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44-714: SecondMarket Solutions changed its name to NASDAQ Private Market after being acquired by NASDAQ in a joint venture with SharesPost. In October 2015 NASDAQ took full ownership of NASDAQ Private Market. Prior to using the name SecondMarket the company was known as Restricted Stock Partners, Inc. SecondMarket was founded in 2004 by Barry Silbert to provide liquidity for restricted securities in public companies. Beginning in early 2008, SecondMarket expanded into other asset classes—first auction‐rate securities , then bankruptcy claims , limited partnership interests, structured products ( MBS , CDO , ABS ), whole loans , private company stock , government IOUs and bitcoins . In 2007,

88-510: A market maker that typically takes the bid–ask spreads as a transaction commission for its service or, as a matching platform, simply charges fees. Some brokerages which also focus on other assets such as stocks, like Robinhood and eToro , let users purchase but not withdraw cryptocurrencies to cryptocurrency wallets . Dedicated cryptocurrency exchanges such as Binance and Coinbase do allow cryptocurrency withdrawals, however. A cryptocurrency exchange can typically send cryptocurrency to

132-717: A cryptocurrency exchange based in London , with operations in Cape Town and Singapore . At the time of the acquisition, Luno had more than 5 million customers. Digital currency exchanger A cryptocurrency exchange , or a digital currency exchange ( DCE ), is a business that allows customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money or other digital currencies. Exchanges may accept credit card payments, wire transfers or other forms of payment in exchange for digital currencies or cryptocurrencies. A cryptocurrency exchange can be

176-594: A customer to invest in a group of prominent digital currencies. The fund was approved to trade on public markets by the FINRA in October 2019. In May 2022, it was reported that Grayscale would list an exchange-traded fund (ETF) for the first time in Europe. The ETF was said to be made up of companies representing the "Future of Finance", and would begin trading on May 17. CoinDesk is a global media, research, and events platform that

220-453: A lawsuit against DCG, Gemini Trust, and Genesis Capital for allegedly defrauding more than 230,000 investors of more than $ 1.1 billion. The companies allegedly lied to investors about the expected returns on their investments and in regard to their safety, while also concealing losses from them and the public. DCG replied that they would fight the claims, and that they were “shocked by the baseless allegations.” Launched in 2013 by DCG, Genesis

264-562: A possible agreement with its creditors and DCG, wherein DCG would give its equity interest in Genesis Global Trading (GGT) to Genesis Global Holdco. DCG would also refinance its loans from Genesis and exchange its existing $ 1.1 billion promissory note for convertible preferred stock issued by DCG. However in April, some creditors walked away from the restructuring agreement. In mid-May 2023, it

308-537: A report written for the United Nations Office on Drugs and Crime . A common approach to cyber money laundering was to use a digital currency exchanger service which converted dollars into Liberty Reserve and could be sent and received anonymously. The receiver could convert the Liberty Reserve currency back into cash for a small fee. In May 2013, digital currency exchanger Liberty Reserve was shut down after

352-450: A survey by Encrybit to understand cryptocurrency exchange problems. According to the survey, the top three cryptocurrency exchanges are: Other data points in the survey included the problems that cryptocurrency traders experience with cryptocurrency exchanges and the expectation of traders. Security and high trading fees are the top concerns. The exchanges are all fairly new and privately held. Several do not report basic information such as

396-681: A user's personal cryptocurrency wallet . Some can convert digital currency balances into anonymous prepaid cards which can be used to withdraw funds from ATMs worldwide while other digital currencies are backed by real-world commodities such as gold. The creators of digital currencies are typically independent of the digital currency exchange that facilitate trading in the currency. In one type of system, digital currency providers (DCP) are businesses that keep and administer accounts for their customers, but generally do not issue digital currency to those customers directly. Customers buy or sell digital currency from digital currency exchanges, who transfer

440-580: A valuation of about US$ 150 million set in the previous round in February 2010. The World Economic Forum listed the company as a Technology Pioneer for 2011. The firm's private-company transactions totaled $ 100 million in 2009, and $ 400 million in 2010. SecondMarket takes fees from 3 to 5 percent on each trade (split evenly between buyer and seller). In March 2011, it had 53,000 registered participants, up from 35,000 in 2010, 6,500 in 2009 and 2,500 in 2008. In 2015, NASDAQ acquired Second Market Solutions, which

484-566: Is a venture capital company focusing on the digital currency market. It is located in Stamford, Connecticut . The company has the subsidiaries Foundry, Genesis , Grayscale Investments , and Luno. It also formerly owned CoinDesk . Digital Currency Group was launched in 2015 by Barry Silbert, the former CEO of SecondMarket, Inc. He began investing in blockchain technology companies in 2013. Shortly after SecondMarket’s sale, Silbert formed Digital Currency Group, with Genesis and Grayscale becoming

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528-685: Is a cryptocurrency trading, lending, and asset custody platform, targeting institutional clients and high net worth individuals. They claim to have been the first Bitcoin cryptocurrency desk. Genesis acquired the London-based cryptocurrency custodial company Volt in early 2020. Genesis' sister company Grayscale Investments had been holding its cryptocurrency assets with the company Xapo, which had been acquired by Genesis' rival Bitcoin trading company Coinbase in 2019. News media speculated that Genesis' cryptocurrency custody would be transferred away from Coinbase and made internal to Greyscale after completion of

572-671: Is managed through a subsidiary of SecondMarket, which is the Digital Currency Group and Grayscale. Grayscale also manages the Ethereum Classic Investment Trust SecondMarket (now known as the NASDAQ Private Market) announced in February 2014 that it planned to open a regulated, US-based bitcoin exchange . It was planning to spin off a separate company for all its Bitcoin activities. Barry Silbert Digital Currency Group Inc. ( DCG )

616-899: The Australian Securities and Investments Commission (ASIC). The ASIC viewed the services offered as legally requiring an Australian Financial Services License , which the companies lacked. In 2006, U.S.-based digital currency exchange business Gold Age Inc., a New York state business, was shut down by the U.S. Secret Service after operating since 2002. Business operators Arthur Budovsky and Vladimir Kats were indicted "on charges of operating an illegal digital currency exchange and money transmittal business" from their apartments, transmitting more than $ 30 million to digital currency accounts. Customers provided limited identity documentation, and could transfer funds to anyone worldwide, with fees sometimes exceeding $ 100,000. Budovsky and Kats were sentenced in 2007 to five years in prison "for engaging in

660-520: The Bahamas , was charged by the US attorney’s office for the southern district of New York with fraud , conspiracy to commit money laundering , and conspiracy to defraud the US and violate campaign finance laws. In early 2018, Bloomberg News reported the largest cryptocurrency exchanges based on the volume and estimated revenues data collected by CoinMarketCap. Similar statistics was reported on Statista in

704-540: The Financial Times reported that DCG was considering selling parts of its venture capital holdings to raise funds. On January 19, 2023, Genesis Global Capital filed for Chapter 11 bankruptcy protection, citing over 100,000 creditors and liabilities of between $ 1 billion and $ 10 billion. In February 2023, DCG struck a deal with creditors to either sell its Genesis unit or turn its equity over to creditors. Specifically, on February 6, 2023, Genesis Global Holdco announced

748-529: The New York Attorney General , who was seeking information related to the financial dealings of DCG's subsidiary Genesis. A new Chapter 11 deal was agreed on with DCG and lender Genesis Global as well as a major creditor group in late August 2023. The agreement involved paying out up to 90% of the amount owed to Genesis customers using new loans. In October 2023, the New York attorney general filed

792-478: The U.S. Securities and Exchange Commission maintained that "if a platform offers trading of digital assets that are securities and operates as an "exchange," as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration". The Commodity Futures Trading Commission now permits the trading of cryptocurrency derivatives publicly. Among

836-618: The Grayscale Bitcoin Investment Trust ( OTCQX :  GBTC ), which was the first publicly quoted security solely invested in the price of bitcoin upon its launch in 2013. As of April 2021, six of Grayscale’s funds were traded publicly on the OTCQX market: Bitcoin Cash, Grayscale Bitcoin Trust, Grayscale Ethereum Trust, Grayscale Ethereum Classic Trust, Grayscale Digital Large Cap Fund, and

880-549: The Grayscale Litecoin Trust. Grayscale Bitcoin Trust was approved for public trading by the U.S. Financial Industry Regulatory Authority (FINRA) in 2015. On January 21, 2020, Grayscale Bitcoin Trust became the first digital currency financial product to become a Securities and Exchange Commission reporting company. In 2018, Grayscale launched the Grayscale Digital Large Cap Fund which allows

924-623: The Mt. Gox hot wallet over time, beginning in late 2011. In December 2021 the MyCryptoWallet exchange called in liquidators . In June 2022, the US Securities and Exchange Commission launched an enquiry into Binance as an entity and not into the crypto products it was dealing in. On 11 November 2022, FTX , which was at that time the third largest cryptocurrency exchange by volume and valued at $ 18 billion, entered bankruptcy proceedings in

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968-604: The US court system, following what the exchange termed as "a liquidity crisis ". The financial impact of the collapse extended beyond the immediate FTX customer base, as reported, while, at a Reuters conference, financial industry executives said that "regulators must step in to protect crypto investors." Technology analyst Avivah Litan commented on the cryptocurrency ecosystem that "everything...needs to improve dramatically in terms of user experience, controls, safety, [and] customer service." On 13 December 2022, FTX founder and CEO Sam Bankman-Fried , after being extradited from

1012-688: The Volt acquisition. In late June and early July 2022, Genesis publicly disclosed that it was exposed to hundreds of millions of dollars in losses from loans to both the Hong Kong based cryptocurrency lender Babel Finance and the bankrupt cryptocurrency hedge fund Three Arrows Capital (3AC), and that its parent company DCG had taken on some of Genesis' debts in order to keep the company afloat. On August 17, 2022, Genesis CEO Michael Moro resigned to serve in an advisory position, while Chief Operating Officer (COO) Derar Islim became interim CEO. On November 1, 2022, it

1056-585: The alleged founder, Arthur Budovsky Belanchuk, and four others were arrested in Costa Rica, Spain, and New York "under charges for conspiracy to commit money laundering and conspiracy and operation of an unlicensed money transmitting business." Budovsky, a former U.S. citizen and naturalized Costa Rican, was convicted in connection with the 2006 Gold Age raid. More than $ 40 million in assets were placed under restraint pending forfeiture , and more than 30 Liberty Reserve exchanger domain names were seized. The company

1100-503: The business of transmitting money without a license , a felony violation of state banking law", ultimately receiving sentences of five years' probation. In April 2007, the U.S. government ordered E-Gold administration to lock/block approximately 58 E-Gold accounts owned and used by The Bullion Exchange, AnyGoldNow, IceGold , GitGold, The Denver Gold Exchange, GoldPouch Express, 1MDC (a Digital Gold Currency , based on e-gold ) and others, forcing G&SR (owner of OmniPay) to liquidate

1144-832: The collateralized debt obligation (CDO) and mortgage-backed security (MBS) markets. Launched in April 2009, SecondMarket's whole loans market facilitates transactions in residential, commercial and specialty loan types. SecondMarket transacts in both performing and non-performing individual loans as well as entire loan portfolios. SecondMarket's market for stock in private companies opened in April 2009 and facilitates transactions in both debt and equity securities in private companies. Through SecondMarket, private companies can opt into an organized, controlled private environment that offers early investors and employee shareholders exit opportunity prior to an IPO or M&A event. SecondMarket's government warrant market facilitates transactions in registered warrants (IOUs) issued by state governments. When

1188-473: The company raised an undisclosed amount of Series A financing from venture capital firm Pequot Ventures . In February 2010, the company raised US$ 15 million in Series B funding to aid its expansion into Asia. In November 2011, the company announced that they had closed a US$ 15 million Series C round, led by The Social+Capital Partnership . The last round of investment valued SecondMarket at US$ 200 million, up from

1232-576: The crypto exchange Luno, and the firm Foundry for crypto mining. It was also an investor in Coinbase and Kraken , the firm Circle behind the stablecoin USDC , and the analytics companies Chainalysis , Dune Analytics , Elliptic , and Etherscan . In early January 2023, DCG laid off 30% of its staff. In response to growing dispute with shareholders, Barry Silbert in early 2023 argued against debtor Cameron Winklevoss ' push to replace him as CEO. In January 2023,

1276-748: The digital currency exchanges operate outside the Western countries to avoid regulation and prosecution. However, they do handle Western fiat currencies and maintain bank accounts in several countries to facilitate deposits in various national currencies. Decentralized exchanges such as Etherdelta, IDEX and HADAX do not store users' funds on the exchange, but instead facilitate peer-to-peer cryptocurrency trading. Decentralized exchanges are resistant to security problems that affect other exchanges, but as of mid 2018 suffer from low trading volumes. In 2004 three Australian -based digital currency exchange businesses voluntarily shut down following an investigation by

1320-581: The digital currency into or out of the customer's DCP account. Some exchanges are subsidiaries of DCP, but many are legally independent businesses. The denomination of funds kept in DCP accounts may be of a real or fictitious currency. A digital currency exchange can be a brick-and-mortar business or a strictly online business. As a brick-and-mortar business, it exchanges traditional payment methods and digital currencies. As an online business, it exchanges electronically transferred money and digital currencies. Often,

1364-596: The first of the company’s subsidiaries. In November 2021, the firm relocated its Manhattan headquarters to Stamford, Connecticut . The governor of Connecticut at the time, Ned Lamont , had provided financial incentives for the company to move to Stamford, including a $ 5 million grant if Digital Currency Group created at least 300 full-time jobs in the state. As of November 2021, Digital Currency Group made over 200 investments in other cryptocurrency companies. By early 2023, DCG had over 160 companies in its portfolio, of which it had acquired 28. Subsidiaries included

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1408-539: The most popular e-currencies like E-gold, Liberty Reserve and others. Also in July 2008 E-gold's three directors accepted a bargain with the prosecutors and pleaded guilty to one count of "conspiracy to engage in money laundering" and one count of the "operation of an unlicensed money transmitting business". E-gold ceased operations in 2009. In 2013, Jean-Loup Richet, a research fellow at ESSEC ISIS, surveyed new money laundering techniques that cybercriminals were using in

1452-789: The names of the owners, financial data, or even the location of the business. By 2016, several cryptocurrency exchanges operating in the European Union obtained licenses under the EU Payment Services Directive and the EU Electronic Money Directive . The adequacy of such licenses for the operation of a cryptocurrency exchange has not been judicially tested. The European Council and the European Parliament announced that they will issue regulations to impose stricter rules targeting exchange platforms. In 2018,

1496-493: The seized assets. A few weeks later, E-Gold faced four indictments. Following the launch of a decentralized cryptocurrency bitcoin in 2008 and the subsequent introduction of other cryptocurrencies, many virtual platforms were created specifically for the exchange of decentralized cryptocurrencies. Their regulation differs from country to country. In July 2008, WebMoney changed its rules, affecting many exchanges. Since that time it became prohibited to exchange WebMoney to

1540-487: The state of California issued warrants to its creditors in mid-2009, SecondMarket opened up a market place to facilitate the trading of government IOUs. The Bitcoin Investment Trust (BIT) is a private, open-ended trust that derives its value solely from the price of bitcoin. The NASDAQ Private Market (formerly known as "SecondMarket") acts as the custodian and the trust is audited by Ernst & Young . The trust

1584-523: The summer of 2021, Foundry helped to relocate over $ 300 million worth of equipment from China to North America following the Chinese government shutdown of many cryptocurrency mining operations. Bloomberg reported in April 2023 that Foundry would stop offering free Bitcoin mining services, and between April 19 and April 22, would instead levy a pool fee on members. The services had been free since 2019. In September 2020, Digital Currency Group acquired Luno,

1628-469: The time the largest online auction platform serving the bankruptcy trade claims market. In February 2009, SecondMarket opened its marketplace to limited partnership (LP) interests , which are ownership rights in investment entities such as private equity funds, real estate funds, hedge funds, and fund of funds . Through this market, current limited partners are able to transfer future capital commitments to other investors. In April 2009, Secondmarket opened

1672-413: The unit continuing to undergo proceedings through 2023. Established in 2013, Grayscale Investments is a digital currency asset manager. It offers funds privately for institutional and accredited investors and publicly-traded products. Grayscale was the world’s largest asset manager for digital currency, as of December 2021, with more than $ 50 billion in assets under management. Grayscale also manages

1716-489: Was a competitor to NASDAQ's Private Market initiative. NASDAQ rebranded Second Market Solutions as NASDAQ Private Market. Restricted securities, SecondMarket's initial market, utilizes privately negotiated transactions to provide access to liquidity in the trillion dollar restricted securities market. SecondMarket entered into the bankruptcy claims market in June 2008 by acquiring Trade Receivable Exchange, Inc. (T-REX) of Denver, at

1760-658: Was acquired by Digital Currency Group in 2016. It reports on bitcoin blockchain daily news, provides a bitcoin price index and publishes a quarterly State of Bitcoin report. CoinDesk also hosts a conference on digital currencies and blockchain technologies named Consensus . Foundry, established in 2019, sets up and manages bitcoin mining operations in the United States and Canada. In addition to setting up and operating its own cryptocurrency mining equipment, Foundry also provides financing, specialized digital mining equipment, and expertise to other digital currency startups. In

1804-461: Was estimated to have laundered $ 6 billion in criminal proceeds. In February 2014, Mt. Gox , the largest cryptocurrency exchange at the time, suspended trading, closed its website and exchange service, and filed for bankruptcy protection in Japan from creditors. In April 2014, the company began liquidation proceedings. This was the result of a large theft of bitcoins that were stolen straight out of

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1848-419: Was reported that DCG had missed a $ 630 million payment to Gemini , while owing the company $ 1.65 billion. DCG stated that "due to the state of the broader economy and prolonged crypto winter, along with the challenging regulatory environment for digital assets in the U.S," it shut down TradeBlock, an institutional trading platform, on May 31, 2023. At that time, Luno was still owned by DCG. In July 2023, it

1892-469: Was reported that DCG would sell CoinDesk for $ 125 million. At the time, DCG had closed HQ, its wealth management unit. With Barry Silbert remaining CEO, in July 2023, DCG appointed Mark Shifke as its CFO. In July 2023, DCG's crypto lending arm Genesis Global was still undergoing bankruptcy proceedings. In July 2023, Gemini sued DCG in New York citing fraud, with the intent of reclaiming funds. In August 2023 DCG reportedly faced an unannounced probe by

1936-513: Was reported that Mark Murphy had been promoted from DCG's COO to president and had dismissed 10% of the DCG staff. On November 16, Genesis abruptly halted all Bitcoin withdrawals and loan applications for their customers, following FTX's bankruptcy filing . The next morning, Wall Street Journal reported that it had obtained confidential documents stating that Genesis had an "ongoing run on deposits". On January 19, 2023, Genesis Global Capital filed for Chapter 11 bankruptcy protection. with

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