![]() ![]() For the latter, Bakkt applies legal standards like the Howey test, along with looking at whether similar tokens have been named as securities.īakkt’s proactive decision in May to delist 25 tokens proved to be prescient, with one-Filecoin-later included as a security in the SEC’s lawsuit against Binance. Other determinants include a token’s liquidity and trading volumes, as well as the likelihood it will be alleged to be a security by the SEC. Considerations include whether the token is a privacy coin, whether it is used for money laundering, and whether there have been hacks or other security issues. crypto ecosystem-a phenomenon described by many as “regulation by enforcement.” Michael said one of the reasons that Bakkt decided to delist MANA and ALGO following the Bittrex lawsuit is that liquidity providers stopped supporting the two tokens, meaning Bakkt could no longer offer a competitive depth of market.ĭespite the threat of SEC action, Bakkt chief product officer Dan O’Prey said that a committee weighs myriad factors in a monthly process when deciding whether to continue listing tokens. Whenever the SEC describes a new token as a security in a lawsuit, it causes a ripple effect across the U.S. Crypto firms, in response, say that there is no viable path for registering securities or platforms with the SEC. In its recent spate of enforcement actions, the SEC has targeted platforms for selling tokens that the agency deems unregistered securities, with Chair Gary Gensler arguing the vast majority of cryptocurrencies, with the exception of Bitcoin, are securities. “But you have to tell me how to operate.” “It’s fine to tell me where I can’t stand,” Gavin Michael, Bakkt’s CEO, told Fortune in an interview. Bakkt still offers eight other cryptocurrencies, including Dogecoin, Litecoin, USDC, and Shiba Inu, along with Bitcoin and Ether. The latest delisting reflects the increasingly hostile crypto environment in the U.S., as firms try to navigate an evolving regulatory landscape shaped by the aggressive SEC. Then in May, Bakkt delisted 25 of its remaining 36 tokens, with a spokesperson attributing the decision to its “regular coin-listing review process” and the “most up-to-date regulatory guidance.” ![]() During the due diligence process, Bakkt had Apex Crypto delist seven tokens, including the failed Terra and the privacy coin Zcash.Īfter the acquisition was completed in early April, Bakkt delisted an additional two tokens-Algorand’s ALGO and Decentraland’s MANA-the day after they were named as securities in an SEC lawsuit against Bittrex. Wary of regulators, Bakkt began to reduce the list of tokens that would come over from Apex. ![]() After offering only Bitcoin and Ethereum, Bakkt’s acquisition of Apex Crypto allowed it to expand the cryptocurrencies available to its customers. ![]()
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