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The European Union securities watchdog is asking stakeholders whether it should include crypto assets into investment products a move that could enable crypto to tap a market bigger than spot Bitcoin exchange-traded funds.

The European Securities and Markets Authority is asking industry and experts to provide input on expanding the assets eligible for the network called Undertakings for Collective Investment in Transferable Securities, or UCITS.

The move opens the door to broader access to cryptocurrencies via UCITS, a 12 trillion market.

If ESMA is convinced, it would be the final step in mainstreaming crypto assets in Europe, financial regulation expert Sean Tuffy told DL News, calling it a potential game changer.

It comes on the back of the US and Hong Kong regulators approving Bitcoin ETFs this year, highlighting how traditional financial players are muscling into crypto.

In the US alone, funds run by the likes of BlackRock and Grayscale each raked in roughly $18 billion since January becoming a key driver of the Bitcoin rally in the first quarter of 2024.

However, approval is not a forlorn conclusion.

ESMAs call for stakeholder input is open until August 7.

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The impact would be more significant than the US ETFs, Andrea Pantaleo, a lawyer specialised in crypto regulation and litigation at DLA Piper, told DL News.

Because there could be plenty of fund compartments interested in investing small percentages of liquidity in crypto-assets.

There are several reasons why accessing UCITS could prove a boon for the industry.

UCITS investments are made up of many different categories for funds which have different assets allocated to them depending on their risk and profile.

There is another way the EU framework could benefit crypto: Authorisation is not required for each time a fund invest in crypto-assets, and this would also benefit market liquidity, Pantaleo said.

In the US, ETFs are based on single assets which regulators need to authorise.

But in Europe, UCITS investment funds can allocate liquidity to more crypto assets without obtaining authorisation beforehand for each one.

UCITS funds have specific investment limitations depending on the type of assets, Pantaleo said. We wont have a 100% crypto UCITS fund, but hopefully many investment funds could hold 1-2% of their liquidity in crypto.

While investors can trade Bitcoin exchange-traded products in the EU, they havent been as popular as their US counterparts. Asset managers in the EU already offer ETPs which behave like ETFs.

But there is a long way to go before crypto assets are potentially included into the framework.

The only issue could be custody, Pantaleo said, as the regulation on depository banks for funds should be coordinated with crypto-assets custody.

The EU bloc is rolling out its legal framework for crypto over the coming years known as the Markets in Crypto-Assets regulation, or MiCA. For custodians, MiCA lays down rules for segregation of assets and policies for safekeeping.

Crypto assets involved in UCITS would likely need to comply to the same rules.

To this effect, the ESMA has also asked for specific feedback on how adding specific cryptocurrencies to the framework would or wouldnt be affected by MiCA.

The process of updating the UCITS eligible assets rules is not quick and will be subject to a lot of negotiation, Tuffy said.

Weve got a long road to go before well know if crypto will be allowed into UCITS.

Inbar Priess is a Regulation Correspondent at DL News. Got a tip? Email her at inbar@dlnews.com.

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EU mulls adding crypto in 12tn investment market bigger than Bitcoin ETFs - DLNews

The launch of spot Bitcoinexchange-traded funds (ETFs) in the United States has proved hard to follow as Hong Kongs new Bitcoin and Ethereum ETFs hit $12 million in trading volume.

Spot Bitcoin (BTC)and Ether (ETH) ETFs finally hit Hong Kong markets, but trading volumes suggest that the launch of spot Bitcoin ETFs in the United States set an exceptionally high bar to match.

The six new crypto ETFs total trading volume at the closing bell on day one in Hong Kong was 87.58 million Hong Kong dollars ($12 million). This number pales compared to the first-day trading volume of U.S. spot Bitcoin ETFs, valued at $4.6 billion.

Data shared by the Hong Kong Stock Exchange (HKEX) highlighted the relatively flat performance and interest in the six spot Bitcoin and Ether (ETH) ETFs managed by China Asset Management, Harvest Global, Bosera and HashKey.

The Bosera HashKey Bitcoin ETF recorded 249,000 HK$ in first-day trading volume, while the Bosera HashKey Ether ETF produced 99,000 HK$ in trading volume at the closing bell.

Related:Hong Kong Bitcoin and Ether ETFs officially approved to start trading on April 30

The China Asset Management (CAM) Bitcoin ETF fared far better, seeing 4.6 million HK$ in trading volume. Trading had opened at 8.080HK$ and closed at 7.950 HK$. CAMs Ether ETF recorded 4.6 million HK$ in trading volume by the closing bell.

Wu Blockchain had previously reported that CAM subscription size for its spot Bitcoin and Ethereum ETFs attracted $140 million during the initial offering period before trading began.

HKEX previously highlightedinvestor interest in its cryptocurrency futures ETFs, which were first launched in late 2022. Its three VA Futures ETFs attracted $529 million in net inflows in the first quarter of 2024 - adding to the hype around the spot BTC and ETH ETFs launch on April 30.

The South China Morning Post reported that local fund managers and brokerages are offering fee exemptions in an attempt to draw investors to the new crypto ETFs.

Harvest is waiving its management fee for six months while Borsera has forgone its management fee for four months.

The publication also intimated that investors in mainland China could potentially have access to the newly launched products. However, this could be mitigated by KYC policies relating to mainland Chinese identity cards.

Magazine:68% of Runes are in the red Are they really an upgrade for Bitcoin?

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Hong Kong Bitcoin and Ether ETFs have tough debut on first-day trading - Cointelegraph

Frankfurt-based tech company Northern Data , prominently known for bitcoin mining, has recently transformed its business model into cloud solutions and data center infrastructure. This shift has caught the attention of investment bank Berenberg, which started coverage of the company's stock with a Buy rating and a price target of 39 euros ($41.84) per share, indicating a potential 53.2% upside from the current share price as of April 26. Listed on the Frankfurt Stock Exchange, Northern Data has three core divisions: Peak Mining for bitcoin mining, Taiga Cloud for cloud computing and Ardent Data Centers for data center infrastructure. Berenberg holds that the market has largely overlooked the growth prospects for Taiga Cloud's offering. Shares of Northern Data are also traded over the counter in Italy and the United States, but trading frequency and volumes are expected to be very low. NB2-DE 1Y line The business transformation isn't the first for the company, which has been listed since 2015. Formerly known as Biosilu Healthcare, the company was a pharmaceutical broker for Asian markets until early 2018. It then pivoted to crypto mining operations and was renamed Northern Bitcoin , making it one of the earliest listed firms to enter the crypto scene. In its current format, Northern Data continues to evolve with the acquisition of a data center in Pittsburgh earlier this year. The company said it will expand the facility fourfold by the second half of next year. Northern Data is also expected to benefit from advances that its subsidiary Ardent Data Centers has made in liquid-cooling technology in its crypto mining operations over the years. "We believe that the significant investments that Northern Data has made in the latest liquid-cooling mining technology and the expansion of the company at its existing North Dakota and new Texas sites should enable it to achieve high bitcoin production and mining profitability," Berenberg analysts Gerhard Orgonas and Jenna Xu said in a note to clients on April 25. "We think that Northern Data's knowhow in energy-efficient, state-of-the-art, liquid-cooled data centres makes it a competitive colocation services provider, especially given the increasing efficiency requirements for generative-AI applications." The investment bank estimates that Peak Mining can achieve revenues of over 170 million euros by next year , with adjusted margins above 40%. But it's Northern Data's cloud solutions that analysts are eyeing. The company's Taiga Cloud division is certified as an "Elite" partner of Nvidia , making it one of the largest providers of Nvidia-based cloud services in Europe. The investment bank forecasts annual revenues of around 400 million euros and adjusted profits of about 290 million euros from Taiga Cloud from 2026 onward. Northern Data's cloud computing platform is expected to have 20,000 Nvidia AI chips, worth 730 million euros, by the third quarter of 2024, the note said. Northern Data's founder and CEO Aroosh Thillainathan has also demonstrated his confidence in the company by announcing plans to acquire shares worth up to 30 million euros this year. As of Mar. 21, the company said that Thillainathan's stake in Northern Data Group has increased to 3.8 million shares, representing approximately 7.15% of the business' current share capital.

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This bitcoin miner and Nvidia AI cloud partner's stock could go up 50%, Berenberg says - CNBC

These three large-cap tokens are seeing various regulatory pressures impact their valuations today.

Many of the closest-watched large-cap cryptocurrencies are seeing significant selling pressure in the market today. Ethereum (ETH 0.14%), Dogecoin (DOGE -0.75%) and Bitcoin Cash (BCH -0.89%) have dropped 4.5%, 5.8%, and 3.8%, respectively, over the past 24 hours as of 2:30 p.m. ET.

These moves come despite relatively strong price action in the stock market, with a number of more speculative meme stocks surging today. With cryptocurrencies associated closely with these assets (particularly when we're talking about meme tokens such as Dogecoin), one needs to ask the question -- what's going on here?

It does appear some uncertainty around this week's upcoming Federal Reserve Open Market Committee meeting is leading to declines among major tokens, driving uncertainty with the macro backdrop in this space. But there are also some key token-specific fundamental factors that also appear to be in play. Let's dive into what's causing today's turmoil among these three top tokens.

Ethereum's status as the world's second-largest cryptocurrency means it's a top digital asset of focus for many conventional investors looking to diversify into this space. What it also means is that regulators tend to pay greater attention to this token, particularly with an upcoming decision on spot Ethereum ETFs looming. Uncertainty around these ETF approvals in the U.S. continues to remain high, despite other jurisdictions already approving exchange-traded products aimed at Ethereum.

Additionally, a lawsuit filed against the SEC by Ethereum developer Consensys has generated significant attention in recent days. This lawsuit aims to prevent what the developer calls an "unlawful seizure of authority," a move many in the crypto community are applauding, ahead of key regulatory decisions in this realm.

Other regulatory impact of various moves from exchanges such as Coinbase (COIN -6.52%) to list Dogecoin futures, among other products, remains to be seen. For now, these three tokens will likely receive outsized scrutiny on this front, with investors clearly taking a more cautious approach to these assets in today's session.

This slate of regulatory concerns can be capped off by news that a recent payment update on claims tied to Bitcoin Cash and other tokens for those impacted by the Mt. Gox debacle years ago has been provided. This update indicates a completion date for claims has been put forward, leading to likely selling pressure for Bitcoin Cash, at least over the near term.

For now, there are plenty of regulatory-related headwinds investors appear to be pricing into the crypto sector. These three tokens have perhaps the most unique and noticeable headwinds, though it's also true that the Securities and Exchange Commission has continue to drive home a hawkish narrative on the space. That could mean continued uncertainty over the near term, which often leads to the kind of volatility we're seeing today.

It remains to be seen if we'll see an immediate bounce-back from this selling pressure. The crypto market continues to see impressive attention, and while capital flows into digital assets appears to be slowing, these projects are worth considering. Thus, for now, I'm going to keep these projects on my watch list and provide updates as they come.

Chris MacDonald has positions in Ethereum. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, and Ethereum. The Motley Fool has a disclosure policy.

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Why Ethereum, Dogecoin, and Bitcoin Cash Are Slumping Today - The Motley Fool

According to an unsealed U.S. Department of Justice indictment, early Bitcoin investor Roger Ver was charged with tax evasion and arrested in Spain.

The Department of Justice (DOJ) indictment alleges that Ver promoted Bitcoin (BTC) and acquired the leading cryptocurrency through personal funds and two companies starting in 2011.

Also known as Bitcoin Jesus, Ver renounced his U.S. citizenship through expatriation in February 2014 and secured citizenship from St. Kitts and Nevis, per the Justice Department. At this point, Ver was supposedly required to file tax returns for capital gains from his Bitcoin-inclusive holdings and disclose the fair market value of his assets under U.S. laws.

Ver reportedly owned around 131,000 bitcoins personally and another 73,000 through MemoryDealers.com Inc. and Agilestar.com Inc. Both entities were domiciled in the U.S. and remained subject to U.S. legislation.

DOJ prosecutors alleged that Ver liquidated several thousands of Bitcoin in 2017 for an estimated $240 million but never paid capital gains or exit tax as mandated by law, despite him no longer being a U.S. citizen.

The indictment explains that the investor was still legally obligated to report certain distributions, such as company dividends for MemeoryDealers and Agilestar.

Instead, the Justice Department claimed that Ver hid his accounts from the IRS and concealed proceeds from the 2017 Bitcoin sales, with a tax bill of over $48 million due.The United States government will seek to extradite Ver following his arrest in Europe and prosecute him on American soil.

Ver was a prominent Bitcoin evangelist in the early days of crypto and went on to serve as CEO of Bitcoin.com, one of the first platforms where users could store and trade the worlds largest blockchain asset.

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'Bitcoin Jesus' Roger Ver arrested on $50m tax fraud - crypto.news