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Asset Manager WisdomTree launches Bitcoin-based exchange-traded product

One of the world's largest asset managers, WisdomTree, headquartered in New York, has listed its first Bitcoin Exchange Traded Product (ETP) on the SIX Swiss Stock Exchange. The company announced this in a press release published on December 3, 2019.

New York-based WisdomTree, one of the largest providers of Exchange Traded Funds (ETFs) in the United States, yesterday launched a new Bitcoin Exchange Traded Product (ETP) on the SIX Swiss Stock Exchange. This is the first product of the company that tracks Bitcoin and gives investors the ability to invest in cryptocurrency without having to manage their own wallet.

Such products theoretically open up bitcoin investment to mainstream traders, bypassing the need for individual private keys and reducing the likelihood of theft and cyber-attacks. According to the WisdomTree announcement, all Bitcoin funds that support the ETP are kept offline in the Cold Wallet.

Alexis Marinof, Head of Europe, WisdomTree:

We have been monitoring cryptocurrencies for some time and are excited to bring investors secure access to this developing asset class. We have seen enough to believe that digital assets, like Bitcoin, are not a passing trend and can play a role in portfolios. WisdomTree has a history of bringing innovative investment themes to a broad market through institutional-class products, allowing investors to take exposures in difficult-to-access asset classes - we see many parallels between the cryptocurrency space and commodities in this regard. The introduction of cryptocurrencies in an ETP structure will enable investors to find new ways to introduce digital assets into portfolios while still relying on the safety and security that they have come to expect from WisdomTree.

ETPs are slightly different from ETFs, which Bitcoin and other crypto lovers have undoubtedly become familiar with in recent years, as such proposed products have attracted attention. Put simply, ETFs are a kind of ETP, although ETFs are subject to different legal requirements and thus to greater regulatory control. However, both products offer the promise of a generous, institutional investment in the world of Bitcoin and other cryptocurrencies for which WisdomTree expects strong demand.

Rafi Aviav, Head of Product Development, Capital Markets and Technology at WisdomTree, adds:

Cryptocurrencies are potentially the next asset class to benefit from increased interest when they become accessible in an ETP structure. We have developed a solution which addresses the difficulties investors face in accessing digital assets and are bridging the gap between the underlying decentralised online blockchain technology and traditional investment structures. The ETP wrapper will add new dimensions to the cryptocurrency universe including institutional class custody solutions for investors, easier trading incorporated into standard brokerage and account maintenance procedures, more liquid and transparent trading and a broader array of more sophisticated market participants entering the arena for these products.

WisdomTree is the market leader in physical gold ETPs in Europe. In 2003, the company launched the world's first physically backed gold ETP2. Today's launch of the WisdomTree Bitcoin ETP continues this tradition of innovation, expressing the company's deep expertise in the field of physically secured ETPs.

Similar to physical gold ETPs, WisdomTree Bitcoin ETP investors are entitled to a certain amount of bitcoins. Investors can view their pro rata bitcoin entitlement as well as the total amount of covert bitcoins held on the WisdomTree website. To ensure the highest level of security, WisdomTree employs digital asset managers that manage high-security cold storages. These specialists use sophisticated physical and digital security procedures, as well as state-of-the-art technologies to securely generate keys, encrypt data, and create and verify digital signatures required to handle and preserve cryptocurrencies. WisdomTree uses this approach to address one of the key barriers currently hindering the introduction of cryptocurrency by investors.

At the moment, WisdomTree uses the cryptocurrency ETP only for professional investors. However, the company is confident that regulatory approval for this product will be available to broader audiences in the near future, thereby addressing the important regulatory barrier.

Jonathan Steinberg, CEO of WisdomTree, sums up:

WisdomTree has always been at the forefront of innovation and we see blockchain technology and digital currencies as being transformative for the asset management industry. Much like how the ETP structure has out-shined the antiquated mutual fund structure in significant ways, blockchain and cryptocurrencies have the potential to change how investors participate in financial markets, globally.

As the Swiss online bank Swissquote communicates in parallel, it will take over the custody of cryptocurrencies in Switzerland. The product is tradable in USD on the SIX (Symbol: BTCW) and is intended for professional investors. The cover is provided 1:1 by provisions and the product is fully covered by Bitcoin, which is held by Swissquote in Switzerland. Swissquote secures the underlying Bitcoin assets offline using secure cold storage technology. This opens up the opportunity for investors to invest in Bitcoin through a traditional financial product that ensures high security

WisdomTree currently manages more than $ 60 billion in assets globally, Reuters said. Financial instruments based on Bitcoin are becoming increasingly popular as demand among institutional investors continues to increase. However, there are still some obstacles that keep investors from investing in the market. This includes a secure storage option in the context of a certified custody solution or a corresponding hedging of the capital with warrants or a deposit insurance by the provider itself or external service providers.

Furthermore, the legal framework conditions are not sufficiently clarified in all, so that investors in some countries continue to face difficulties in the mere possession or subsequent taxation. It remains to be seen whether there will soon be a single regulatory framework in the EU and the United States.

German Postbank cooperates with Coindex and plans crypto trade

German banks are still holding back on Bitcoin trading. The coming year could finally bring the big change.

Given the usual skepticism of many banks in Germany, the rather rare messages about getting into the crypto sector are probably all the more interesting. With Postbank, one of the largest and most well-known companies in the German banking industry now dares to team up with a crypto service provider. Postbank and the company Coindex have decided to cooperate. Postbank customers who have long been thinking of trading Bitcoin and Altcoins can easily do so soon. For this purpose, Postbank customers will have access to the special Coindex trading platform.

This is how the current joint reports from the cooperation partners state. Who is Coindex? This is a young, new company with headquarters in Bielefeld. The startup will finally open its own platform doors in the first month of the new year. With the slogan "platform for intelligent crypto portfolios", the service provider definitely gets some attention from potential investors. Digital assets are expected to be tradable on an index basis from next year. At present, a revision phase is underway, and Postbank investors should be able to invest in crypto-values starting in March. Which currencies should be available at the end in detail, the Coindex website does not answer yet. However, not only Bitcoin and Ethereum are to be listed as the basis for the in-house "Cdx".

Behind the term "Cdx", the platform hides a "fully automatic dynamic index". This index should be able to map the entire crypto market. It is known that lenders do not have to create their own wallet. The normal Coindex account including legitimacy is sufficient for investments. The management is supervised by the government. The aim is to make trade as easy as it is transparent. Investor needs should be the linchpin for trading. The Postbank ask interested parties on their website also for wishes and suggestions for the upcoming trading platform. The likelihood that bank customers in Germany are able to trade next year Ethereum, Litecoin and, of course, Bitcoin is high. Politics is currently laying the foundation for a market opening. Not all crypto followers show up positive mood by reading such messages.


South Korea - new bill to legalize cryptocurrencies

The country wants to use a new law to ensure that crypto-tokens and other virtual currencies are formally classified as digital assets.

With South Korea, one of the crypto-friendliest countries now wants to create a foundation for the business of cryptocurrency companies. As officially reported in the English language version of the Korea JoongAng daily newspaper, the National Policy Committee of the South Korean National Assembly has passed a bill to regulate cryptocurrencies in the country. The law creates a framework by which crypto-tokens and other virtual currencies are formally classified as digital assets.

Crypt currency exchanges in South Korea have not been classified as financial institutions, but as information providers. Therefore, they fall under the jurisdiction of the Korean Ministry of Science and not the Korean Financial Supervisory Authority. After accusing the government of not doing enough to prevent hacking damage, the Financial Supervisory Service (FSS) said it would broaden its accounting practice to include the country's large crypto currency exchanges.

The bill also sets rules for companies related to cryptocurrencies and other virtual currencies. All companies that hold or trade in virtual currencies must now receive an ISMS (Information Security Management System) certificate from the Korea Internet and Security Agency (KISA) and become a company with digital assets at the Financial Intelligence Unit (FIU) to register.

In addition, cryptocurrency companies must ensure that their anti-money laundering systems comply with the best practices from the International Financial Services Task Force (FATF). Companies that do not comply with these standards will be punished and serious legal measures will be taken against them. After the South Korean constitutional process, it takes about a year for the law to come into force.

This is not the first time that the South Korean government has attempted to regulate the crypto space within its borders. Last year, the authorities banned the anonymous cryptocurrency trade and later introduced new anti-money laundering standards. South Korea is one of the few countries in the world that has turned out to be cryptocurrency-friendly - at a time when most nations are still grappling with the notion of decentralized ledger technology.

According to the recent report of the Central Bank of South Korea, the South Korean stock exchanges have approximately $ 1.9 billion of cryptocurrencies in their accounts.


Russia is trying to censor Bitcoin

In China, the Bitcoin trade has already been pushed into the underground - the Hong Kong protests are partly financed with Bitcoin. The Russian central bank is now examining how it they are able to censor BTC.

Even though Russia and China are not directly on the drip of the US dollar, the ruble and yuan are based on the same Fiat principle. And so these two nations have an immense interest in censoring free decentralized alternatives like Bitcoin.

In Russia it is being discussed how Bitcoin could be banned. Especially for trade against goods and services a censorship is considered, which is already well advanced. However, there is still a ban on the official definition that applies to the BTC in Russia. Because Cryptocoins are not yet clearly classified as "Money Substitute" - only when this is done, a ban can be made.

But how successful can a ban really be? There is also an active trade in Bitcoin in China. Although this is officially banned there, there are few opportunities for the state to ban trade if it is done anonymously. The same problem will also worry Russia.


Regulatory victim: CryptoBridge gives up

The Danish crypto exchange CryptoBridge gets closed. In addition to a difficult market environment, regulatory difficulties are the reason for discontinuing operations, according to the company.

The company's web site states: "We have to announce with great regret that CryptoBridge will cease operations". Deposits have been only possible until December 3, 23:59 and payouts will be possible until December 15, 23:59.

The crypto exchange also indicates that users need to verify themselves in accordance with EU directives. Otherwise, customers would not be able to withdraw their deposits.

More and more states are regulating companies in the crypto industry. For example in Germany, companies which like to keep crypto values for third parties are requiring from 2020 onwards a BaFin license. The Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, short BaFin) is a German public-law institution with legal capacity based in Frankfurt/Main and Bonn. It is subject to the legal and technical supervision of the Federal Ministry of Finance.