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- 1 The SEC, with its unclear regulations and the rejection of ETF applications, allegedly pushed investors to unhealthy crypto products and FTX.
- 2 The Winklevoss twins applied for ETF 10 years ago.
Gemini co-founder Cameron Winklevoss stated that the SEC’s inactivity caused investors to be exposed to toxic and unregulated crypto products. On July 2, 2023, the Winklevoss twins criticized the United States Securities and Exchange Commission (SEC) for constantly refusing to spot Bitcoin exchange-traded funds (ETF). The twins filed the documents to get their ETF approved nearly ten years ago.
Today marks 10 years since @tyler and I filed for the first spot Bitcoin ETF. The @SECGov's refusal to approve these products for a decade has been a complete and utter disaster for US investors and demonstrates how the SEC is a failed regulator. Here's why:
— Cameron Winklevoss (@cameron) July 2, 2023
-"protected"… pic.twitter.com/xmK1xo1iX8
SEC Exposed Investors to Toxic and Unregulated Crypto Products: Cameron Winklevoss
The financial watchdog of the United States was supposed to provide a comprehensive regulatory framework for the crypto industry. However, it has not yet delivered such a framework, and experts claim that the existing rules are hard to follow. The recent regulatory crackdown against the industry has caused investors to think of moving offshore.
In June 2023, many entities filed for the Bitcoin ETF, including the world’s biggest asset manager BlackRock, Fidelity Investments, etc. This scenario created a lot of buzz, with everyone speculating on if they would get a nod from the Securities and Exchange Commission.
The Winklevoss twins first applied for Bitcoin ETF 10 years ago, but their application was rejected. Furthermore, Grayscale Bitcoin Trust (GBTC) also filed for an ETF but met the same fate. Cameron argued that the absence of an approved Bitcoin ETF for so long has caused U.S. investors to venture into products like GBTC, which trades at a massive discount to the BTC price and charges enormous fees.
The GBTC’s net asset value discount is 30% of the BTC price. Their annual fee is 2%, which is way above the average of 0.40%. This data was from the latest study conducted in July 2022 by Morningstar, a financial services firm.
Cameron Winklevoss also thinks the SEC’s actions have led investors to shift to unlicensed and unregulated offshore platforms, raising a new set of issues. For instance, the now bankrupt crypto exchange FTX which benefited from the problem and collapsed, is the biggest ‘black swan’ event in the crypto industry’s history.
The Gemini co-founder also opined that the regulatory agency should look into the current scenario and try to act as the gatekeeper of economic life rather than overstepping its statutory power to wage war on the industry. The main focus of the agency should be ensuring investor protection.
Will the SEC Approve Bitcoin ETF Applications?
Big players in the traditional finance (TradFi) arena are entering the race for Bitcoin ETF approval, but experts feel that the ride might need to be smoother. The Wall Street Journal reported that the Securities and Exchange Commission had found some inadequacies in the filings for spot Bitcoin ETFs.
The financial watchdog has also informed Nasdaq and Cboe Global Market exchanges regarding the irregularities and lack of clarity in the ETF applications. The agency then asked the exchanges and asset managers to upgrade their applications in order to get a proper response from the regulator.
This refiling would delay the inception of the first Bitcoin ETF because, as per the procedure, the agency must take 15 days to file for a public commentary. Until this process is completed, the filings can be returned until day 7 for refiling. Furthermore, the agency has another 240 days to approve or reject the filing.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
