Better Markets, a cryptocurrency-skeptic non-profit, has urged the SEC to reject Bitcoin ETF spot.

adminJanuary 7, 2024

Better Markets, a nonpartisan, non-profit group that lobbies for stricter financial regulation, has written a comment letter urging the Securities and Exchange Commission (SEC) to reject several pending applications for a Bitcoin-traded ETF or exchange-traded fund. submitted. , a product strongly desired by cryptocurrency supporters.

Dennis M. Kelleher, CEO and co-founder of Better Markets, wrote in a letter that the SEC’s approval of a spot Bitcoin ETF would pose a “serious threat” to investors and result in “…speculative, volatile and socially useless” outcomes. claimed that it would result in “We provide financial products to tens of millions of American investors and retirees.”

Kelleher said that if the SEC approves a spot Bitcoin ETF, it would set a dangerous precedent, making it more difficult for the agency to win future legal battles and making it more difficult for the cryptocurrency industry to “see countless retirement savers… diversifying their portfolios into cryptocurrencies.” do.

Kelleher’s complaint

In his letter, Kelleher made several specific arguments against approving a spot Bitcoin ETF. As for the underlying merits of whether the Bitcoin market is mature enough to warrant an ETF, Kelleher rejects that notion, citing the potential for wash trading and the concentration of Bitcoin among minority owners.

“The potential for fraud in the spot Bitcoin market is so great that exchanges’ rules cannot allow the listing and trading of spot Bitcoin ETPs, and there is still a need for exchanges to design their rules to prevent and protect against fraud and manipulation.” It is consistent with the interests of investors and the public interest,” Kelleher wrote.

Kelleher also appears to be arguing that Bitcoin’s volatility itself should disqualify the product from being offered to investors. “Here’s a simple chart that shows how the Bitcoin price can remain stagnant for long periods of time and then experience sharp fluctuations during other periods. Spot Bitcoin ETPs pose risks to the public that are inconsistent with investor protection obligations and the public interest. points out.”

Kelleher also argued that regulated markets are too small to prevent manipulation and that surveillance sharing contracts would do little to curb it, and concluded by calling the potential approval of a spot Bitcoin ETF a “regulatory mistake of historic proportions.” .

What is a better market?

Better Markets, a nonprofit, nonpartisan organization, lobbies for greater financial regulation on Wall Street. The organization was once described by the New York Times as “Occupy Wall Street’s suit-wearing cousin.”

The lobbying firm caught the eye of FTX, which at one point offered to donate $1 million to the organization to support the cryptocurrency company’s application for CFTC approval. Kelleher loudly rejected the donations, calling them “direct quid pro quo” and urged the CFTC to deny the application.

Lobbying firms have been constantly criticizing cryptocurrencies. The new letter is the latest in a series of similar petitions to lawmakers and regulators to stop expanding regulatory acceptance of cryptocurrencies. The organization, which has received endorsements from President Barack Obama, Sen. Elizabeth Warren and current SEC Chairman Gary Gensler, among others, spent a total of $3 million in 2022, according to its annual report.

Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.

adminJanuary 7, 2024