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Bitcoin Daily: Bitcoin Mine Operator Planning IPO; Swedish Financial Authority Warns Consumers Of Crypto Risks

DATE POSTED:February 22, 2021

Bitcoin mine operator Northern Data AG is planning to go public and could raise up to $500 million in the initial public offering (IPO), Bloomberg reported.

The U.S. IPO would boost the Frankfurt-based company’s “global profile,” according to Bloomberg, citing people “familiar with the matter.”

Northern Data’s largest computing center in Rockdale, Texas, is the world’s largest bitcoin mine, Bloomberg noted.

In other news, Finansinspektionen (FI), Sweden’s financial supervisory authority, warned consumers of the risks of investing in crypto assets after conducting a review of the market, according to a press release.

“Products based on crypto-assets are unsuitable for most, if not all, retail consumers,” said FI’s Director General Erik Thedéen in the release.

Consumers who invest in crypto are at a high risk of losing money, the release stated, and they lack consumer protection regulations that apply to other investment types. And assets are “impossible” to value.

“And crypto-assets are difficult, if not impossible, to value on a credible basis,” Thedéen added in the release.

Meanwhile, the Securities and Exchange Board of India (SEBI) wants to make promoters of company IPOs sell off their cryptocurrency assets before raising funds, The Economic Times reported.

The move is informal as of yet, people familiar with the matter told the publication, and it stems from the possibility that the Indian government might ban cryptocurrencies that are not state-issued. SEBI has been communicating the directive with company executives, bankers and securities lawyers.

SEBI’s concern, according to the report, is that money raised through an IPO could be used for buying or selling illegal assets, if private cryptocurrencies are banned.

“The market regulator seems to think that this could become a risk for investors if a promoter holds an asset that is illegal in the country,” a top securities lawyer said in the report.

Promoters who want to keep their assets could sign an affidavit promising to sell cryptocurrency holdings within 24 hours if the government bans them, but they should also mention their holdings in the prospectus, the report stated.

Others said in the report that a promoter holding cryptocurrency doesn’t necessarily put the company at risk. Likewise, promoters could shift their holdings overseas to evade the rule.

“It seems that the regulator is being over cautious here, and it appears like a case of overreach,” Vatsal Gaur, partner at Pier Counsel Law Firm, said per the report.

In other news, Australian police arrested a man for money laundering in New South Wales on Monday (Feb. 22), CoinDesk reported.

Police said Yi Zhong tried to convert $4.3 million from cash to bitcoin through a “money launderers for hire” syndicate, according to CoinDesk, citing Australian Financial Review.

Police also seized $1 million in cash, as well as cocaine and electronic devices, from his car, the report stated. More arrests are reportedly anticipated.

Lastly, after hitting record highs over the weekend, bitcoin fell over 15 percent, from above $58,300, to below $50,000, CoinDesk reported.

Bitcoin climbed back up slightly throughout the day, siting at $52,556.66, as of 9 p.m. Eastern time, but the pullback could continue, the report stated.

The pullback accelerated after U.S. Treasury Secretary Janet Yellen called bitcoin an inefficient and “highly speculative asset,” according to CoinDesk.