BlackRock Pushes for 12-Hour Bitcoin Withdrawals Amid Bitfarms and Riot Platforms Dispute Resolution

• The longstanding corporate dispute between Bitfarms and Riot Platforms has finally been settled, bringing significant governance changes.
• Both companies have agreed to a standstill arrangement, halting any further hostile actions until 2026.
• “This resolution is expected to restore leadership stability at Bitfarms,” stated an insider familiar with the matter.

Bitfarms and Riot Platforms resolve prolonged corporate disputes, while BlackRock makes significant strides in Bitcoin ETF management. Read on for a comprehensive overview of these pivotal developments in the crypto industry.

Resolution of the Bitfarms and Riot Platforms Dispute

On September 23, Bitfarms and Riot Platforms announced a settlement ending months of corporate strife. A critical part of this agreement involves governance changes. Riot, which holds an 18.9% stake in Bitfarms, agreed to withdraw its earlier board proposals and supported the expansion of the board which includes adding Amy Freedman and another member. Concurrently, Andrés Finkielsztain stepped down from his role.

Governance Changes and Standstill Agreement

In addition to expanding the board, both companies agreed to a standstill arrangement, preventing any hostile actions until 2026. This move aims to bring stability to Bitfarms’ leadership, especially after disputes linked to former CEO Geoffrey Morphy. With Riot pushing for board changes and a takeover since May 2024, the settlement is seen as a crucial turning point in their corporate relationship.

BNY Mellon Nears Crypto Custody Services for ETFs

BNY Mellon could soon offer Bitcoin and Ether custody services to its ETF clients. This development follows the Securities and Exchange Commission (SEC) easing its stance on crypto accounting rules under the Staff Accounting Bulletin (SAB) 121. The revision exempts BNY Mellon from the rule requiring firms to record crypto assets as liabilities. However, the company still needs authorization from other regulators. The SEC stated, “Certain broker-dealers and custody banks have sufficiently demonstrated to SEC staff that their fact patterns are different from those described in SAB 121.”

Impact on the Crypto Industry

This exemption for BNY Mellon is viewed as a potential breakthrough for other financial institutions awaiting similar relief. Since the introduction of SAB 121 in April 2022, many firms in the crypto industry have faced setbacks. The SEC’s recent flexibility could pave the way for broader adoption of crypto custody services within the traditional financial sector.

BlackRock Amends Bitcoin ETF Withdrawal Guidelines

BlackRock has made a significant amendment to its Bitcoin ETF, requiring Coinbase, the ETF’s custodian, to process withdrawals within 12 hours of a client request. This move addresses investor concerns regarding Coinbase’s onchain settlement practices, as some investors had questioned whether the Bitcoin ETFs were fully backed by actual BTC. Coinbase CEO Brian Armstrong emphasized that all ETF transactions are settled onchain, even though not all ETF addresses are publicly shared.

Strengthening Investor Confidence

This amendment is a strategic step to bolster investor confidence in the legitimacy and backing of Bitcoin ETFs. Coinbase remains the custodian for the majority of spot Bitcoin ETFs and several recently approved Ether ETFs in the U.S.

PayPal Expands Crypto Services to Business Accounts

PayPal has widened its crypto services to include business accounts, enabling U.S. merchants (excluding New York) to buy, sell, and trade cryptocurrencies. Business users now have access to the same crypto functionalities available to individual users, including the option to withdraw assets to external wallets or cold storage. PayPal’s expansion comes in response to increasing demand for crypto services among merchants. Since 2020, PayPal has allowed retail customers to handle crypto directly through their PayPal and Venmo accounts.

Terraform Labs to Wind Down Amid Bankruptcy

Facing bankruptcy, Terraform Labs has announced plans to close several products and services by October 30 unless third parties take them over. The company had settled with the SEC earlier in June 2023. Currently, ongoing discussions with potential buyers have yet to produce definitive results. Terraform Labs has urged its community to assume responsibility for some of the services listed for closure or sale, including the Luna Foundation Guard and blockchain APIs.

Conclusion

The crypto industry is witnessing significant transformations, from corporate settlements and regulatory changes to service expansions and closures. The resolution between Bitfarms and Riot Platforms, BNY Mellon’s impending crypto custody services, BlackRock’s ETF amendments, PayPal’s expanded crypto offering, and Terraform Labs’ wind-down reflect a sector in dynamic flux. These developments highlight the importance of governance, regulatory adaptability, and the growing integration of cryptocurrencies in traditional financial and business ecosystems.