Ripple’s done with this

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Disclaimer: All price movements are recorded up to 7:20 PM IST

The markets were in deep red, with Bitcoin hovering below $20,100 and Ethereum reporting sharp slides. Technology-heavy Nasdaq witnessed a selloff but reported marginal gains. Back home, Sensex and Nifty ended on a weak note amidst FPI exits. 

BTC ETF Has Caveats

Grayscale Investments’ Bitcoin ETF proposal is due for approval on July 6. The crypto investment firm is hoping to launch the first spot Bitcoin ETF in the US, but it could actually lose out on fee income. So even if Grayscale gets the SEC nod, it is not a win-win.

The cost pressuresTraditionally, the ETF market has been a low-cost game. Grayscale wants to convert its Grayscale Bitcoin Trust (GBTC) into a spot ETF. But there will be issues: 

1. Grayscale’s Bitcoin Trust earns a 2% fee, which is very high in the ETF space. The highest fee so far is 0.95%, which is half of GBTC’s current rate. It has to slash rates to stay in business. So, it loses.

2. The crypto firm collected $233 million as a fee from GBTC investors. This will sink to less than half if it converts into an ETF.  

All this is happening in the middle of the crypto winter. The price of GBTC has fallen ~61% since the beginning of the year.  

What’s the alternative? So far, the SEC has opposed spot ETFs. But Grayscale hasn’t given up yet. The company has told investors it is prepared for any scenario. 

The timing doesn’t seem right. The market is extremely fearful. Just last week, BTC-related funds saw a $453 million exit. The US regulators aren’t enthused.  

Talking of selloffsCanada-based Cypherpunk Holdings sold off all of its Bitcoin and Ethereum holdings for $5 million. This follows Toronto’s Bitfarms, which sold 50% of its Bitcoin holdings to reduce debt. 

Roger Did It

Five days after freezing withdrawals, CoinFLEX named the culprit. The exchange says that Roger Ver aka ‘Bitcoin Jesus’ owes them $47 million. But in response, Ver says it is CoinFLEX that owes him a ‘substantial’ amount. He said it without naming the company. 

Who owes who? CoinFLEX is raising $47 million by issuing a new token called Recovery Value USD to solve a debt crisis. 

On June 24, CoinFLEX CEO Mark Lamb blamed an unknown person for a liquidity crisis at the company. Withdrawals were paused immediately. Normal operations could resume from June 30 onwards. 

With Lamb naming Ver, it is a public spat right now. Lamb claims Ver had previously met all obligations and was of “high integrity”. Hence, he was trusted. Ver is claiming CoinFLEX needs to pay back his loans. Lamb denies this. 

Speaking of Crypto There is a new knight in town. All hail the new chevalier (French for a knight). J. Christopher Giancarlo, former head of US CTFC and author of CryptoDad: The Fight for the Future of Money, was awarded the French national order of merit.

Ripple-SEC Blame Games

The Ripple-SEC battle is heating. The company has written to the court objecting to SEC trying to seal its response.  

What’s the deal?SEC has said that Ripple’s XRP token should be classified as a security and regulated by it. Ripple doesn’t want that to happen.

In the ongoing court case, SEC witness Patrick B. Doody testified. However, the SEC wants to tuck away this evidence, saying it could ‘inflame’ the matter. Now: 

• SEC has sought to censor his submissions and protect Doddy’s safety. 

• Ripple, on the other hand, noted that censoring will be unnecessary and against the public interest. 

CEO Brad Garlinghouse has also declared that Ripple will leave the US if the market regulator wins the case. 

Token crumbling The ongoing bear market is also doing nothing to allay the fraying nerves of XRP holders. The token, trading at ~$0.3, has lost more than 60% of its value to date this year. Ripple is now considering alternate locations. On the list are Japan, UAE, and Singapore. 

Compass Needs Directions

Compass Mining lost a mining facility because it didn’t pay power bills on time. Now, the crisis is escalating with its CEO and CFO resigning. Facility owner Dynamics Mining has even accused Compass employees of allegedly trying to steal machines. 

Payment defaultsDynamics Mining had said that Compass didn’t pay power bills worth $600,000. There were six late payments and three nonpayments. In response, Compass was asked to vacate the premises ‌in Maine. 

The worries for Compass had begun in April itself. It lost $30 million worth of mining equipment belonging to the Russian miner BitRiver. This was after the US imposed sanctions following Russia’s attack on Ukraine. 

Now, hiringAt present, CTO Paul Gosker and Chief Mining Officer Thomas Heller are managing the company as its interim co-presidents and CEOs. The hunt for a full-time CEO is on. 

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Who are we? There is a lot happening in our world. Everything has layers, and each layer has to be carefully peeled so you, the reader, know how the world of money is changing every day. That’s our promise. Help you unpeel the onions, which are the public markets in the US, India, and crypto, so that you know just a little more.