FTX Bankruptcy Lawyers in the Clear, SEC Approves Spot Ether ETFs Amidst Mixed Reactions
Summary:
An independent investigation has established that the bankruptcy attorneys of crypto-exchange FTX, Sullivan & Cromwell, were unaware of FTX's critical financial status which led to its downfall. While the US SEC has approved the spot Ether ETFs, speculation has arisen due to a different approval process from Bitcoin ETFs. Despite this landmark ruling, however, minimal impact on the Ether prices has been recorded. Further, Sullivan & Cromwell's appointment as overseer for the bankruptcy process has drawn criticism from FTX's creditors due to fears over compromised objectivity.
An independent probe has confirmed that FTX's bankruptcy attorneys, Sullivan & Cromwell, were not privy to the serious financial troubles that led to the cryptocurrency exchange's downfall. The crypto community was left puzzled over the disparity between the approval proceedings for Ether ETFs and those for Bitcoin ETFs in January. The United States regulatory authority for securities has greenlit spot Ether ETFs in a milestone decision, the impact of which, however, was minimal on the ETH prices.
An independent inquiry into Sullivan & Cromwell, FTX's bankruptcy attorneys, has concluded that the law firm was oblivious to the extensive fraud that led to the collapse of the exchange. As per ex-US prosecutor Robert Cleary, the law firm made inaccurate statements about FTX as it was deliberately misled by the exchange. In response to the investigation's outcome, the firm commented that it remained secure in its preliminary work for FTX and the kick-off of the Chapter 11 cases, and it welcomed the examiner’s findings that dismissed various baseless allegations about its service for FTX. Creditors of FTX criticized Sullivan & Cromwell when it was chosen to supervise the bankruptcy process due to concerns that the law firm's history with FTX could affect its impartiality in the case.
Spot Ether ETFs received approval from the United States Securities and Exchange Commission (SEC) on May 23, but the approval method was not identical to the one used for spot Bitcoin ETFs in January. The spot Ether (ETH) ETFs were greenlit by the Trading and Markets Division of the SEC, unlike the spot Bitcoin (BTC) ETFs, which were authorized through a vote by a five-member committee including SEC leader Gary Gensler. Despite approvals of 19b-4 filings from BlackRock, Fidelity, Grayscale, Bitwise, VanEck, Ark, Invesco Galaxy, and Franklin Templeton, the SEC chose not to elaborate beyond the official verdict. Some corners expressed doubts over the decision, highlighting the potential for a commissioner to challenge the approval within a ten-day window, and attributing the delegated authority to concealing political voting behavior.
In a second monumental ruling this year, the United States Securities and Exchange Commission authorized the listing and trading of spot Ether (ETH) exchange-traded funds (ETFs) on their respective exchanges in the US, as indicated in May 23 filings. The SEC greenlit 19b-4 filings from multiple firms, including VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy, and Bitwise. This authorization came amid rumors that the SEC has been considering classifying Ether as a security. Many feel the latest decision implies an "implicit" acknowledgment by the SEC that Ether isn't a security. Ether took a 3.4% hit just before the news release but managed to recover around 5% shortly after, and is presently being traded at $3,806. Some analysts believe the negligible price fluctuation is due to Ether approvals being factored into prices earlier in the week. Others reasoned that it's because the Ether ETFs are yet to receive S-1 approvals necessary for launch.
Published At
5/24/2024 10:43:22 PM
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