, is a highly speculative investment,” it said.

“As such, investors should consider the volatility of bitcoin and the bitcoin futures market, as well as the lack of regulation and potential for fraud or manipulation in the underlying bitcoin market.” Futures are contracts that allow people to speculate on the future bitcoin price.

Regulators are stepping up their focus on bitcoin and other cryptocurrencies, which boomed in the first five months of the year before falling sharply in May.

Bitcoin traded at around $37,500 on Friday, around 42% below April’s record high, giving a sense of the volatility of the asset. Heightened scrutiny from Chinese regulators is one factor in bitcoin’s recent decline.

The SEC’s warning followed the suggestion from the top global banking regulator for tough new rules for financial institutions that have exposure to bitcoin.

Rule-makers and central banks have been warning for months about the dangers of cryptocurrencies because of growing concern that investors could get burnt in the bitcoin boom.

Analysts have said that the SEC’s concerns about the dangers of bitcoin investments make it unlikely that the regulator will approve crypto exchange-traded funds any time soon.

Osprey Funds founder Greg King told CNBC on Monday he thinks a bitcoin ETF in the US could come in 2022.

King, who plans to launch a bitcoin ETF in the US, said: “Personally, I think if something happens, it’s more likely in 2022. It’s just really getting going. These things take time.”

Read the original article on Business Insider

A couple has paid a combined $325,000 to settle charges by the SEC that they traded shares in a biotech company before clinical trial results were public

FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011.   REUTERS/Jonathan Ernst
FILE PHOTO: SEC

  • A New York couple has agreed to pay more than $325,000 to settle charges of insider trading in the stock of a biotech company, the SEC said.
  • The SEC said that a senior project manager told her partner about failed clinical trial results.
  • The partner sold his stock in the company before the trial results were made public, avoiding losses of $103,875.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

A New York-based couple has agreed to pay more than $325,000 to settle charges of insider trading in the stock of a biotech company where one of them was employed, the US Securities and Exchange commission said on Monday.

Holly Hand was the senior project manager overseeing a clinical drug trial for a company formerly known as Neuralstem. The SEC alleges that in July 2017, Hand learned of failed clinical trial results and tipped off her partner, Chad Calice, who then sold all of his Neuralstem stock ahead of the public announcement of the negative news.

According to the SEC’s complaint, Neuralstem stock dropped roughly 50% the morning the news was announced. Calice avoided losses of $103,875. He also tipped off his uncle, who avoided losses of $14,434 by selling before the news, the SEC said.

Calice and Hand were in frequent communication about Neuralstem’s stock price throughout the day that he sold his stock, the SEC said. Calice reinvested in the company the day after the announcement, buying 4,000 shares at $2.82 apiece, below the range of $5.45 and $6 at which he sold the stock.

The SEC’s complaint, which was filed in federal district court in Manhattan, charges Calice and Hand with violating the antifraud provisions of the federal securities laws. Calice and Hand didn’t admit or deny the allegations. They consented to the entry of a final judgment that enjoins them from violating the charged provisions and requires each of them to pay a civil penalty, the SEC said.

Neuralstem changed its name to Seneca Biopharma Inc. in 2019 and merged with Leading BioSciences Inc. in April to become Palisade Bio Inc.

Read the original article on Business Insider

The SEC told Tesla twice that Elon Musk’s tweets violated court orders requiring preapproval from company lawyers

Elon Musk looking at his iPhone .JPG
Tesla CEO Elon Musk looks at his mobile phone.

  • The SEC told Tesla that Elon Musk twice violated court orders regarding his Twitter use, The Wall Street Journal reported.
  • A 2018 settlement between Musk, Tesla, and the SEC required Tesla lawyers to preapprove tweets by Musk about the business.
  • Musk’s tweets about Tesls’s solar roof production and stock price violated that order, the SEC reportedly told the company.
  • See more stories on Insider’s business page.

The Securities and Exchange Commission told Tesla last year that CEO Elon Musk twice violated a court order requiring the company to preapprove his tweets, The Wall Street Journal reported Tuesday.

In 2018, Musk and Tesla reached an agreement with the SEC to settle charges that Musk had committed fraud by tweeting that he had secured funding to take Tesla private, when in fact he had not. As part of that settlement, Musk and Tesla each paid $20 million and agreed to have Tesla lawyers review Musk’s social media posts in advance.

But according to The Journal, the SEC wrote to Tesla in 2019 and 2020 to tell the company that two of Musk’s tweets – concerning the company’s solar roof production levels and its stock price – had violated the court order.

Tesla told the agency that the two tweets were “wholly aspirational” and a “personal opinion” expressed by Musk, respectively, and therefore didn’t require pre-approval, according to The Journal.

“In the face of Mr. Musk’s repeated refusals to submit his covered written communications on Twitter to Tesla for pre-approval, we are very concerned by Tesla’s repeated determinations that there have been no policy violations because of purported carve-outs,” the SEC wrote in response, The Journal reported.

Tesla did not respond to a request for comment on this story.

Tesla’s oversight regarding Musk’s tweets has repeatedly drawn the ire of the SEC. The agency accused Tesla as early as February 2019 of violating the court order, that time about Tesla’s promise to build 500,000 cars by the end of the year, leading the court to order the two parties to agree on which topics required pre-approval.

Musk has also sparred with other regulatory agencies that have sought to rein in behavior by the company, including restarting operations at a California warehouse in violation of local pandemic lockdown orders, disputes with the National Transportation Safety Board over a fatal crash involving a Tesla, and avoiding workplace safety regulations in Nevada.

Read the original article on Business Insider

Bitcoin ETFs from Fidelity and Skybridge Capital are under review by the SEC

Anthony Scaramucci
Anthony Scaramucci’s SkyBridge Capital is waiting on SEC approval of a bitcoin ETF.

  • Bitcoin exchange-traded fund applications from Fidelity and SkyBridge Capital are under review by the Securities and Exchange Commission.
  • The SEC is currently looking at four other applications to launch bitcoin exchange-traded funds.
  • A decision on asset manager VanEck’s application is expected in June.
  • See more stories on Insider’s business page.

The Securities and Exchange Commission is reviewing applications for bitcoin exchange-traded funds filed by Fidelity and SkyBridge Capital, the hedge fund founded by Anthony Scaramucci.

The SEC is examining a request from Fidelity Investments to launch the Wise Origin Bitcoin Trust, according to a filing dated May 25, and it is looking at SkyBridge’s petition to start the First Trust SkyBridge Bitcoin ETF Trust, according to paperwork dated May 21.

The moves expand on the regulatory agency’s review of other potential bitcoin ETFs. The US has yet to approve a cryptocurrency-based ETF. Money management firms are seeking to capture potential gains from exposure to bitcoin, which has been pulling in more interest and activity from institutional and retail investors and companies.

Scaramucci’s SkyBridge is working with investment firm First Trust Advisors on the ETF project and in March filed for regulatory approval. If greenlighted, the ETF would trade on the New York Stock Exchange Arca, which specializes in exchange-traded listings.

Fidelity also in March submitted paperwork to launch a bitcoin ETF to track the digital currency’s performance. If that wins SEC approval, shares of the Wise Origin Bitcoin Trust would trade on Cboe Global Markets.

Investors are waiting to hear from the SEC if it will grant clearance for bitcoin ETFs from Kryptoin, Valkyrie, WisdomTree, and VanEck. Applications for about 10 others ETFs are pending, according to CoinDesk.

The SEC in late April said it expected to release its ruling on VanEck’s application on June 17. The agency said it was delaying the decision to take an “appropriate” amount of time for the review. A review period can be extended for up to 240 days.

Read more: A crypto expert shares the top tips to pick worthwhile NFTs in a landscape littered with scams – including how to avoid getting caught up in Reddit-fueled hype that can cost you millions of dollars.

Read the original article on Business Insider

S&P Dow Jones Indices to pay $9 million to SEC over its role in the collapse of a volatility-trading vehicle

2021 05 13T165943Z_1570723852_RC2JEN9ZQI2I_RTRMADP_3_USA LEGAL.JPG
  • S&P Dow Jones Indices will pay the SEC a $9 million fine as part of a settlement agreement.
  • The SEC claimed negligence on behalf of S&P DJI for how it managed an index that underpinned a Credit Suisse volatility-trading product.
  • The company, a division of the S&P Global, said it neither admits nor denies the SEC’s allegations.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

S&P Dow Jones Indices will pay a $9 million fine to the US Securities and Exchange Commission as part of a settlement agreement.

The SEC claimed negligence on the behalf of S&P DJI for how it managed one of its indexes that underpinned a Credit Suisse volatility-trading product during a time of severe price swings.

According to the SEC, the S&P DJI should have disclosed that its S&P 500 VIX Short Term Futures Index ER had an “auto hold” feature that caused its value to remain static for more than an hour on Feb. 5, 2018. Meanwhile, the VIX was spiked as much as 115% between 4:00 p.m. and 5:08 p.m.

The static data, according to the SEC, contributed to a 96% slide in the value of Credit Suisse’s VelocityShares Daily Inverse VIX Short-Term ETN – also known as XIV – which was dependent on the S&P DJI index. That collapse cost investors an estimated $1.8 billion.

S&P DJI in a statement agreed to pay the penalty and to cease and desist from committing any future violations. But it neither admitted nor denied the SEC’s allegations.

“When index providers license their indices for the issuance of securities, as S&P DJI did here, they must ensure that the disclosure of critical features of their products, as well as the publication of real-time values, are accurate,” Daniel Michael, chief of the SEC enforcement division’s complex financial instruments unit, said in a statement.

The downfall of XIV showed the risks of shorting volatility, which had become a wildly popular – and profitable – trade at the time as markets sat placid for months. On Feb. 5, 2018, however, the VIX saw it’s fourth-biggest spike on record, squeezing out many of those short-sellers.

Read the original article on Business Insider

New rules could tackle the ‘gamification’ of trading on popular apps following GameStop, SEC chief Gary Gensler says

AP333575799267
Gary Gensler is the new head of the Securities and Exchange Commission.

New rules may be needed to tackle the “gamification” of trading on popular apps, which can prompt users to make bad investing decisions, according to the new head of the Securities and Exchange Commission.

Gary Gensler said in written testimony to Congress on Wednesday that many of the US’s regulations on trading were created before fast and commission-free apps started to dominate the retail investing landscape.

In particular, Gensler expressed concern about the “gamification” of retail trading. Apps are increasingly using features like points, rewards, leaderboards, bonuses and competitions to boost user engagement, he said.

Gensler is set to appear before the House Committee on Financial Services on Thursday, as part of its investigation into January’s GameStop saga, which saw retail traders unite to pump up the video game store’s stock.

Some lawmakers have become concerned about the influence of Robinhood, the commission-free trading app that has boomed in popularity and was at the centre of January’s volatility.

The new boss of the SEC – the powerful regulator that oversees US financial markets – said the gamification of trading could be costly to users.

“If we watch a movie that a streaming app recommends and don’t like it, we might lose a couple of hours of our evening,” he said.

“Following the wrong prompt on a trading app, however, could have a substantial effect on a saver’s financial position. A big loss could have immediate implications for the app user’s ability to afford their rent or pay other important bills. A small loss now could compound into a significant loss at retirement.

“Many of these features encourage investors to trade more. Some academic studies suggest more active trading or even day trading results in lower returns for the average trader.”

Gensler said these issues may require new rules. “Many of our regulations were largely written before these recent technologies and communication practices became prevalent. I think we need to evaluate our rules, and we may find that we need to freshen up our rule set.”

The House will begin the third of its hearings into the GameStop saga on Thursday. It is particularly focused on the impact of modern trading apps and the power they can have, after many of them suspended trading and shut out users during January’s market volatility.

Apps like Robinhood argue their popular and easy-to-use platforms have broken down barriers to investing.

Speaking before the House during an earlier part of the hearing in February, Robinhood CEO Vlad Tenev said: “The mobile app provides the intuitive experience customers want, while also providing them with tools and information to learn about investing and keep tabs on their finances.”

Read the original article on Business Insider

A decision on VanEck’s bitcoin ETF has been kicked to June as the SEC says more time to consider first-ever US fund is ‘appropriate’

2021 04 06T120254Z_1_LYNXMPEH350PV_RTROPTP_4_CRYPTO CURRENCY MARKETCAP.JPG
Bitcoin recently hit a record high near $65,000.

  • The Securities and Exchange Commission on Wednesday pushed back the timing on rendering a decision to approve or reject VanEck’s bitcoin ETF.
  • The SEC is aiming to issue a decision in June, giving itself an additional 45 days.
  • Investors are waiting for the approval of the first bitcoin ETF in the US.
  • See more stories on Insider’s business page.

The Securities and Exchange Commission said Wednesday it will delay a decision on whether to approve a bitcoin exchange-traded fund from asset manager VanEck, keeping investors waiting to hear when the US will get its first bitcoin ETF.

The regulator in mid-March acknowledged an application by CBOE Global Markets seeking approval to list shares of VanEck’s bitcoin ETF, starting the clock on a 45-day window to come to a decision.

But the SEC now says it will push back its ruling until June 17.

“The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the comments received,” said J. Matthew DeLesDernier, assistant secretary at the SEC, in a notice Wednesday.

A review period can be extended for up to 240 days.

Bitcoin this month hit a record high near $65,000, coinciding with the public debut of Coinbase, the largest cryptocurrency exchange in the US.

VanEck previously filed for approval of a bitcoin ETF but withdrew the proposal in September 2019.

The SEC last week said it would begin a review of Kryptoin’s application for a bitcoin ETF. Canadian regulators this year have already approved two such funds, as well as an ether ETF.

Read the original article on Business Insider