SEC Approves Spot Bitcoin ETFs, But "We Did Not Approve or Endorse Bitcoin"

Statement on the Approval of Spot Bitcoin Exchange-Traded Products by SEC Chair Gary Gensler

Today, the Commission approved the listing and trading of a number of spot bitcoin exchange-traded product (ETP) shares.

I have often said that the Commission acts within the law and how the courts interpret the law. Beginning under Chair Jay Clayton in 2018 and through March 2023, the Commission disapproved more than 20 exchange rule filings for spot bitcoin ETPs. One of those filings, made by Grayscale, contemplated the conversion of the Grayscale Bitcoin Trust into an ETP.

We are now faced with a new set of filings similar to those we have disapproved in the past. Circumstances, however, have changed. The U.S. Court of Appeals for the District of Columbia held that the Commission failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale’s proposed ETP (the Grayscale Order).[1] The court therefore vacated the Grayscale Order and remanded the matter to the Commission. Based on these circumstances and those discussed more fully in the approval order, I feel the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares.

SEC Charges Global Software Company SAP for FCPA Violations

The Securities and Exchange Commission today announced charges against global software company SAP SE for violations of the Foreign Corrupt Practices Act (FCPA) arising out of bribery schemes in South Africa, Malawi, Kenya, Tanzania, Ghana, Indonesia, and Azerbaijan. The company agreed to monetary sanctions of nearly $100 million in disgorgement and prejudgment interest to settle the SEC’s charges.

The SEC’s order finds that SAP, whose American Depositary Shares are listed on the New York Stock Exchange, violated the FCPA by employing third-party intermediaries and consultants from at least December 2014 through January 2022 to pay bribes to government officials to obtain business with public sector customers in the seven countries mentioned above. According to the SEC’s order, SAP inaccurately recorded the bribes as legitimate business expenses in its books and records, despite the fact that certain of the third-party intermediaries could not show that they provided the services for which they had been contracted. The SEC’s order finds that SAP failed to implement sufficient internal accounting controls over the third parties and lacked sufficient entity-level controls over its wholly owned subsidiaries.

S.E.C. Social Media Hack That Sent Bitcoin Soaring Prompts Investigation

The hack of a social media account used by the Securities and Exchange Commission is prompting both internal and external investigations into how the security breach occurred and whether anyone tried to profit from it, said the commission and several legal experts.

The S.E.C. said in a statement on Wednesday that it was coordinating an investigation into the hack that occurred the prior day “with appropriate law enforcement entities, including the S.E.C.’s Office of the Inspector General and the F.B.I.”

John Reed Stark, a former S.E.C. enforcement lawyer and regulatory consultant on cybersecurity, said the commission’s inspector general would need to investigate how a hacker was able to access the S.E.C.’s official account on X — formerly Twitter — to post a false message that the commission had approved several Bitcoin investment products.

Wall Street criminal enforcer urges whistleblowers to come forward

The top enforcer of criminal malfeasance on Wall Street is calling on whistleblowers to come forward and report wrongdoing under a new program aimed at uncovering illegal activity.

Damian Williams, the top federal prosecutor in Manhattan, told reporters on Wednesday his office would enter into non-prosecution agreements under the program with individuals involved in non-violent criminal conduct who voluntarily report offenses and cooperate with investigators.

Goodbye ESG, Hello “Responsible Business”

As the Journal article notes, due to “investor backlash, political pressure, and legal threats,” business leaders are now “making a conscious effort to avoid the once widely used acronym for such initiatives.” ESG has become that which must not be named, sort of like Voldemort. Companies are “stripping ESG” from program titles, initiatives, and presentation headings. The key here seems to be that companies are not dropping what they had previously called their ESG initiatives; rather, companies are using different terms to describe them, focusing on “alternative ways to describe their efforts,” using such terms as “responsible business.”

On the 15th Year Anniversary of Hal Finney’s Iconic ‘Running Bitcoin’ Tweet, BTC Clears Massive Hurdle for Mainstream Adoption

“Running bitcoin,” were the words of legendary cypherpunk Hal Finney on Jan. 11, 2009, shortly before becoming the first person to download and receive bitcoin (BTC) two days later.

This tweet introduced the world to bitcoin, the then-niche internet token which would balloon into a trillion-dollar asset at its peak.

On Wednesday, exactly 15 years after Finney’s tweet, bitcoin got its first spot exchange-traded fund (ETF) approved by the U.S. Securities and Exchange Commission (SEC).

Nasdaq Is Investing in AI Technology to Fight Financial Crime, CEO Friedman Says

Nasdaq Inc. is throwing its weight behind technology that protects against financial crime as the demand to stop sophisticated, bad actors rises, according to Chief Executive Officer Adena Friedman.

“We are investing in the technology in a very significant way,” Friedman said Wednesday at the Consumer Technology Association conference in Las Vegas. The anti-financial crime business is also Nasdaq’s fastest-growing, up roughly 20% year-over-year, she said.

Nasdaq is enhancing its anti-crime offerings using artificial intelligence, which can predict and speed up the process of identifying criminal behavior, and rooting out bad actors in the industry, she said. The firm is working with banks, other exchanges and brokerage firms that can use the software to eliminate threats.