After Spot Bitcoin ETF Approvals, US Senators Request SEC Chair Not Approve Other Crypto ETFs

Democrats Senator Jack Reed and Senator Laphonza Butler have sent a letter to Securities and Exchange Commission (SEC) Chair Gary Gensler requesting that the regulatory agency step in to ensure that broker-dealers are providing investors with adequate disclosures regarding Bitcoin (BTC) ETFs or exchange-traded funds (which they think should actually be called ETPs or exchange-traded products). Both Senators sit on the Senate Banking Committee. In general, Republican members have been more supportive of regulated digital assets, and Democrats have either been benign or hostile to the sector.

Interestingly, Reed has also asked the SEC not to approve any other crypto-related ETFs in the future.

As stated in the letter:

“While the Bitcoin market has displayed serious weaknesses, it is nonetheless far more established and scrutinized than the market for any other cryptocurrency. However vulnerable bitcoin may be to fraud and manipulation, markets for other cryptocurrencies are far more exposed to misconduct. We do not believe that other cryptocurrencies show the trading volumes or integrity to support associated ETPs.”

Although Bitcoin is frequently used to engage in illicit activities, the broader and more traditional financial system is also contributing to large volumes of illegal transactions. It can be a lot easier to carry large sums of cash and perform unlawful transactions with fiat money. Meanwhile, all BTC transactions and those with other blockchain-based cryptocurrencies can be reliably and accurately traced via transparent and immutable distributed ledgers.

Approving more ETPs / ETFs, especially spot Ethereum (ETH) ETFs, will allow the digital assets ecosystem to grow in a more sustainable manner. Reputable financial institutions such as BlackRock are now leading the way when it comes to introducing spot Bitcoin ETFs to their clients.

It has now become clear that the Bitcoin, Ethereum, and broader crypto markets are not just “here to stay,” but they are also going to play a key role in the future of finance. For instance, stablecoins like USDT and USDC, which are reliably pegged 1 to 1 to the US dollar, have proven their resilience over the years. Spot crypto ETFs may be a good long-term investment and/or trading product that may become a vital part of a well-balanced portfolio.

Moreover, while the government may have protection responsibilities, the merit of the asset is the responsibility of the investor, who can determine how they manage their own funds.

We will likely see many more crypto ETPs / ETFs approved in the foreseeable future, which will bring even more stability to the crypto-assets markets globally. Several sponsors in the US are already prepping for an Ethereum ETP. In Europe, ETH ETPs already trade.


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