News Roundup — BlackRock names JPMorgan as authorized participants for its proposed bitcoin ETF

Major news stories this week;

1. BlackRock names Jane Street, JPMorgan as authorized participants for its proposed bitcoin ETF
2. Judge rules Terra ‘stablecoin’ and other tokens are securities in victory for the SEC and departure from Ripple case
3. Hong Kong Regulators Propose Mandatory Licenses for Fiat-Backed Stablecoin Issuers
4. Michael Saylor begins selling $216M in MicroStrategy stocks for more Bitcoin
5. Marathon Digital breaks own record with 1,853 Bitcoin mined in December

Story Summaries;

1. BlackRock disclosed significant new information Friday as part of its proposed spot bitcoin ETF: the identities of its intended authorized participants. The asset management giant plans to tap JPMorgan Securities and Jane Street as authorized participants, a Friday filing notes, should the Securities and Exchange Commission grant approval for their proposed fund. Authorized participants, or APs, are entities allowed to create and redeem shares of an ETF. These organizations can either exchange ETF shares for a corresponding basket of securities that reflects the ETF’s holdings, or exchange them for cash. ETF watchers such as Bloomberg Intelligence analysts James Seyffart and Eric Balchunas have been closely eyeing new S-1s to see who taps which firms as APs. The disclosure is seen as one of the final steps before the SEC can make its decision.
2. A federal judge sided with the U.S. Securities and Exchange Commission in a closely watched crypto case on Thursday, ruling that four crypto tokens offered by the failed Terraform Labs company—including UST and LUNA—constituted unregistered securities. As the crypto industry battles regulators over how to classify digital assets, the decision is a setback for the sector’s interpretation of securities law and a departure from a separate decision by a different judge in the Southern District of New York over the token XRP. In his 71-page decision, Judge Jed Rakoff wrote that there is “no genuine dispute” that the four crypto tokens offered by Terraform were securities because “they are investment contracts,” arguing that defendants wanted to “cast aside decades of settled law,” citing the seminal Supreme Court precedent called the Howey test.
3. Hong Kong financial regulators published proposals for supervising stablecoin issuers through a licensing regime and a regulatory sandbox to communicate "supervisory expectations and guidance on compliance" to prospective issuers. The jurisdiction's central bank, the Hong Kong Monetary Authority (HKMA), and the Financial Services and the Treasury Bureau (FSTB) are seeking feedback by Feb. 29. Fiat-referenced stablecoins are a type of cryptocurrency designed to maintain its value on par with sovereign currencies like the U.S. or Hong Kong dollar. Hong Kong is seeking to position itself as a regional crypto hub. It implemented a licensing regime for crypto service providers in June that recognizes retail crypto trading as a regulated activity. The jurisdiction has been planning regulations for fiat-backed stablecoins for some time.
4. MicroStrategy executive chairman Michael Saylor has begun a four-month process of selling $216 million worth of his shares in his firm MicroStrategy, previously stating part of it would be used to buy more Bitcoin. In a filing with the United States Securities and Exchange Commission, Saylor disclosed that he had already started selling his 315,000 stock options awards, first granted to him in April 2014. The awarded stock options expire on April 30, 2024. According to the filing, Saylor began the process on Jan. 2, selling his first tranche of 5,000 shares. In MicroStrategy’s third-quarter earnings call on Nov. 2, Saylor said he planned to sell 5,000 MSTR shares daily for the next four months, which will go into addressing “personal obligations” and increasing the amount of Bitcoin he owns.
5. Bitcoin miner Marathon Digital Holdings has notched itself a new production record, mining more Bitcoin in December 2023 than any month before. According to a Jan. 4 press release, the Florida-based firm reported mining 1,853 Bitcoin in December, a 56% increase from November and a 290% increase from December 2022, claiming: “We believe this to be the highest monthly total ever recorded by a public Bitcoin mining company.” Core Scientific previously claimed that it had mined the most monthly Bitcoin in January 2023 after producing 1,527 BTC. Marathon’s recent figures surpass that by more than 300 BTC. Marathon chairman and CEO Fried Thiel said the record-setting monthly production could be attributed to an 18.4% monthly increase in hash rate to 22.4 exahashes per second.

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And that’s all for last week’s news! Wishing you a great week ahead!

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