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- 1 The year 2023 was full of ups and downs for the crypto industry, mainly in terms of connections with the financial demands and regulators.
- 2 From the SEC’s charges on crypto institutions to applying for Bitcoin Exchange Traded Funds (ETF), every action holds a different significance in the crypto world.
- 3 The FTX bankruptcy and the exclusion of XRP from the security list shook the crypto world.
2023 has been a year full of innovations, growth, and development for the crypto industry. The industry hit some great highs and also experienced some failures. However, each story comes with some lessons, either for financial officers, entrepreneurs, or a crypto fan.
Let’s take a look back at the lessons we can remember from the crypto sector in the year 2023.
BlackRock Application for Bitcoin ETF
The BlackRock ETF application was one of the biggest news of 2023, holding the attention of the entire crypto industry. The application is considered a major step forward for digital assets.
Despite the regulator’s continued crackdown, BlackRock, the world’s ruling asset manager, applied for the spot Bitcoin ETF and is awaiting approval. On June 15, 2023, the leader took a significant step and filed for the SEC’s acceptance of the Bitcoin ETF.
In the year 2022, Bitcoin’s prices recovered from the lows, and the entrance of the BlackRock company in the Spot Bitcoin ETF arena flipped everything. Additionally, the entry of the giant inspired other players such as Fidelity to own Spot ETF offerings. Fidelity also reapplied paperwork for the Wise Origin Bitcoin Trust, which was disapproved by the SEC in 2022.
The application from BlackRock and other players proposes to offer investors an easy way to trade funds that directly track the recent BTC price, instead of future contract prices. Also, it is hoped to bring tens of billions of dollars into the Bitcoin market. As of now, the SEC has untill January 10, 2024, to settle on the applications.
The FTX Bankruptcy
Another news that sought the attention of crypto fans is the arrest of Sam Bankman-Fried, FTX’s CEO. Once standing as the top crypto exchange, FTX went bankrupt in November 2022.
Later, in 2023, Sam was found guilty of several fraudulent attempts. Sam, the potential leader of the crypto universe, potentially the globe’s first trillionaire, is now in jail in Brooklyn. He has been found guilty in cases of fraud and conspiracy for misusing the customers’ funds at his exchange. Also, the exchange experienced advisory and legal charges of around $121.8M.
However, based on the recent news and data, the exchange is ready to return 90% of the recovered assets to the customers. The assets are categorized into three main groups that are the general pool, US customers, and FTX.com customers, and these funds are expected to be released in mid-2024.
US Judge Has Not Classified XRP as a Security
XRP, a borderless coin running on the XRP Ledger blockchain, also got attention this year. However, the news doesn’t sound good for the XRP community and the crypto industry. Analisa Torres, the US Judge, recently declared that cryptocurrencies can’t be considered a security, mainly while talking about “programmatic sales”.
The court addressed some impropriety in the working of Ripple Labs, mainly during the XRP coin offering. The asset failed to qualify as a security.
Going into details, since 2017, Ripple’s programmatic sales showcased less than 1% of the XRP trading volume, globally. In addition to this, the judge recorded the differences between programmatic sales and institutional sales. The court also pointed out that the specific context of the XRP coin transaction requires a Howey test.
SEC’s Charges On Coinbase, Binance, and Kraken
Another news that provoked the crypto world in 2023 is the SEC’s charges on some of the most prominent crypto exchanges. In June 2023, Binanc and Coinbase, which are some of the top cryptocurrency exchanges, were sued by the SEC, while Kraken was charged in November 2023.
Operating an unregistered securities exchange is one of the main reasons behind the SEC’s action. Coinbase has listed assets that the SEC believes are securities and touted its openness to operations with US regulators and rules.
Binance was charged with breaking the US securities laws including unregistered operations, oversight on the platform, and misrepresentation of the trading authorities. Kraken was charged for operating an unregistered securities exchange, agent, broker, and removing agency. Commingling customers’ digital assets and cash reserves with their holdings also put Kraken in danger.
Conclusion
The year 2023 was a rollercoaster ride for the crypto world. Stories like the Bitcoin ETF filing by leading assets managers brought some positive vibes for the crypto industry. On the other hand, stories related to the SEC’s charges showcase a negative expression of the crypto universe. Charges on Coinbase, Binance, and Kraken, the delisting of XRP from the securities, and the FTX bankruptcy case, increased worries for crypto enthusiasts. However, the crypto industry in 2024 is expected to pursue greater transparency regarding crypto assets, securities, and entities.
Disclaimer
This article is for informational purposes only and does not provide any financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your own research before making any financial decisions.
Steefan George is a crypto and blockchain enthusiast, with a remarkable grasp on market and technology. Having a graduate degree in computer science and an MBA in BFSI, he is an excellent technology writer at The Coin Republic. He is passionate about getting a billion of the human population onto Web3. His principle is to write like “explaining to a 6-year old”, so that a layman can learn the potential of, and get benefitted from this revolutionary technology.
