Spot Bitcoin ETFs: Former SEC Official’s Warning
A former official from the U.S. Securities and Exchange Commission (SEC), John Reed Stark, has expressed concerns about spot bitcoin exchange-traded funds (ETFs). In a post on social media platform X, Stark, who is now the president of a cybersecurity firm, warned that these ETFs could create a new scam for Wall Street investors and be the most centralized form of cryptocurrency. The SEC is currently reviewing 13 applications for spot bitcoin ETFs and has recently asked applicants to use the cash-creation method instead of the in-kind method. Stark believes that the approval of a bitcoin ETF could become a significant legacy for SEC Chair Gary Gensler.
Stark’s Skepticism on Spot Bitcoin ETFs
In his post, Stark mentioned that he does not consider the approval of a spot bitcoin ETF to be a good thing. He argued that these ETFs would not only lead to another investor scam in Wall Street but would also be highly centralized. Stark, who has 20 years of experience in the field, highlighted the fact that the SEC has been meeting with spot bitcoin ETF issuers and discussing the cash creation method. Based on these discussions, he believes that it is likely that the SEC will approve some form of a bitcoin spot ETF, which he finds concerning.
SEC’s Review of Spot Bitcoin ETF Applications
The SEC is currently reviewing 13 applications for spot bitcoin ETFs. Last week, the regulator met with the applicants and requested them to file amendments to their filings by the end of the week. Additionally, the SEC asked them to use the cash-creation method instead of the in-kind creation method. Blackrock, the world’s largest asset manager, initially pushed for the in-kind method but was unsuccessful in convincing the SEC. As a result, Blackrock has now adopted the cash method for its latest filing.
Spot Bitcoin ETFs and SEC Chair Gary Gensler
Stark expressed his surprise at the possibility that the approval of a bitcoin spot ETF could become a significant talking point for SEC Chair Gary Gensler’s legacy. He finds it unusual that this would be a priority in the cryptocurrency space. However, based on the meetings between SEC officials and spot bitcoin ETF issuers, as well as the discussions on the cash creation method, Stark believes that the approval of a bitcoin spot ETF is likely.
Hot Take: Spot Bitcoin ETF Warning
Spot bitcoin exchange-traded funds (ETFs) have received a warning from a former SEC official who cautions against their approval. According to John Reed Stark, spot bitcoin ETFs would create another investor scam on Wall Street and introduce a highly centralized form of cryptocurrency. The SEC’s review of 13 applications for spot bitcoin ETFs, along with discussions on the cash creation method, suggests that approval is probable. Stark expressed surprise that this could be a significant part of SEC Chair Gary Gensler’s legacy. As the debate on spot bitcoin ETFs continues, it remains to be seen how regulators will respond to these concerns.
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