Paralyzing innovation or necessary regulation?

Cryptocurrencies and all their derivatives cause a lot of ink and saliva to flow. After many protests for a regulation of these assets, the SEC still does not seem convinced. A commission commissioner’s comment created general surprise at a conference on exchange-traded cash funds (spot ETFs).

Hester Peirce wants the SEC to accept spot ETFs

The cryptocurrency market has been undergoing some troubled events lately. The price of almost all cryptocurrencies is in the red. While negotiations are ongoing, investors are not seeing the current situation in a good light. However, the optimism of some market participants may provide renewed hope. More good news could also come in this sector which is going through its darkest period.

A few days ago, one of the commissioners protested the Securities and Exchange Commission (SEC) attitude regarding spot ETFs. As a result, the agency adopts some unorthodox practices when it comes to funds traded in cryptocurrencies. Hester M. Peirce spoke on June 14 at a conference on the Crypto Ecosystem Regulatory Transparency project.

For her, the SEC should stop denying the existence of spot ETFs. The expansion of cryptocurrencies is the subject of much controversy. Financial institutions see them as a threat to the current system. Consequently, their value remains mixed. The lack of regulation on cryptocurrencies is also a brake on the adoption of the spot cryptocurrency exchange. More and more people are wondering when the SEC will finally approve a Bitcoin (BTC) ETP.

For those who don’t know what it is, crypto spot ETFs are new forms of assets. They allow traders to invest in a cryptocurrency without actually buying the asset. The big advantage of this method is that investors can access certain cryptocurrencies without using a wallet or signing up on a platform. Despite all the talk, the SEC sticks to its decision. He tried to explain himself but his explanations do not pass. First for Grayscale, then for Commissioner Peirce.

Hester Peirce

The reasons of the SEC do not pass!

The existence of ETFs based on futures contracts was first approved by the SEC in 1992. However, the creation of so-called “spot” ETFs does not go through this regulatory body. Crypto assets present many risks and you simply cannot accept this new method without studying its contours. For the US commission, spot ETFs have many shortcomings, both in terms of transparency, liquidity and relevance.

As a result, they can quickly turn into fraudulent practices. Since February, investors have been on high alert and awaiting a decision that is not forthcoming. Faced with this situation, Hester Peirce criticizes the SEC’s persistent refusal to approve a spot ETF on Bitcoin. In support of your words, you take the example of the countries that have adopted them. In addition to being of great interest to investors, no incidents have yet been reported. In Canada, investors already have access to this service to place their investments.

Additionally, the first Bitcoin spot ETF reached CAD $ 1 billion in assets under management just a year after its launch. Therefore, the neighboring country has been using this method since 2020. As a result, it doesn’t understand why the SEC is taking so long to give its approval to the United States. It should be noted that these assets are very popular in Europe where the cumulative value of the assets amounts to approximately $ 7 billion.

The SEC is still reluctant to approve spot ETFs. While investors see it as a good plan to maximize earnings, the regulator sees it as a problem. Indeed, the commission believes they will cause more accidents than necessary. This opinion is not unanimous as one of the commissioners is against it.

Source: Finbold

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Eddy Senga

The world is changing and adaptation is the best weapon to survive in this undulating universe. As the crypto community manager at the base, I am interested in anything directly or indirectly related to the blockchain and its derivatives. To share my experience and introduce a field that fascinates me, nothing better than to write informative articles and relax at the same time.

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