Hodler’s Digest, March 11–17: Top Stories, Price Movements, Quotes and FUD of the Week
In this week’s Hodler’s Digest, Jay Clayton may not consider ETH to be a security, but the CBOE is over BTC futures contracts for now.
Top Stories This Week
The founders of international cryptocurrency pyramid scheme OneCoin have been charged by a United States district attorney. Both Konstantin Ignatov and his sister Ruja Ignatova were reportedly arrested on March 6 in Los Angeles after being accused of “wire fraud, securities fraud, and money laundering offenses” after luring investors into putting billions of dollars into the fraudulent OneCoin cryptocurrency. The crypto organization — established in 2014 and based in Sofia, the capital of Bulgaria — works as a marketing network in which members receive commissions for attracting potential buyers to buy into the cryptocurrency, with reportedly over 3 million members globally.
Jay Clayton, the U.S. Securities and Exchanges Commission (SEC) chairman, has reportedly confirmed that Ethereum (ETH) and cryptocurrencies similar to it do not qualify as securities. Citing a letter written by Clayton in March, nonprofit crypto research organization Coin Center reported that Clayton has agreed that a digital asset’s definition as a security is “not static” and can change over time. While Clayton does not mention ETH directly, he states that he agrees that a digital asset transaction may not represent a security if the purchasers no longer expect a group to carry out entrepreneurial efforts.
Stablecoin Tether (USDT), which has always claimed to be backed 1:1 to the U.S. dollar, drew scrutiny this week from the crypto community when the description of its holdings on its website was subtly changed. A new update to the site, date unknown, now reads that each tether is backed by its reserves, which, “from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities.” Tether has previously faced criticism due to their lack of an official audit, although bank documents from the entity last fall had seemingly confirmed the validity of Tether’s backing claims.