December 2023 - cypherpunks - lists.cpunks.org

Cryptocurrency: Jamie Dimon JPMorgan Ponzi Gets Criminally Convicted on Fraud Racketeering
by grarpamp 09 Jan '24

09 Jan '24

https://nypost.com/2022/08/10/ex-jpmorgan-metals-traders-convicted-of-fraud… https://violationtracker.goodjobsfirst.org/parent/jpmorgan-chase JPMorgan fined $36B in criminal and sanctions since 2000. Cryptocurrencies never required a bailout from any Government.

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Cryptocurrency: Bankster Warren Launches WarOnCrypto To Kill Freedom, Wallets, Miners, Fight Back!!!
by grarpamp 09 Jan '24

09 Jan '24

> https://www.nobsbitcoin.com/the-digital-asset-anti-money-laundering-act-is-… > https://decrypt.co/117221/senator-warren-crypto-bill-kyc-self-custody-walle… > https://www.washingtonexaminer.com/policy/technology/elizabeth-warren-crypt… > https://www.theguardian.com/us-news/2022/dec/14/elizabeth-warren-crypto-reg… > https://cointelegraph.com/news/us-sen-elizabeth-warren-says-crypto-will-rui… > https://www.cnet.com/google-amp/news/elizabeth-warren-targets-crypto-money-… > https://www.realclearpolitics.com/2022/11/23/regulate_crypto_or_itll_take_d… > https://www.theblock.co/post/194941/warren-marshall-introduce-bill-to-tight… > > https://www.warren.senate.gov/imo/media/doc/DAAML%20Act%20of%202022.pdf > https://www.durbin.senate.gov/imo/media/doc/letter_to_fidelity_investments_… > https://www.fatf-gafi.org/media/fatf/documents/recommendations/March%202021… Elizabeth Warren’s crypto bill targets financial freedom, not fraud https://reason.com/2022/12/16/elizabeth-warrens-crypto-bill-targets-financi… Sen. Elizabeth Warren is coming after your financial privacy with her anti-crypto bill. https://www.warren.senate.gov/newsroom/press-releases/warren-marshall-intro… https://www.warren.senate.gov/download/12/15/2022/daaml-act-of-2022 https://astralcodexten.substack.com/p/why-im-less-than-infinitely-hostile https://reason.com/2021/12/01/turks-flee-to-gold-bitcoin-and-foreign-curren… https://reason.com/video/2022/03/11/the-canadian-government-couldnt-stop-bi… https://www.cnn.com/2022/02/20/americas/canada-trucker-protest-covid-sunday https://www.marshall.senate.gov/newsroom/press-releases/marshall-warren-int… https://www.wired.com/story/20-years-after-911-surveillance-has-become-a-wa… https://www.wired.com/2011/09/911-surveillance/ https://time.com/6096903/september-11-legal-history/ https://reason.com/2016/04/27/snowden-speaks/ https://www.aclu.org/news/national-security/the-privacy-lesson-of-9-11-mass… https://www.brennancenter.org/our-work/analysis-opinion/rolling-back-post-9… https://www.cato.org/blog/warren-targets-financial-privacy-wake-ftx-fall J.D. Tuccille | 12.16.2022 Senator Warren wants to extend the financial surveillance state cooked up by drug warriors and anti-terrorism fearmongers to cryptocurrencies. Beyond politically connected scammers and frothy valuations, the attractiveness of cryptocurrencies lies in their potential for doing what cash does, but across distances. When governments inflate money, people turn to other stores of value, including crypto. When politicians and their financial-sector accomplices block transactions of which they disapprove, people look for alternative means of doing deals without permission, crypto among them. So, when officials talk of stripping privacy and autonomy from cryptocurrencies such as bitcoin, you know they would do the same to cash if they could. "Rogue nations, oligarchs, drug lords, and human traffickers are using digital assets to launder billions in stolen funds, evade sanctions, and finance terrorism," Sen. Elizabeth Warren (D–Mass.) huffed this week. "The crypto industry should follow common-sense rules like banks, brokers, and Western Union, and this legislation would ensure the same standards apply across similar financial transactions. The bipartisan bill will help close crypto money laundering loopholes and strengthen enforcement to better safeguard U.S. national security." The bipartisan bill to which Warren refers sports the tendentious moniker, Digital Asset Anti-Money Laundering Act of 2022. Stripped of grandiose claims, it attempts to extend the financial surveillance state cooked up by drug warriors and anti-terrorism fearmongers to cryptocurrencies. Warren and company picked an opportune moment to do just that, while the public is occupied with a headline-grabbing financial scandal that taints crypto's already sketchy reputation. In fact, Sam Bankman-Fried's shenanigans at FTX, perhaps concealed by generous political donations, look old-school, including mingling personal and corporate funds in ways that would have raised red flags long before digital tokens. But they cast further shade over a crypto sector that had yet to gain acceptance by the American mainstream. After years of breathy warnings that cryptocurrency is shady, and speculative values detached from reality, many people are prepared to believe the worst. "Crypto is an interesting technology that had one terrible piece of bad luck: its standard-bearer, bitcoin, went up in value 10,000x over a few years," wide-ranging commentator Scott Alexander wrote earlier this month. "When something goes up in value 10,000x, it's hard to think of it in any other context. Whatever it was before, now it's 'that thing which went up in value 10,000x'." Alexander points out that, despite the shellacking the crypto sector is taking in the press and from politicians, it remains popular in countries where it's used for its intended purpose as a store of value and a means of exchange in defiance of authoritarian controls. "Vietnam uses crypto because it's terrible at banks," he notes. "There's a history of the government forcing banks to make terrible loans, and then those banks collapsing." In socialist Venezuela, "cryptocurrency provides a hard-to-ban alternative which has caught on among Venezuelan hustlers and small businessmen." This played out in Turkey when the government got serious about turning the lira into toilet paper and people bought gold, foreign currency, and bitcoin. Bitcoin also became a means for Canadian protesters to work around government attempts to financially isolate their protest movement. "Of course a technology centered around avoiding governance and banking failures will be centered in the countries with the most governance and banking failures!" Alexander adds. But any technology that can be used by good people can also be used by bad people. That's as true of window curtains as it is of crypto (or cash). The same privacy sought by a family going through evening routines might serve a terrorist building bombs, just as businesses and activists evading a hostile state might use the same currency that purchases bomb parts. Politicians love playing up potential abuses. "Following the September 11, 2001 terrorist attacks, our government enacted meaningful reforms that helped the banks cut off bad actors' from America's financial system. Applying these similar policies to cryptocurrency exchanges will prevent digital assets from being abused to finance illegal activities without limiting law-abiding American citizens' access," insists Sen. Roger Marshall (R–Kan.), co-sponsor of the Digital Asset Anti-Money Laundering Act of 2022. When politicians hold up the post-9/11 panic that supercharged the surveillance state as their model, take them seriously. The legacy of that time is widely recognized as an over-powerful government that intrudes into Americans' lives, subjecting our activities and communications to monitoring and diminishing our liberty. With their bill, Warren, Marshall, and company want to extend that surveillance to financial technology that was explicitly developed to empower individual liberty and privacy. "The bill first seeks to classify self‐<U+200B>hosted wallets as money service businesses," cautions the Cato Institute's Nicholas Anthony. "For those unfamiliar, self‐<U+200B>hosted wallets are merely the digital equivalent of a wallet in your pocket or purse. ... Where much of the financial surveillance in the United States depends on what's known as the third‐<U+200B>party doctrine, self‐<U+200B>hosted wallets offer individuals protection from government surveillance and censorship. Yet Senator Warren's bill would put an end to that protection." The bill, says Anthony, would "classify cryptocurrency miners, validators, and network participants as money service businesses." It "also sets its sights on cryptocurrency mixers" who "offer individuals the opportunity to enhance their privacy when using cryptocurrencies on public blockchains." In fact, the bill's language specifies that "the Secretary of the Treasury shall promulgate a rule that prohibits financial institutions from ... handling, using, or transacting business with digital asset mixers, privacy coins, and other anonymity-enhancing technologies." Senators Warren and Marshall talk about "terrorism" and "drug lords," but their clear goal (whether or not its within their reach, which is another matter) is to strip crypto of its ability to be used privately and without permission in the same way we use cash. Their objections to digital money also apply to banknotes and coins. Ultimately, it's not crypto they fear, but our liberty to earn, purchase, save, and donate without being impoverished, scrutinized, or stopped by government officials. Bitcoin and other digital tokens have their flaws, but they're an attempt to fulfill a widespread desire for reliable stores of value and means of exchange independent of control. And while all such forms of money are vulnerable to fraud and theft, that's already illegal. The Digital Asset Anti-Money Laundering Act of 2022 doesn't even attempt to address such crimes, instead, it's an attack on financial privacy and liberty. For all the reasons politicians are coming after crypto, you can bet that cash is next.

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Notary Public License Law (New York DEPARTMENT OF STATE Division of Licensing Services)
by Gunnar Larson 08 Jan '24

08 Jan '24

Brody Larson collates 34 highlights to Notary Public License Law (New York DEPARTMENT OF STATE Division of Licensing Services): https://drive.google.com/file/d/1L4rPu4covfuTBAEcQOlP2jS8A8XNDq9E/view?usp=…

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Cpunks List: Remove The Spammer From The List
by grarpamp 06 Jan '24

06 Jan '24

Greg, it is time for you to remove this spammer from the list. The Internet has, since its inception, mutually and universally, for good reasons, and with full conviction, wisely decided that such spammers shall be banned. This spammer has spammed over 70,000+ spams upon the list and its subscribers. All of them filled with nonsense gibberish, generated noise, and personal psychobabble crap, none of it having any relation or point to topic. This spammer has posted and admitted multiple times that they are doing it with full knowledge and intent to destroy the list and harm its subscribers. This spammer has been told to stop by everyone many times, and they have still refused to stop abusing the list with spam. This spammer has also refused the listop's directive to stop abusing the list with spam. This spammer has caused valuable contributors who are otherwise unable to filter out the abusers spam to leave the list. This includes a number of original members. This spammer is abusing members network and storage space. This spammer is causing damage to the list. This spammer is causing mail delivery problems. This spammer has destroyed usability of the web archives. This spammer is using tens of sockpuppet accounts to spam the list. This spammer has been banned for abusing other forums as well. The Internet has decreed that it is not the job of subscribers to deal with these egregiously abusive spammers. The Internet has provided three options for list operators... 1) You must kick this spammer's accounts off the list. 2) You must set the moderation flag on this spammer's accounts and deal with and filter them out yourself. 3) You must move this spammer's accounts off to a separate new list that you create for them alone. Take your pick and make it happen. The list thanks you.

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McAfee Founder’s Neighbor Dead in Belize After Dogs Poisoned
by Gunnar Larson 06 Jan '24

06 Jan '24

McAfee Founder’s Neighbor Dead in Belize After Dogs Poisoned https://www.bloomberg.com/news/articles/2012-11-12/mcafee-founder-is-suspec… John McAfee, the founder of the popular anti-virus software maker, is considered “a person of interest” in the murder of U.S. citizen Gregory Faull and has yet to be located, Belize National Security Ministry spokesman Raphael Martinez said.

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Free Julian Assange
by zeynep＠keemail.me 31 Dec '23

31 Dec '23

Julian Assange hasn’t been free for 1726 days And Happy New Year :)

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Big dog bites dead--man
by pro2rat＠yahoo.com.au 31 Dec '23

31 Dec '23

" That is not cypherpunk at all . . . ” “I know the arguments/infighting over bitcoin can be exhausting, but it’s much better than one dude dropping a diagram telling everyone how things are going to work . . " FROM https://news.bitcoin.com/ethereums-path-forward-vitalik-buterin-unveils-roa… One dude out in the Wild West posing, preening and posturing as a punk. He won't make the county line.

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Dead mans hand
by pro2rat＠yahoo.com.au 31 Dec '23

31 Dec '23

Dead mans switch Most kind of Buttface to volunteer for Bullgoose Loony, C-punk. For as soon as the cypherpunk dream - cryptoanarchism - officially succeeds he may be shot in back like Wild West, Bill was. Thanks BF. It's been real. " So Amorpheous, what you're saying is once Zk crypto succeeds there won't be any compliant exchanges in the Matrix " That is correct, Zero.. I wrote a report to council about this. And Cypher provided a minority report. Ante up or quit. Double stakes or split. I know you've got to see me. Read em and weep. Dead mans hand again.

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Why Are They Pounding the Table for PayPal Stock Heading Into 2024? | InvestorPlace
by Gunnar Larson 31 Dec '23

31 Dec '23

https://investorplace.com/2023/12/why-are-they-pounding-the-table-for-paypa… Analysts are pounding the table for Paypal (PYPL). They like its balance sheet, its new management team, and its strategy. But the Cloud Czars are coming. PYPL stock - Why Are They Pounding the Table for PayPal Stock Heading Into 2024? There seem to be more analysts pounding the table for PayPal (NASDAQ:PYPL) stock today than ever before. The stock is pretty beaten down. PYPL stock is down 9% over the last year, 67% since the start of 2022, 25% over the last five years. There has been a small December rally, but the long-term chart still looks bearish. So, what’s behind the earnest pumping of PayPal stock?

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Ark raises concern over Coinbase concentration in Bitcoin ETF filings days before potential approval
by Gunnar Larson 31 Dec '23

31 Dec '23

https://cryptoslate.com/ark-raises-concern-over-coinbase-concentration-in-b… As the anticipation of the approval of a spot Bitcoin ETF finally comes to a head, the Ark 21Shares Bitcoin Trust has made 16 significant clarifications and additions to its S1 filing across several areas, ranging from operational processes to financial responsibilities and regulatory aspects, providing a more explicit, more detailed framework for the ETF’s functioning. Change Description Index Price Update Updated the Index price for the Bitcoin – U.S. Dollar trading pair to a specific value as of December 22, 2023. Bitcoin Counterparty Definition Clarified that the third party involved in Share transactions is not an Authorized Participant but may be an affiliate. Share Redemption Process Modified the redemption process for Shares, specifying cash-only transactions and detailing responsibilities for Bitcoin Counterparties. Marketing Support Arrangements Added provisions for potential marketing support arrangements with fees payable by the Sponsor and/or Sub-Adviser. Creation and Redemption Risks Outlined risks associated with creation and redemption processes, particularly during unanticipated difficulties. Trading Balance Limitation Set a limit on the amount of bitcoin in the Trading Balance, tied to specific transactional or expense needs. Service Provider Concentration Risk Highlighted the risks associated with the Bitcoin Custodian and Prime Broker serving multiple competing products. Post-Trade Financing Agreement Update Amended details related to borrowing bitcoin or cash from the Lender to facilitate timely transactions. Interest Rate on Trade Credits Established the determination of interest rates on Trade Credits based on various factors. Authorized Participant Transaction Model Specified that Authorized Participants will only deal with cash for creating and redeeming Shares. Creation and Redemption Procedure Update Updated procedures for the creation and redemption of Baskets, including expense responsibilities. Reduced In-Kind Transaction wording Reduced the wording of the possibility of in-kind transactions for creating and redeeming Shares, pending regulatory approval. Use of Bitcoin for Expenses Indicated that the Trust might use Bitcoin to pay certain expenses, with implications under IRS guidance. Taxation Changes on Share Sales Updated tax implications for shareholders on the sale of Shares and the redemption process. Additional Expenses Disclosure Provided details on the estimated expenses related to the issuance and distribution of Shares. The revised filing specifies the CME CF Bitcoin Reference Rate – New York Variant for the Bitcoin – U.S. Dollar trading pair, setting a clear historical reference point with a rate of $43,731.74 as of December 22, 2023. This provides a precise valuation marker for the Bitcoin market at that time. Further, the role of third parties, named “Bitcoin Counterparties,” is distinctly clarified. They are identified as affiliates but not Authorized Participants, delineating their role in the purchase process of Bitcoin for the Trust. This distinction underscores the separation of responsibilities in the ETF’s operational structure. In a critical amendment regarding the roles of Authorized Participants, it’s emphasized that their involvement will be strictly in cash transactions for creating and redeeming shares. The Trust retains the sole responsibility for selecting Bitcoin Counterparties for Bitcoin transactions, underscoring an independent operational procedure. The filing also introduces new information about potential marketing support arrangements, specifying that such arrangements will not involve the Trust directly and the Sponsor will bear any associated costs and/or the Sub-Adviser. This arrangement aims to protect the Trust’s assets from being used for marketing activities. Notably, the filing addresses potential challenges in the creation and redemption process of the ETF’s Baskets. It outlines scenarios where market disruptions could impact the ETF’s ability to maintain its share price close to Bitcoin’s actual value. Provisions for suspending the creation and redemption of Baskets during significant disruptions are included, indicating a cautious approach to market volatility and operational risks. The filing also delves into the overlap in roles of the Bitcoin Custodian and Prime Broker, addressing industry concentration risks. The limitation on the amount of Bitcoin held in the Trust’s Trading Balance for transactional and expense management purposes is highlighted, reflecting a strategic approach to risk management. Further, a more defined process for borrowing bitcoin or cash from Coinbase Credit, Inc. is laid out, emphasizing efficient cash management for trade and expenses. The amendment also discusses the dynamic determination of the “Authorized Amount” of Trade Credits, adding an element of flexibility and responsiveness to market conditions. The amendment introduces a new aspect concerning the interest rates on Trade Credits, emphasizing a dynamic approach to setting these rates based on various market and credit factors. Moreover, the Trust’s decision to cover on-chain transaction fees for Bitcoin transactions is a significant operational change, simplifying the cost structure for Authorized Participants. The potential for in-kind creation and redemption of shares was shortened as it remains subject to regulatory approval and is currently uncertain. Regarding taxation, the Trust’s use of bitcoin for expenses is now interpreted as a sale, impacting tax implications. The amendment provides a more detailed view of the tax treatment for various shareholder transactions, reflecting a nuanced understanding of cryptocurrency taxation. Lastly, the “Item 13. Other Expenses of Issuance and Distribution” section in the filing offers a comprehensive overview of the estimated costs associated with issuing and distributing Shares, providing transparency on financial obligations related to the ETF offering. These amendments enhance the clarity and detail of the Ark 21Shares Bitcoin Trust’s operational, financial, and regulatory framework, addressing various complexities and risks inherent in managing a Bitcoin ETF amid an intricate and competitive scene among several other major institutional filings. Breakdown of all 16 amendments. Below is a detailed run-through of all the major amendments and their potential implications for the Bitcoin ETF filing from Ark. Index Price Update The filing was amended to specify the CME CF Bitcoin Reference Rate – New York Variant for the Bitcoin – U.S. Dollar trading pair. Initially, the document left the date and the reference rate value as placeholders. These placeholders have been updated with the amendment to reflect a specific date and value. As of December 22, 2023, the rate, which CF Benchmarks Ltd. calculates, was set at $43,731.74. This change adds a precise historical reference point to the filing, giving a clearer picture of the Bitcoin market value at that particular time. Bitcoin Counterparty Definition The filing was also amended to clarify the role and identity of the third parties involved in the process of purchasing shares for the Ark 21Shares Bitcoin ETF. Initially, the document described these third parties as potentially being affiliates of Authorized Participants, but with no clear distinction regarding their direct involvement as Authorized Participants. The amendment specifies that these third parties, referred to as “Bitcoin Counterparties,” are not Authorized Participants themselves but maybe Authorized Participants’ affiliates. This distinction is important as it clarifies the separation between the entities authorized to purchase and redeem shares directly from the Trust (Authorized Participants) and those designated to handle the actual purchase of Bitcoin equivalent to the cash deposited by the Authorized Participants (Bitcoin Counterparties). The rest of the process, as outlined in the document, remains unchanged: the Sponsor, on behalf of the Trust, instructs these Bitcoin Counterparties to purchase Bitcoin with the deposited cash and then deposit this Bitcoin into the Trust’s account with the Bitcoin Custodian, resulting in the issuance of the corresponding amount of Shares to the Authorized Participant. Share Redemption Process The roles and responsibilities of the Authorized Participants in creating and redeeming shares in the Ark 21Shares Bitcoin Trust was also clarified. The revised text emphasizes that Authorized Participants will exclusively deal in cash transactions when creating shares (investing in the Trust) and redeeming them (withdrawing from the Trust). This change highlights that Authorized Participants will neither handle Bitcoin directly nor instruct the Trust or a Bitcoin Counterparty on managing Bitcoin transactions during the share creation or redemption processes. The amendment further details that the Trust is solely responsible for choosing the Bitcoin Counterparty to facilitate Bitcoin transactions, whether receiving Bitcoin for share creation or delivering it for share redemption. This distinction is crucial as it underlines that the Bitcoin Counterparty acts independently and is not an agent of the Authorized Participant in these transactions. Additionally, the amendment names the Prime Broker and the Lender as the Bitcoin Counterparties as of the prospectus date, providing a specific reference to the entities involved in the transaction process. Overall, this amendment brings more clarity to the operational structure of the Trust, explicitly defining the roles of Authorized Participants and the Trust concerning Bitcoin transactions and identifying key entities involved in these processes. Marketing Support Arrangements Information about potential marketing support arrangements for the Trust was added. This new section specifies that the Sponsor and/or the Sub-Adviser of the Ark 21Shares Bitcoin Trust might engage in additional agreements to support the marketing of the Trust. Significantly, it is clarified that the Trust itself will not be a party to these marketing support arrangements. The amendment also addresses the financial implications of such agreements. It states that any fees or costs arising from these marketing support arrangements will be borne by the Sponsor and/or the Sub-Adviser, not the Trust itself. This clarification ensures that the financial responsibilities for marketing-related activities are explicitly assigned to the Sponsor and/or Sub-Adviser, safeguarding the Trust’s assets from being utilized for these purposes. Creation / Redemption Risks and Trading Balance Limitations If the creation and redemption process of the ETF’s Baskets (which are essentially bundles of shares) encounters unexpected difficulties, and amendment states that this could significantly impact the ETF’s ability to maintain its share price close to the actual value of Bitcoin (NAV, or Net Asset Value). These difficulties could arise from various issues, including volatility in Bitcoin’s price, problems with the Bitcoin Custodian (such as insolvency, business failure, security breaches, or operational failures), disruptions in Bitcoin trading platforms, or issues within the Bitcoin network itself, such as network outages, congestion, or high transaction fees demanded by miners. In response to these potential challenges, the ETF has provisions for suspending the creation and redemption of Baskets. This suspension could happen if, for instance, the Bitcoin network faces outages or other significant problems that disrupt transaction processing. During such suspensions, the spread in trading – the difference between the buying and selling price – may widen, leading to the ETF’s shares trading at a premium or discount compared to the actual price of Bitcoin. Moreover, if the Bitcoin market becomes less liquid, meaning it’s harder to buy and sell large amounts of Bitcoin quickly without affecting its price, this could also cause the ETF’s share price to diverge from the underlying value of Bitcoin. In a related amendment, the filing clarified limits on the amount of Bitcoin that may be held in the ETF’s Trading Balance. This balance will only contain enough Bitcoin to manage a specific creation or redemption transaction or to cover Trust Expenses that the Sponsor Fee does not already cover. This limitation is likely aimed at reducing the risk associated with holding large amounts of Bitcoin, which can be volatile and subject to various external factors that could impact its value. Service Provider Concentration Risk A detailed explanation regarding the potential overlap in the roles of the Bitcoin Custodian and Prime Broker for Ark’s 21Share Bitcoin Trust and other competing products was added. This amendment highlights the current market situation where only a limited number of digital asset intermediaries have the reputation and operational capability to serve as Bitcoin Custodian and/or Prime Broker. The concern addressed is that these service providers may also serve similar functions for competing exchange-traded products (ETPs) that offer exposure to the spot bitcoin market or other digital assets. This situation creates a risk for the Trust due to the industry concentration of these service providers. The amendment explains that sharing these custodial and brokerage services among various products might lead to fewer options for intermediaries available to the Trust. This could pose challenges in finding and appointing replacement service providers if needed. Furthermore, the amendment addresses the risk of magnified impact due to this concentration. If the Bitcoin Custodian or Prime Broker faces operational disruptions or adverse developments, it could affect the Trust and other products using the same services, leading to a broader loss of confidence in ETPs related to the spot Bitcoin market or other digital assets. Additionally, the amendment introduced a clause about the management of the Trust’s bitcoin holdings. It specifies that the amount of bitcoin held in the Trading Balance will be limited. This limitation is set to ensure that the bitcoin held is only what is necessary for processing creation or redemption transactions or for paying Trust Expenses not covered by the Sponsor. This addition aims to clarify the operational limits regarding the Trust’s bitcoin holdings, ensuring they are explicitly managed on transactional necessity and expense management. Post-Trade Financing Agreement Update Ark’s 21Shares Bitcoin Trust, in its agreement with Coinbase Credit, Inc., now has a more defined process and purpose for borrowing bitcoin or cash as trade credit. This revision elaborates on how the Trust can use borrowed funds to efficiently manage cash creations, redemptions, and payment of various expenses, including the Sponsor’s Fee. The key change is the detailed explanation of how this borrowing mechanism allows the Trust to lock in bitcoin prices at the time of trade or payment rather than waiting for the transfer of funds or bitcoin between accounts, which could be subject to delays. Additionally, the amendment clarifies the process for both purchasing and selling Bitcoin in connection with creation and redemption orders. It highlights the Trust’s strategy of borrowing either cash or bitcoin to expedite these transactions, emphasizing the aim to secure bitcoin prices swiftly rather than being delayed by fund transfers. The Trust’s acknowledgment of an unspecified maximum amount of trade credit that could be established in the future is another significant addition. This indicates a potential limit on the amount of funds the Trust can borrow, though it’s not currently defined. Furthermore, the amendment details determining the “Authorized Amount” of Trade Credits. It specifies that this amount will be decided daily at the Lender’s discretion, based on various factors, including the availability of financing and credit assessment of the Trust. This introduces a dynamic element to the amount the Trust can borrow, dependent on the Lender’s conditions and the market environment. The Lender’s discretion in extending Trade Credits, especially during material market disruptions or shortages of bitcoin for lending, is also emphasized, highlighting the conditional nature of this financial arrangement. Interest Rate on Trade Credits Ark amended the interest rates on Trade Credits, also known as the “financing fee.” This fee will now be determined daily at the discretion of the Lender. Several factors, including the availability of financing, market prices, and a credit assessment of the Trust, will influence the Lender’s decision. This change implies a more dynamic and flexible approach to setting the financing fee, potentially reflecting the volatile nature of the cryptocurrency market. Additionally, the amendment specifies the process of creating and redeeming shares within the Trust. Authorized Participants (APs) will only use cash for these transactions to create and redeem shares. Notably, APs will not engage in direct or indirect purchase, holding, delivery, or receipt of Bitcoin in the creation or redemption process. This responsibility is solely on the Trust, which will select a Bitcoin Counterparty different from the Authorized Participant for these transactions. When creating shares, the Trust will receive Bitcoin from a Bitcoin Counterparty, which it selects independently and not as an agent or under the direction of an Authorized Participant. Similarly, the Trust will send Bitcoin to a chosen Bitcoin Counterparty, again independent of the Authorized Participant, for redemption. This structure ensures that the Authorized Participants’ involvement is limited to cash transactions. At the same time, the Trust manages the Bitcoin transactions with its chosen counterparties, maintaining a clear separation of roles and responsibilities in the share creation and redemption process. Authorized Participant Transaction and Creation / Redemption Procedure Update The Ark 21Shares Bitcoin Trust will now cover the costs associated with Bitcoin-related on-chain transaction fees for both creation and redemption transactions and transactions with the Prime Broker. The Sponsor will assume these expenses as part of the Sponsor Fee. It clarifies that Authorized Participants are only responsible for cash liabilities related to creation and redemption costs, such as trading fees and slippage. This amendment simplifies the cost structure for Authorized Participants, clarifying that their financial responsibilities are limited to specific cash-related costs. Additionally, the amendment introduces a significant change regarding the potential for in-kind creation and redemption of shares, with the section reduced significantly. While the Trust may allow Authorized Participants or third parties acting on their behalf to engage in in-kind transactions for creating and redeeming shares in the future, this is subject to regulatory approval. The amendment highlights that the timing for such regulatory approval is uncertain, and no guarantee will be granted. This update implies that while the option for in-kind transactions may be considered, there is no assurance that it will be available to Authorized Participants or their third-party counterparts in the future. This change adds a layer of uncertainty regarding the operational mechanics of the Trust, particularly in terms of how shares might be created or redeemed in the future. Use of Bitcoin for Expenses and Taxation Changes on Share Sales The Trust will now explicitly use Bitcoin to cover certain expenses, a move interpreted under current IRS guidance as constituting a sale of Bitcoin. This new aspect implies that when the Trust utilizes Bitcoin for expenses, it is effectively selling that portion of it, potentially impacting its tax implications. Regarding the taxation of shareholders, the amendment clarifies and expands on the tax treatment of various transactions involving the Trust’s shares. Previously, it was outlined that when shareholders sell their shares, they are treated as selling their proportional share of the bitcoin in the Trust. The gain or loss on this sale is calculated based on the difference between the sale price of the shares and the shareholders’ tax basis in bitcoin. The recent amendment refines this by stating that the above treatment applies specifically to sales other than redemptions. Additionally, it introduces the concept of cash redemptions. In such cases, when the Trust sells bitcoin to fund a shareholder’s redemption, the gains or losses from this sale are expected to be treated as if they were incurred directly by the shareholder being redeemed. This could mean that the tax implications for the shareholder in a cash redemption scenario are directly linked to the gains or losses realized by the Trust from the sale of bitcoin used to fund that redemption. Furthermore, the amendment maintains the previous stance that a redemption of shares in exchange for the underlying bitcoin is generally not a taxable event. The shareholder’s tax basis and holding period for the bitcoin received in such redemption are aligned with their basis and holding period in the Trust’s bitcoin immediately before the redemption. Overall, these changes emphasize a more detailed and nuanced approach to the taxation of different types of transactions shareholders might engage in with the Trust, reflecting a response to the evolving understanding of cryptocurrency taxation. Additional Expenses Disclosure A new section detailing the estimated costs associated with issuing and distributing the Shares, as outlined in the Prospectus, was filled in. This section, titled “Item 13. Other Expenses of Issuance and Distribution,” provides an overview of various fees and expenses, excluding underwriting commissions and discounts, that the registrant (Ark 21Shares Bitcoin Trust) expects to incur. Significantly, the SEC registration fee is marked as “N/A,” with a note explaining that the exact amount is indeterminate at this stage. This is because the securities being registered have an unspecified quantity, and the fee will be determined under specific SEC rules. The listing fee for the Shares is specified as an actual amount of $12,000. The estimated costs include $87,000 for auditor’s fees and expenses and a substantial $670,000 for legal fees and expenses. Printing expenses are estimated at around $168,000, and miscellaneous expenses amount to $13,000. In total, the estimated expenses for issuing and distributing the Shares are projected to be $950,000. This inclusion gives potential investors and stakeholders a clearer picture of the financial obligations and costs that Ark 21Shares Bitcoin Trust anticipates concerning their ETF offering.

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