Spot Bitcoin (BTC) ETF Applications to be Rejected by SEC, Predicts BitGo CEO
Mike Belshe, the CEO of BitGo, believes that the United States SEC will issue rejections for another round of spot market Bitcoin (BTC) exchange-traded fund (ETF) applications. In a recent interview on Bloomberg Television, Belshe stated that the SEC will likely reject ETF bids due to the dual nature of modern cryptocurrency corporations, including corporations like Coinbase that serve as both cryptocurrency exchanges and custodians.
Belshe expressed optimism about the ETF but predicted another round of rejections before any positive news is shared. He highlighted the need to separate custody from exchanges, citing Gary Gensler’s emphasis on market structure. Belshe likewise suggested that the approval of such applications would be contingent on separating exchanges and custody services.
“ Many of these applications are with Coinbase custody. Coinbase, while I’m not attempting to emphasize that they’re an FTX by any means, they are taking on likewise kind of that same playbook. Along with being an exchange and a custodian, they recently got approval from an FCM (futures commission merchant), of course, they got a broker-dealer. What this implies [is] there are many of dangers in that entity that aren’t fully understood, and I think that the SEC could quite likely come back and say ‘Nope, you got to separate out these things fully before we’re going to move forward.’”
The Future of Spot Bitcoin (BTC) ETFs: Separation of Services is Key
Given the predicted rejections, Belshe anticipates that the SEC will request a complete separation of services before considering any ETF applications. Although while noting the excitement surrounding ETFs and the increasing proximity to approval, Belshe highlighted the need to heed Gensler’s preferences regarding market structure.
According to BitGo CEO Mike Belshe, the separation of services between exchanges and custody is critical, and until this structure is addressed, another round of spot market Bitcoin (BTC) ETF rejections from the SEC is expected.
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