New Bitcoin Futures, Ripple Lawsuit Fuel Banking Investments
The cryptocurrency market has remained volatile over the past month, managing to dip into the red this week with nearly $100 billion being wiped from the market in just 24 hours. Bitcoin, along with other smaller tokens, fell below support levels amid a series of sell-offs caused by panic. Still, that did not dampen the flurry of activity taking place across the crypto market, with a lot of excitement fueling new prospects, particularly on the large-scale institutional and banking level.
Bank of America to Offer Bitcoin Futures
Multinational investment bank and financial services holding company Bank of America has finally been bitten by the crypto bug, albeit later than its institutional compatriots. In a big step towards embracing crypto, BoA has started allowing some clients to trade cash-settled bitcoin futures.
The bank will reportedly be using CME bitcoin futures and will be granting their clients access to the crypto world in a controlled and risk-mitigated manner. Since futures contracts are seen as highly leveraged investments in a very liquid market, this is a great way for wealthy clients to hedge or diversify their portfolios with crypto access.
Back in May of 2021, financial tech giant Fidelity National Information Services and NY-based crypto custody firm NYDIG formed a partnership program that allowed customers of the hundreds of U.S banks enrolled in the program to buy, hold, and sell Bitcoin through their existing bank accounts. This is seemingly putting pressure on larger institutions that are late to the game.
Bank of America, which has been conservative in its embrace of crypto thus far, made headlines earlier this month when it debuted a new team dedicated to researching cryptocurrencies and digital assets, setting off alarms that they may be getting into the crypto game.
BoA joins the likes of Goldman Sachs, JP Morgan, and Standard Chartered — each of whom has set up their own plans for crypto offerings to clients.
Ripple Lawsuit Sparks New Excitement in DeFi
In a supplemental letter submitted by their lawyers, Ripple has requested the dismissal of an ongoing Securities and Exchange Commission (SEC) case against them. Back in December of 2020, the SEC alleged that Ripple had knowingly engaged in unregistered securities sales via the XRP token, also claiming that it had secretly received compensation from select digital asset issuers that it was profiling.
SEC commissioners Hester Peirce and Elad Roisman had previously conceded that “There is a decided lack of clarity for market participants around the application of the securities laws to digital assets and their trading”.
In two statements highlighting the SEC’s seeming inability to prove that XRP’s current and former CEOs acted knowingly in offering unregistered security to the public, the lawyers representing Ripple CEO Brad Garlinghouse and co-founder Chris Larsen said, “The Public Statement confirms the Individual Defendants’ arguments that there was (and remains) significant regulatory uncertainty regarding when digital assets may be classified as securities by the SEC.” The letter goes on to add, “The SEC’s aiding and abetting claim requires that “it show that the Individual Defendants knew or recklessly disregarded that Ripple’s offerings and sales of XRP required registration as securities and that those transactions were improper.”
Previously, Ripple had been successful in managing to stop the SEC who was seeking access to Ripple’s legal memos concerning the sale of XRP in its 2013 ICO. By accessing these records, the regulator wanted to prove that Ripple was well aware of XRP’s “security” status before conducting the SEC.
As it stands, many in the international finance industry feel as though Ripple is primed to win this case against the SEC, after which it will (ironically) file with that very same organization to become a publicly-traded company. Hinting at the matter was CEO of the Japanese technology giant SBI Group — the largest shareholder of Ripple Labs — Yoshitaka Kitao, who disclosed Ripple’s plans to go public saying, “In the next 12 months, you’ll see IPOs in the crypto/blockchain space. We’re not going to be the first and we’re not going to be the last, but I expect us to be on the leading side. It’s a natural evolution for our company”.
This comes months after Coinbase’s historic listing on the Nasdaq, a listing that was seen as a huge success in the crypto world as it managed to hit a record $100 billion of capitalization in just one day.
For more information on Ripple (XRP) and its profile, check out the video below.