On Jan. 24, the United States Securities and Exchange Commission (SEC) pushed back its decision on BlackRock’s proposed spot Ethereum exchange-traded fund application (ETF) a day before the deadline, citing the need for more time to review the proposed rule change. While the SEC must make a final decision on BlackRock’s spot Ether (ETH) ETF decision by Aug. 7, Bloomberg ETF analyst Eric Balchunas has predicted a final decision will be made on all pending spot Ether ETFs in May — similar to the way the SEC decided on 10 pending spot Bitcoin (BTC) ETFs in January.
The next day, the SEC also delayed its decision on whether to approve a spot Ether ETF from Grayscale Investments, opening the application to public comments. The SEC said it would institute proceedings to determine whether to approve or disapprove a proposed rule change allowing NYSE Arca to list and trade Grayscale Ethereum Trust shares. Opening the proposed investment vehicle to public comment will push the deadline for a decision by an additional 35 days upon publication in the Federal Register.
The SEC remains one of the most consistently anti-crypto forces in the United States. According to a report from litigation consulting firm Cornerstone Research, the number of crypto-related enforcement cases brought by the SEC in 2023 was the highest since 2013, suggesting that digital assets were a “top priority” for the commission. Of the 46 enforcement actions in 2023, Cornerstone reported the SEC imposed $281 million in monetary penalties for settlements and tripled the number of administrative proceedings from 2022.
FINRA believes that 70% of crypto asset public communications violate the law
In other news, the Financial Industry Regulatory Authority (FINRA) reported that roughly 70% of crypto-related communications from a survey contained “false, exaggerated, promissory, unwarranted or misleading” claims or otherwise violated guidelines on public communications. FINRA reviewed over 500 crypto asset-related retail communications starting in November 2022. According to the regulator, it identified more than 70% of the reviewed communications that had “potential substantive violations” of its rules on communications with the public.
According to the regulator, crypto-related communications could range from a podcast to an ad spot in the Super Bowl. Violations potentially included misleading claims on crypto and misrepresenting how the protections of federal securities laws apply to digital assets. FINRA added that the targeted exam provided crypto firms with questions to consider in their public communications.
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Florida and Alaska revoke Binance.US’s right to operate in their territories
Troubled cryptocurrency exchange Binance.US continues to face pressure from regulators in the U.S. after the former Binance CEO Changpeng Zhao’s guilty plea. Regulators in Florida and Alaska have told Binance.US that the crypto exchange can no longer serve its residents. The Alaska Division of Banking and Securities reportedly denied renewing Binance.US’s license in January 2024. Florida’s Office of Financial Regulation has also issued an emergency suspension order against Binance.US’s money transmitter license. The suspension reportedly came a week after Binance’s founder and former CEO Zhao, also known as CZ, pleaded guilty to violating U.S. Anti-Money Laundering rules on Nov. 21, 2023. In late December, regulators in Arkansas, Illinois and South Dakota reportedly reached an agreement with Binance.US that would allow it to keep operating in those states. As part of that, Binance.US must make the transfer of Zhao’s voting rights irreversible.
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Crypto lender Abra settles with Texan regulators
Crypto lending firm Abra — allegedly insolvent since March 2023 — has entered a settlement in principle with the Texas State Securities Board (TSSB). The company will return assets invested by the state’s citizens. According to the document, Abra “began winding down U.S. retail operations” and will notify clients with more than $10 in their balances so they can withdraw their assets in seven days. The unclaimed assets will be converted to fiat currency and directed to remaining Texas investors.
According to the settlement text, by the time the TSSB filed actions, Abra held $13.6 million of crypto on behalf of more than 12,000 investors in the United States. Only $1.8 million of them were owned by approximately 1,600 Texas residents. The company’s X account has been silent since June 2023. Bill Barhydt confirmed the settlement, emphasizing that Abra “has never (ever) frozen withdrawals for US users” and “voluntarily wound down” the Earn and Boost programs in 2023.
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