SEC’s Inaction on Spot Bitcoin ETF Is “Complete and Total Disaster”, Says Cameron Winklevoss

[ad_1]

Cameron Winklevoss slammed the Securities and Exchange Commission (SEC) for a history of failure on Saturday, noting that it’s been ten years since the agency received what he called the first Bitcoin ETF application and killed it. .

The Winklevoss twins, who co-founded crypto exchange Gemini, first filed a Bitcoin ETF-like trust in July 2013, moving early to establish an investment vehicle that tracks the price of Bitcoin and trades from the same way as stocks on exchanges like the Nasdaq.

Winklevoss’ initial filing, along with a second attempt in 2018, was ultimately rejected by the SEC. While Bitcoin futures-based ETFs have since received the regulatory green light in the United States, the SEC says that no spot ETF arrangement proposed so far is sufficient to protect investors against acts and fraudulent and manipulative practices.

So, on the first anniversary of the 10-year filing, Winklevoss called out the agency for supposedly dragging its feet, acknowledging that all other applications for a spot-based Bitcoin ETF were also snuffed out.

The SEC’s refusal to approve these products for a decade has been a complete and utter disaster for US investors, he said, adding that the agencies’ reluctance demonstrates what a failed regulator the SEC is.

Those failures, according to Winklevoss, include depriving investors of the best investment opportunity of the past decade. Or, as Winklevoss puts it, protecting investors from bitcoin exposure.

As the crypto market retreated after the SEC bomb lawsuits against Binance and Coinbase on June 5, BlackRocks gambit to establish a spot Bitcoin ETF two weeks later rekindled optimism on Crypto Twitter and pushed Bitcoin higher . Capping a wave of bitcoin ETF apps from other companies that followed, including Invesco, Wisdom Tree, and Valkyrie, Fidelity put its hat back in the ring last week.

However, the SEC believes that recent Bitcoin ETF applications from BlackRock and Fidelity are not sufficiently clear and comprehensive, according to a Wall Street Journal report.

Winklevoss says the complete lack of options for spot Bitcoin ETFs drove US investors to Grayscales Bitcoin Trust. Shares of Grayscales Bitcoin Trust, launched in 2013, are currently trading at a discount to its Bitcoin holdings due to shareholders’ inability to redeem their shares.

While Winklevoss called the product toxic, he didn’t mention that converting Grayscales Bitcoin Trust to an ETF would likely fix this discount, and the company is currently suing the SEC for repeated refusals to do just that.

Winklevoss joined a chorus of critics who say SEC Chairman Gary Gensler is pushing innovation overseas, and said the agency has meanwhile nudged investors into the arms of FTX and had them victims of one of the greatest financial frauds in modern history.

Sam Bankman-Fried, the former CEO and founder of FTX, has pleaded not guilty to a litany of charges he faces for his conduct at the collapsed exchange, including fraud.

Sending investors overseas seeking exposure to Bitcoin has also led them to do business with unlicensed and unregulated sites, Winklevoss claimed.

Gemini and the SEC are not on good terms. The regulatory agency accused Gemini of violating securities laws in January, alleging that its Gemini Earn product constituted an unregistered securities offering. Retail investors could previously lend their crypto to the now-bankrupt Genesis Company, which was also charged by the SEC in exchange for deposit interest.

Notably, Genesis and Grayscale are both owned by Digital Currency Group. And Genesis and Gemini fell out over a $900 million loan Gemini made to the crypto lender.

Winklevoss considered legal action against DCG and company CEO Barry Silbert earlier this year, but Gemini, Genesis and DCG reached a tentative agreement in February. However, Gemini said DCG missed repayment of a $630 million loan last month and was in danger of defaulting.

Winklevoss expressed hope that the SEC will reflect on its dismal record and focus on its stated duties, instead of overstepping its statutory authority and trying to act as the guardian of economic life.

Additionally, Winklevoss ended his post with praise for everyone fighting to bring U.S. spot Bitcoin ETFs to life, which in practice may exclude some companies that have pending claims or lawsuits.

[ad_2]