Crypto-currencies and all their derivatives are the subject of much ink and spit. After many protests for a regulation of these assets, the SEC still does not seem convinced. The words of a commissioner of the commission creates the general surprise at a conference on spot exchange traded funds (ETFs).
Hester Peirce wants the SEC to accept spot ETFs
The crypto market has been experiencing turbulent events recently. The price of almost all cryptos is in the red. While trading continues, investors do not look favorably on the current situation. However, perhaps the optimism of some market players can bring renewed hope. There may also be some good news coming out of this sector’s darkest hour.
A few days ago, one of the commissioners took issue with the attitude of the Securities and Exchange Commission (SEC) towards spot ETFs. For this one, the agency is adopting unorthodox practices regarding exchange-traded crypto-funds. Hester M. Peirce spoke on June 14 at a conference on the crypto ecosystem regulatory transparency project.
For her, the SEC should stop disproving the existence of spot ETFs. The expansion of crypto assets is the subject of much controversy. Financial institutions see them as a threat to the current system. As a result, their value remains mixed. The lack of regulation on cryptos is also a hindrance to the adoption of crypto spot cash trading. More and more people are wondering when the SEC will finally approve a Bitcoin ETP (BTC).
For those who don’t know what they are, crypto spot ETFs are new forms of assets. They allow traders to invest in a crypto without actually buying the asset. The big advantage of this method is that investors can access certain cryptos without using a wallet or registering on a platform. Despite all the talk, the SEC is sticking to its decision. It has tried to explain itself but its explanations do not pass. First for Grayscale, then for Commissioner Peirce.
The SEC’s reasons are not acceptable!
The existence of futures-based ETFs was first approved by the SEC in 1992. However, the creation of so-called ‘spot’ ETFs does not pass muster with this regulatory body. Crypto assets present many risks and one simply cannot accept this new method without having studied its contours. For the American commission, spot ETFs have many shortcomings, both on transparency, liquidity and relevance.
As a result, they can quickly turn into fraudulent practices. Since February, investors have been on alert and are waiting for a decision that has not come. Faced with this situation, Hester Peirce castigates the SEC’s persistent refusal to approve a Bitcoin cash ETF. To support her words, she takes the example of countries that have adopted them. In addition to being of great interest to investors, no incidents have yet been detected. In Canada, investors already have access to this service to place their investments.
In addition, the first cash-based Bitcoin ETF reached C$1 billion in assets under management just one year after its launch. Thus, the neighboring country has been operating this method since 2020. Because of this, she doesn’t understand why the SEC is taking so long to give its approval for the US. Note that these assets are very popular in Europe, where the cumulative value of the assets is about $7 billion.
The SEC is still reluctant to approve spot ETFs. While investors see it as a good plan to maximize gains, the regulator sees the problems. Indeed, the commission thinks they will cause more incidents than they need. This opinion is not unanimous since one of the commissioners is against it.
