Bitcoin ETF candidates accuse SEC of foul play


Last month, the Securities and Exchange Commission (SEC) delayed another Bitcoin ETF application, this time by Cboe World Markets Inc. The US regulator has said it will seek more public consultations on the matter before making a decision.

This makes 13 Bitcoin ETFs currently pending approval, according to Market insider. Some fund managers say this indicates a double standard. More worryingly, the backlog also suggests anti-crypto sentiment.

Bitcoin lacks protections for investors

A Bitcoin ETF would track the price of digital currency, allowing investors to buy into the ETF without trading Bitcoin itself. In other words, it allows for exposure without having to deal with the custody and security issues associated with owning cryptocurrency.

This type of compromise is suitable for mass market investors, and if such an investment product existed (in the United States), it would open up capital inflows into the Bitcoin market.

SEC Commissioner Hester Peirce recently said her agency’s approach to the matter is outdated, even bordering on double standards. She said a Bitcoin ETF should have been approved a long time ago.

On this subject, SEC Chairman Gary Gensler has previously expressed concerns about fraud, volatility and manipulation in the underlying Bitcoin market. He recently said CNBC that the crypto spot markets do not have the same investor protection as the stock or derivative markets.

“Investors should be aware, I say this in my own voice, that the underlying cash markets of Bitcoin, there is not the robust oversight that you have in the stock markets or the derivatives markets…”

ETF applicants have their say

Supporters of Bitcoin ETFs claim that problems such as fraud, volatility and manipulation exist in existing markets. But that hasn’t stopped the SEC from approving ETF products based on these markets.

Does Rhind, the CEO of GraniteShares, who deposited a bitcoin futures ETF in 2017, called the malaise surrounding Bitcoin fraud and manipulation a deceptive distraction. He points out that there are ETFs for penny stocks and oil.

“There are many markets open to manipulation, but that doesn’t prevent them from existing or people launching products there. “

Ryan Louvar, General Counsel at WisdomTree, which manages several European Bitcoin ETFs, and deposit for one in the US in March, echoes Rhind’s point of view. Louvar said as the SEC continues to delay, demand is not decreasing. The end result is that “crypto-curious” individuals are left with more questionable choices.

However, Osprey Funds CEO Greg King said the SEC was doing the right thing in approaching the matter with caution. He raised the point that giving it the green light could have ramifications elsewhere.

“Must be thinking behind the back of their head – how is that going to set a precedent for anything else?” “

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