On March 11, two US senators sent a letter to the Chairman SEC Gary Gensler demanding that he stop approving new exchange-traded funds based on digital assets, citing “enormous risks.”
The success of the BTC spot products clearly ruffling some feathers on the Hill. @SenatorJackReed and @Senlaphonza write to the @SECGov vovava:
-no further ETPs for other tokens
-make life difficult (ie examinations/reviews) for brokers and advisers that recommend BTC ETPs pic.twitter.com/enxdumC02N— Alexander Grieve (@AlexanderGrieve) March 14, 2024
Jack Reed and LaFonza Butler believe that the launch of any other cryptocurrency ETFs will lead to problems for investors in markets rife with fraud and speculation.
Senators asked the SEC not to allow the approval of spot Bitcoin ETFs to become a precedent for future decisions.
Although digital gold has demonstrated “serious weakness,” it is more stable and researched than other cryptocurrencies, which are “more susceptible to improper manipulation,” the paper’s authors said.
The senators also called on the Commission to take “several concrete steps” regarding products already launched. They demanded that Bitcoin ETF brokers and advisors be subject to increased regulatory scrutiny.
Alexander Grieve, head of communications at the venture capital company Paradigm, suggested that the success of spot funds for the first cryptocurrency “clearly ruffled feathers [правительственной] tops.”
The blockbuster success of the Bitcoin ETF is upsetting to high ranking Dems. Buyer's remorse. This is part of why we are pessimistic re spot Eth etf approval chances. https://t.co/SGEAkGQGyD
— Eric Balchunas (@EricBalchunas) March 14, 2024
On March 11, Balchunas halved the probability of registering an ETF based on the second largest cryptocurrency by capitalization in May – from 70% to 35%. However, he stressed that the product will be approved in the long term.
The chief lawyer of the Coinbase crypto exchange, Paul Grewal, did not agree with the senators’ arguments, since “the facts suggest otherwise.”
In January, Grewal spoke negatively to the US Government Accountability Office over a report on the use of cryptocurrencies to evade sanctions. He said the department had done “zero benchmarking to hold up an industry that spends millions and millions on compliance.”
Source: Cryptocurrency
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