🚨🚨Crypto Market News You Can’t Miss! (05/01/24) 🚨🚨

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6 Jan 2024

The crypto market is always full of surprises and developments that can have a significant impact on the prices and sentiments of various coins and tokens. In this article, we will cover three of the most recent and relevant news stories that have caught the attention of crypto enthusiasts and investors alike. These are:

Logan Paul’s announcement of a $2.3 million buy-back program for CryptoZoo NFTs and a lawsuit against his co-creators.
RDC’s plan to issue the first Bitcoin depositary receipts that do not require SEC approval.
Grayscale, VanEck, and ARK’s registration of their spot bitcoin ETFs to trade on exchanges.

Logan Paul To ‘Personally Commit’ $2.3 Million To Buy Back CryptoZoo NFTs

CryptoZoo is a blockchain-based game that allows users to collect, breed, and trade digital animals as non-fungible tokens (NFTs). The project was launched in August 2021 by YouTuber Logan Paul and two other co-creators, Bryan Larkin and Nick DeMeo. The project raised over $10 million in its initial sale of Base Eggs, which could hatch into Base Animals of different rarities and attributes. The project also introduced an ERC-20 token called ZOO, which was used as the in-game currency and governance token.

However, the project soon faced a lot of criticism and backlash from the community, as many users felt that they were misled by the marketing and promises of the project.

Some of the issues that users complained about were:

The lack of transparency and communication from the team.
The high fees and gas costs associated with the game.
The low quality and variety of the NFTs.
The manipulation and dumping of the ZOO token price by the team and insiders.
The failure to deliver on the roadmap and features of the game.

As a result, many users lost interest and trust in the project, and the value of both the NFTs and the ZOO token plummeted. The ZOO token, which reached an all-time high of $0.67 in September 2021, is now trading at around $0.01 as of January 2024.

In an attempt to salvage the situation and restore some credibility, Logan Paul announced on January 5, 2024, that he would personally commit over $2.3 million to buy back Base Eggs and Base Animals NFTs from “every person who intended to play” the CryptoZoo game. He also stated that he had filed a lawsuit against his two co-creators, Larkin and DeMeo, for breach of contract, fraud, and negligence. He claimed that they were responsible for the mismanagement and downfall of the project, and that he was unaware of their actions until recently.

Paul posted the following message on X (formerly Twitter):

I’m deeply sorry for what happened with CryptoZoo. I trusted the wrong people and got burned. I know many of you did too. That’s why I’m personally committing over $2.3 million to buy back Base Eggs and Base Animals from every person who intended to play the game. This is not a scam or a publicity stunt. This is me trying to make things right. If you want to claim your refund, please visit https://cryptozoo.co/buyback and fill out the form before Feb. 8. Please note that this buy-back is only for the NFTs, not the ZOO token. The ZOO token was created to support the game and its players; it was not intended as an investment vehicle, as outlined in the original WhitePaper. The buy-back is not intended to compensate those who gambled on the crypto market and lost. It’s important to remember that the Zoo Token was created to support the CryptoZoo game and its players; it was not intended as an investment vehicle, as outlined in the original WhitePaper. I hope this gesture will help some of you recover some of your losses and restore some of your faith in me. I’m also suing my two co-creators, Bryan Larkin and Nick DeMeo, for breach of contract, fraud, and negligence. They are the ones who ruined the project and lied to me and to you. I have evidence to prove it and I will not let them get away with it. I will keep you updated on the progress of the lawsuit. Thank you for your support and understanding.

The announcement received mixed reactions from the crypto community. Some praised Paul for taking responsibility and trying to make amends, while others criticized him for being too late and too little. Some also questioned the legitimacy and feasibility of the buy-back program, and whether it would actually benefit the NFT holders.

RDC To Issue Bitcoin Depositary Receipts That Don’t Need SEC Approval

Receipts Depositary Corporation (RDC) is a startup that aims to provide a bridge between the crypto and traditional financial markets. The company is backed by Franklin Templeton, a global investment firm with over $1.5 trillion in assets under management. The team behind RDC consists of former Citigroup Inc. executives, including Ankit Mehta, the co-founder and chief executive, and Michael Albanese, the chief operating officer.

RDC’s main product is the Bitcoin depositary receipt (BDR), which is similar to the American depositary receipt (ADR) that represents foreign stocks. The BDR is a security that represents a fractional ownership of one bitcoin, and it can be traded on any exchange that supports DTC-eligible securities. The DTC, or the Depository Trust Company, is a central securities depository that provides clearing and settlement services for the US markets.

The BDR is designed to offer a simple and convenient way for institutional investors to gain exposure to bitcoin without having to deal with the technical and regulatory challenges of holding and transferring the actual cryptocurrency. The BDR holders can also enjoy direct ownership and control of their bitcoin, as they can redeem their BDRs for the underlying bitcoin at any time.

According to a Bloomberg report, RDC is planning to issue the first BDRs to qualified global institutional investors in transactions exempt from registration under the Securities Act of 1933. This means that the BDRs do not need the approval of the Securities and Exchange Commission (SEC), which has been notoriously reluctant to approve any bitcoin-related products in the US. The offering is expected to go live in the coming weeks.

Ankit Mehta, the co-founder and chief executive of RDC, stated the following in an interview with Bloomberg:

We are really a conversion tool for asset owners today, whether they are hedge funds, family offices, corporations, large institutional investors, that want to take their bitcoin and convert it into a DTC-eligible security and enjoy direct ownership in the US clearances.

The BDR is seen as a potential game-changer for the crypto market, as it could open the door for more institutional adoption and liquidity for bitcoin. The BDR could also offer a competitive advantage over other bitcoin products, such as the Grayscale Bitcoin Trust (GBTC), which trades at a discount to the net asset value of its bitcoin holdings, and the bitcoin exchange-traded funds (ETFs), which are still awaiting the SEC’s approval.

Grayscale, VanEck, and ARK To Trade Their Bitcoin ETFs On Exchanges

A bitcoin ETF, or exchange-traded fund, is a type of investment vehicle that tracks the price of bitcoin and allows investors to buy and sell shares of the fund on a regulated exchange. A bitcoin ETF is considered to be a more efficient and accessible way to invest in bitcoin, as it eliminates the need for investors to buy, store, and secure the actual cryptocurrency. A bitcoin ETF is also expected to bring more legitimacy and transparency to the crypto market, as it would be subject to the oversight and regulation of the SEC.

However, the SEC has not approved any bitcoin ETFs in the US so far, citing concerns over market manipulation, fraud, custody, and investor protection. The SEC has rejected or delayed dozens of applications for bitcoin ETFs over the years, frustrating many crypto proponents and investors.
Despite the regulatory hurdles, several asset managers have not given up on their quest to launch a bitcoin ETF in the US. Among them are Grayscale, VanEck, and ARK Invest, which have recently registered their shares of their spot bitcoin ETFs to trade on their respective exchanges.

Grayscale is the largest digital asset manager in the world, with over $40 billion in assets under management. The company is best known for its GBTC, which is the largest and most popular bitcoin trust in the market. However, as mentioned earlier, the GBTC suffers from a persistent discount to its net asset value, which means that investors are paying less for the shares than the actual value of the bitcoin they represent. This discount erodes the returns and attractiveness of the GBTC, and also exposes it to the risk of arbitrage and competition from other products.

To address this issue, Grayscale announced in October 2021 that it would convert its GBTC into a spot bitcoin ETF, pending the SEC’s approval. The conversion would allow the GBTC holders to exchange their shares for the ETF shares, which would trade at the same price as
the bitcoin price. The conversion would also eliminate the need for the GBTC to trade at a premium to create new shares, which would reduce the fees and expenses for the investors.
To prepare for the conversion, Grayscale used Form 8-A to register its shares as securities listed on the New York Stock Exchange Arca on January 4, 2024. The registration is effective immediately, but it does not mean that the SEC has approved the bitcoin ETF. Grayscale still needs to file a separate application for the ETF and obtain the SEC’s permission to commence trading.

VanEck is another prominent asset manager that has been pursuing a bitcoin ETF in the US for a long time. The company first filed for a bitcoin ETF in 2016, but withdrew its application after the SEC rejected it. Since then, VanEck has filed and refiled several times, but none of its applications have been approved by the SEC. The company also launched a bitcoin ETF in Canada and Europe, where the regulators are more receptive to the crypto industry.

VanEck’s latest attempt is the VanEck Bitcoin Trust, which is a spot bitcoin ETF that aims to track the performance of the MVIS CryptoCompare Bitcoin Benchmark Rate, an index that measures the price of bitcoin across multiple exchanges. The trust will hold bitcoin in cold storage with a qualified custodian and will charge a 0.49% annual fee.

Similar to Grayscale, VanEck used Form 8-A to register its shares as securities listed on the Cboe BZX Exchange on January 4, 2024. The registration is effective immediately, but it does not mean that the SEC has approved the bitcoin ETF. VanEck still needs to file a separate application for the ETF and obtain the SEC’s permission to commence trading.

ARK Invest is a leading innovation-focused asset manager, founded and led by Cathie Wood, a renowned investor and crypto supporter. The company is known for its actively managed ETFs that invest in disruptive and emerging technologies, such as artificial intelligence, biotechnology, fintech, and blockchain. The company also holds a significant amount of GBTC in some of its ETFs, such as the ARK Innovation ETF and the ARK Next Generation Internet ETF.

ARK Invest’s latest venture is the ARK 21Shares Bitcoin ETF, which is a spot bitcoin ETF that aims to track the performance of the S&P Bitcoin Index, an index that measures the price of bitcoin across multiple exchanges. The ETF will hold bitcoin in cold storage with a qualified custodian and will charge a 0.95% annual fee.

Like Grayscale and VanEck, ARK Invest used Form 8-A to register its shares as securities listed on the Cboe BZX Exchange on January 4, 2024. The registration is effective immediately, but it does not mean that the SEC has approved the bitcoin ETF. ARK Invest still needs to file a separate application for the ETF and obtain the SEC’s permission to commence trading.

Conclusion

The crypto market is constantly evolving and presenting new opportunities and challenges for investors and enthusiasts. The recent news about CryptoZoo, Bitcoin depositary receipts, and Bitcoin ETFs are some examples of how the crypto space is becoming more diverse, innovative, and mainstream. However, they also highlight the risks and uncertainties that come with the crypto industry, such as regulatory hurdles, legal disputes, and market volatility. Therefore, it is important for anyone interested in the crypto market to do their own research, due diligence, and risk management before making any investment decisions.

Disclaimer: The information and content provided in this article are for informational and educational purposes only and do not constitute any financial, investment, or legal advice. Trading, buying, or investing in cryptocurrencies involves significant risks and may result in the loss of your capital. You should do your own research and consult a professional before making any decisions. This article is not a suggestion or an endorsement of any cryptocurrency or platform.

I hope you enjoyed this edition of the crypto news roundup, and that you learned something new and useful. If you did, please share this article with your friends and family, and subscribe to me for more updates and insights. Thank you for reading, and happy crypto!