Crypto Spot ETF: Chilling 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. The remarks of a commissioner of the commission created general surprise during a conference on funds traded in cash on the stock exchange (ETF spot).

Hester Peirce wants the SEC to accept spot ETFs

The crypto market has been undergoing some troubled events lately. The course of almost all cryptos is in red. Although negotiations are continuing, investors do not see the current situation in a good light. However, the optimism of some market participants may provide renewed hope. Other good news could also arrive in this sector which is going through its darkest period.

A few days ago, one of the commissioners protested against the attitude of the Securities and Exchange Commission (SEC) regarding spot ETFs. For this one, the agency adopts some not very orthodox practices regarding crypto exchange-traded funds. 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 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 brake on the adoption of the spot exchange of crypto spots. 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 crypto without actually buying the asset. The great 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. She tried to explain herself but her explanations did 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 pass for 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 in terms of transparency, liquidity and relevance.

As a result, they can quickly turn into fraudulent practices. Since February, investors have been on alert and waiting for a decision that is not forthcoming. Faced with this situation, Hester Peirce castigates the SEC’s persistent refusal to approve a spot Bitcoin ETF. To support her words, she takes the example of the 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.

Additionally, the first spot Bitcoin ETF hit C$1 billion in assets under management just one year after its launch. Thus, the neighboring country has been using this method since 2020. As a result, it does not understand why the SEC is taking so long to give its approval for 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 dollars.

The SEC is still reluctant to approve spot ETFs. While investors see it as a good plan to maximize gains, the regulator sees it as a problem. Indeed, the commission believes that they will cause more incidents than are necessary. This opinion is not unanimous since 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 a crypto community manager at the base, I am interested in everything directly or indirectly related to the blockchain and its derivatives. In order to share my experience and make known a field that fascinates me, nothing better than writing informative and relaxed articles at the same time.

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Crypto Spot ETF: Chilling Innovation or Necessary Regulation?


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