Round 2: VanEck-SolidX Bitcoin ETF Proposal Is Resubmitted by Cboe


On Thursday (January 31st), Cboe resubmitted the VanEck-Solid Bitcoin ETF rule change proposal (which had been temporarily withdrawn on January 23rd). In this article, we take a closer look and examine what this means.

The U.S. Securities and Exchange Commission (SEC) announced on January 23rd that Cboe BZX Exchange (“BZX”), which was going to be the exchange that would list the VanEck-SolidX Bitcoin ETF if it got approved, had withdrawn the proposed rule change. The SEC’s notice said that BZX had withdrawn the “Proposed Rule Change to List and Trade Shares of SolidX Bitcoin Shares Issued by the VanEck SolidX Bitcoin Trust“, and that this proposal (SR-CboeBZX-2018- 040) had been withdrawn on Tuesday (January 22nd). Had Cboe not withdrawn its proposal, the SEC would have had to make a final decision by February 27th.

This is how Gabor Gurbacs, digital asset strategist/director at VanEck/MVIS, announced the news on Twitter:

VanEck’s founder and CEO Jan van Eck went on CNBC the same day to talk about the reason for the withdrawal of their Bitcoin ETF proposal, and this is what he said during that interview:

Technically, the SEC is affected by the shutdown. So, we were engaged in discussion with the SEC about the Bitcoin-related issues—custody, market manipulation, prices—and that had to stop, and so instead of trying to slip through or something, we just had the application pulled, and we will re-file and re-engage in the discussions when the SEC gets going again.”

The “shutdown” that he was talking about was, of course, the U.S. government shutdown that had begun on 22 December 2018.  

Shortly following that announcement on January 23rd, American lawyer Jake Chervinsky, who is highly-respected in the crypto community for his excellent commentaries on how U.S. securities laws affect companies that deal with cryptoassets, took to Twitter to explain what had happened.

Chervinsky also explained what would happen if this proposal got re-filed:

Well, the U.S. government shutdown thankfully ended on January 25th, 35 days after it had started.

And now, Cboe, VanEck, and SolidX are back for round two. This is the tweet sent out by Gurbacs at 18:44 UTC on January 31st:

If we take a look at the link to the rule filing helpfully provided in Gurbacs’ tweet, we find out that Cboe’s Assistant General Counsel Kyle Murray filed rule change proposal SR-2019-004 on January 30th. Here is the abbreviated description of the proposal:

“The Exchange proposes a rule change to list and trade shares of SolidX Bitcoin Shares issued by the VanEck SolidX Bitcoin Trust, under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares.”

What Cboe, VanEck, and SolidX have done is quite smart. Even if the U.S. government shutdown had not occurred, given SEC Chairman Jay Clayton’s attitude towards Bitcoin markets, their Bitcoin ETF proposal would probably have been disapproved. By withdrawing their proposal and resubmitting now, once it is published in the Federal Register, the SEC will have another 240 days (maximum) to make a decision, which means that this Bitcoin ETF proposal will have a much better chance of getting approved (although still not a sure thing by any means) than if they had simply waited for the February 27th deadline to come.

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New York Financial Regulators Grant BitLicense to Bitcoin ATM Operator

The New York State Department of Financial Services (NYDFS) has granted a virtual currency license, or BitLicense, to Cottonwood Vending LLC, according to an official tweet on Jan. 31.

Cottonwood Vending is a Bitcoin (BTC) ATM operator with terminals in New York City and the surrounding area. According to the tweet, the granting of such licenses “continues to advance responsible innovation in New York’s fintech industry.”

Bitcoin ATMs, or BTMs, are touchscreen kiosks that enable users to deposit cash and either buy Bitcoin, or to scan their mobile wallet, sell their crypto, and withdraw cash. Sales and purchases sync automatically to users’ mobile wallets.

In November 2018, NYDFS granted a Bitlicense to another BTM operator, Coinsource. NYDFS said in a press release that its decision followed a comprehensive and thorough review of Coinsource’s application and subjects the firm to significant regulatory conditions.

BitLicenses were introduced by NYDFS in July of 2014 by  Benjamin Lawsky, New York’s first Superintendent of Financial Services. The acquisition of such a license is seen by many in the cryptocurrency and blockchain spheres as a necessary step to conducting business in the state.

Firms that receive such a license are subject to certain anti-money laundering (AML) standards and counter-terrorism financing standards. Other requirements include background checks on all employees, and records of transactions must be kept for 10 years.

Various companies in the crypto space have sought and received BitLicenses from NYDFS. In July 2018, global crypto payments processor BitPay was granted a BitLicense. At the time, BitPay CEO Stephen Pair said:

“New York state has one of the strictest policies around businesses involved in cryptocurrency and working through the approval processes to obtain a License was important to BitPay. We believe this hard work will pay off as New York presents significant business opportunities for BitPay.”

CBOE Re-Applies With US SEC to List Bitcoin Exchange-Traded Fund

The Chicago Board Options Exchange’s (CBOE), along with investment firm VanEck and financial services company SolidX, has re-applied with the United States Securities and Exchange Commission (SEC) for a rule change to list a Bitcoin (BTC) exchange-traded fund (ETF). VanEck digital asset strategy director Gabor Gurbacs announced the public filing on Jan. 31.

CBOE had initially withdrawn its request for a rule change to list a Bitcoin ETF on Jan. 23. A CBOE spokesperson told Cointelegraph that the decision to withdraw its request was the result of the U.S. government shutdown as the end of the review period approached. Some legal experts noted at the time that the SEC was operating on a limited basis due the shutdown, which was the result of a political impasse over a proposed wall on the U.S.–Mexico border.

ETFs are securities that track a basket of assets proportionately represented in the fund’s shares. They are seen by some as a potential step forward for the mass adoption of cryptocurrencies as a regulated and passive investment instrument.

Johnny Depp-Linked ‘Crypto-Netflix’ Signs New Indie Producers

johnny depp Altcoins

Johnny Depp-Linked ‘Crypto-Netflix’ Signs New Indie Producers

TaTaTu, the $575 million dollar cryptocurrency entertainment platform, has signed content agreements with three independent film production companies. This will see the platform, which has a development deal with Johnny Depp, add 50+ new movie and television titles.

Big Fish

As announced by The Hollywood Reporter, TaTaTu has signed content licensing agreements with Lakeshore Entertainment, Kew Media Group, and FilmFour. This gives a significant boost to the platform’s offering, adding some of the most valuable libraries in the independent space.

The deals cover over 50 movies and TV shows, featuring a stellar line-up of talent. TaTaTu users will now be able to watch the likes of Jeff Bridges, Scarlett Johansson, Daniel Craig, Tilda Swinton, Anthony Hopkins, Liam Neeson, Winona Ryder, Tommy Lee Jones, and Kristen Stewart, in titles such as Heathers, The Amateurs, Hotel Splendide, The War Zone, and the Children of the Corn trilogy.

Company founder, movie producer, and entrepreneur, Andrea Iervolino, explained his approach:

Our aggressive acquisition strategy is making TaTaTu one of the largest AVOD platforms for content in the world

Little Fish

The platform launched in early 2018, raising $575 million in a private ICO sale. This made it the third biggest ICO to date, behind only EOS and Telegram. While this is clearly a serious amount of money, TaTaTu is still a little fish in the entertainment industry pond.

Its library cannot compete with giants like Netflix, who spend $100 million just securing the rights to Friends each year. So Iervolino is currently focussing on quality over quantity, targeting high-caliber movies and shows, and steadily building the library.

Independent Film's ICO says Goodbye to Hollywood

Another key difference with Netflix is that all-important ‘A’ in front of the ‘VOD’. TaTaTu is an advertising-supported ‘video-on-demand’ platform, meaning users do not have to pay a subscription fee. In fact, users get paid in TTU tokens 00 for watching content and even sharing recommendations with others.

Advertisers can only pay for advertising space with TTU tokens, which are then divided between content providers and viewers. Users can then spend these tokens in the TaTaTu e-commerce store, or sell them on the open market, to advertisers wishing to buy more ad space.

Cardboard Box

TaTaTu has also been busy, using its startup funding to strike deals for original content, and extending the utility of the TTU token. Aside from the Johnny Depp development deal, it has also struck deals with movie financier, Bondit Media Capital, and TV rights and services company, Fintage House.

This means TTU tokens are now recognized and accepted for financing certain motion pictures and funding specific management and rights deals. So technically, watching movies can now buy you an executive producer role. You can sign us up to that.

Will digital tokens become a thing in Hollywood? Share your thoughts below!

Images courtesy of Shutterstock

Cryptocurrency Scam Alert: Mac Exchange Users Targeted

Reports by a cyber security firm claim to have identified a piece of malware designed to beat the two-factor authentication commonly used to help protect various online accounts. The software steals credentials, including browser cookies, to allow access to cryptocurrency exchange accounts. CookieMiner, as the malware is known, targets exclusively Mac users owing to the cross-device functionality of Apple’s products.

In addition to stealing login details and creatively subverting security precautions, the CookieMiner malware also uses the victim’s machine to covertly mine an obscure digital asset called Koto.

Mac Users Beware: CookieMiner Malware Puts Cryptocurrency Traders at Risk

According to research conducted by Palo Alto Networks, a new piece of malware is targeting Mac users. The cyber security firm have nicknamed the attack “CookieMiner”. This is because the software steals cookies from a victim’s infected machine, along with covertly mining cryptocurrency to enrich those behind the scam – known as cryptojacking.

Since cryptocurrency exchanges use multiple layers of security precautions,  a series of different steps are taken to gain access to accounts:

  • Google Chrome and Apple Safari cookies are stolen.
  • Saved usernames and credit card information from Chrome are stolen.
  • Text messages backed up to Mac are stolen from victims’ iPhone.
  • Browser cookies are stolen to defeat login anomaly detection.

CookieMiner’s primary purpose is to gain access to Mac users’ accounts at popular digital currency exchanges. However, since exchanges make use of heightened security procedures when users login, their credentials alone are not usually enough to compromise an account. That is why CookieMiner also attempts to trick the exchanges’ automated account protection procedures by also stealing browser cookies. These are used to ensure that the device used to sign in is not flagged as suspicious, even though the account’s owner will never have used that device before.

Cyber criminals are getting increasingly creative when it comes to stealing cryptocurrency.

With this combination of login credentials and cookies, attackers can often bypass the two-factor authentication process protecting accounts. This gives them full access to any cryptocurrency the victim has stored at the compromised exchange account.

CookieMiner Also Mines Cryptocurrency on Behalf of its Victims

Since the malware provides no guarantees of revenue for those behind it, CookieMiner also installs mining software on the infected machine. Palo Alto Networks claim that the program is made to look like a piece of Monero-mining software. However, instead of mining the most frequently cryptojacked asset, it sets Mac users’ machine mining Koto, another privacy-focused cryptocurrency associated with Japan that can be mined using just a CPU.

Of course, this is hardly the first example of cryptojacking NewsBTC has reported on. Previous example have included efforts by North Korean hackers to earn revenue outside of typical international trade, which the rogue nation is largely excluded from. There is, however, no evidence as of yet to suggest that the CookieMiner attack is related to these past examples.


Related Reading: Security Firm Avast Demonstrates Cryptojacking Risks to Smartphones and IoT Devices

Featured Images from Shutterstock.

Seoul City Gov’t Launches ‘Blockchain Governance Team’ for State Services

The Seoul Metropolitan Government has launched the Seoul Blockchain Governance Team to explore the benefits of blockchain in administrative services, Yonhap News reports Jan. 31.

According to the report, the members of the team are researching the potential of blockchain applications in various government services, including online voting system.

Specifically, the working group intends to address systems of integrated management, digital document verification and automatic sub-contract payment.

The team consists of 100 employees between the ages of 21 and 77, including developers, association executives, project makers, corporate representatives as well as students, Yonhap reports.

Earlier today, Cointelegraph reported that South Korea will continue to ban initial coin offerings (ICOs) in the domestic market. The country’s financial regulator the Financial Services Commission claimed that ICOs were making use of foreign jurisdictions, but still raising funds from South Korean residents.

Recently, South Korean fintech firm BxB launched reportedly the first stablecoin pegged to the Korean won. The cryptocurrency, KRWb, is allegedly pegged to the national currency at a 1:1 ratio, with tokens available to any user worldwide via an ERC-20 compatible service.

UAE and Saudi Arabia Announce Joint cryptocurrency ‘Aber’

UAE and Saudi Arabia Announce Joint cryptocurrency ‘Aber’

The UAE and Saudi Arabian governments have revealed Aber, their joint Cryptocurrency which will soon begin its trial run in a number of selected banks in both countries. The announcement was published by Saudi Arabian Monetary Authority, January 29, 2019.

Introducing ‘Aber’

A January 29, 2019, statement has shed some more light on the cryptocurrency that is being developed as a collaboration between the UAE and Saudi Arabia. One of the first details is the name of the project which is to be called ‘Aber’.

The statement, which was released by the United Arab Emirates’ (UAE) central bank (UAECB) and the Saudi Arabian Monetary Authority (SAMA), also explained how the currency would be used. Aber will be limited to financial settlements using blockchain technology by a selected few banks in both the UAE and Saudi Arabia on a trial basis.

The new cryptocurrency will also be based on Proof-of-work which is aimed at, according to the statement:

“…studying the dimensions of modern technologies and their feasibility through practical application and the determination of their impact on the improvement and the reduction of remittances costs and the assessment of technical risks and how to deal with them.”

There is no current release date but should no technical or legal issues abound, the two countries will be looking into the economic and legal requirements for expanded use.

The decision to launch Aber by the two countries was inspired by a number of other nations that whose central banks have also experimented with blockchain. The countries, however, decided to launch Aber jointly rather than separately due to their history together.

“The two countries have in place central systems for remittances and domestic transactions which have evolved overtime and proved their feasibility,”

While domestic remittances have been well developed in both countries, international remittances still need to be improved upon and the respective governments are hoping the blockchain is the answer. The blockchain is also being considered as an additional reserve system for domestic central payments settlement system.

The early stages of the use of Aber will focus on its technical aspects as it is used in the selected banks. Should this trial run be successful, more application can be expected.

Project History

The then-unnamed project was first unveiled on January 19, 2019, at the Executive Committee of the Saudi-Emirati Coordination Council in a meeting held in Abu Dhabi where a total of seven strategic initiatives were unveiled.

However, the government of the UAE has been in talks with the Saudi Arabian government since December about a joint National Cryptocurrency.

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1-Month Left of Funding: Hack and Crypto Winter Deal NEM a Major Blow

The current bear market, or Crypto Winter as it is often referred to, has forced many solid projects to lay off employees and take a good hard look at their operational expenses and cash flow in order to make necessary changes to survive.

One particular cryptocurrency had an especially bad year, and due to the impact of an extremely high-profile exchange hack and the arduous bear market, the development team supporting the project is down to their final month of funding, and are throwing a Hail Mary in order to survive.

NEM Foundation: “One Month Left in Funding”

In a “message to the community” posted by the NEM Foundation on the project developer’s official forum, the team behind the NEM cryptocurrency revealed they were “facing challenging budget decisions.”

According to the post, the NEM Foundation team has been meeting a few times per week since December after the bear market reached new lows. The NEM Foundation devised a major restructuring of their C-level executive team, and required individual teams to begin reporting into the new executive structure with an added focus on “reporting metrics and delivering ROI.”

The NEM Foundation further explained that they were faced with the difficult reality of “having one month left in funding,” and would be forced to “put everything on hold,” and wouldn’t be able to “support” the team’s current “headcount,” suggesting that layoffs are looming.

Related Reading | Crypto Exchanges Begin to Shutdown: Bear Market in Full Force

The NEM Foundation has a plan, though. They are proposing a new budget based on a reduced burn rate. The team claims that it will allow them to “deliver ambitious results with responsible use of reserves.”

“We are in a tough spot like many others in this space. It is our duty to act quickly to ensure the longevity of the NEM Foundation ecosystem and development,” the message revealed.

The NEM Foundation remains steadfast in their belief that they “can solve this.”

NEM Begins 2018 in Top Ten Crypto, Falls From Grace After Hack

Like the NEM Foundation, many others have suffered during the bear market. Ethereum-focused blockchain startup incubator ConsenSys and even the billion-dollar Bitmain were forced to lay off staff as a result of revenue streams drying up.

However, NEM was hit especially hard during the 2018 bear market, and its extension into 2019 could deal a death blow to the project.

The fall from grace began after Japanese cryptocurrency exchange Coincheck was hacked, losing a record $530 million in NEM tokens. The theft is the largest the industry has ever experienced, and set off a chain reaction of regulatory changes following the country’s Financial Services Agency taking a closer look into exchanges in the region.

Related Reading | Japan’s FSA Raids Coincheck Offices Following $500 Million Hack

According to a historical snapshot from CoinMarketCap from mid-January of last year, NEM ranked #7 in the top 100 cryptocurrencies by market cap, with a price of $1.07. Another snapshot taken just one month later shows the cryptocurrency had fallen out of the top ten with a price of $0.39. However, it’s worth noting that most cryptocurrencies fell significantly that February.

Today, NEM has fallen 96% to $0.04 and is at risk of its development team running out of funding. While the percentage decline is typical of most cryptocurrencies, NEM was hit particularly hard due to the Coincheck hack that set the tone for the future of the cryptocurrency.