Concerns Over US Government Seizing BTC in Valkyrie’s Bitcoin ETF Application
Bitcoin advocates have raised concerns about a clause in Valkyrie’s spot Bitcoin exchange-traded fund (ETF) application that could allow the US government to seize the underlying BTC. The clause grants regulators the power to liquidate, seize, or restrict access to BTC. This is particularly worrisome considering the political connections of Bitcoin ETF issuers like BlackRock. Valkyrie is one of thirteen companies seeking approval to launch a spot Bitcoin ETF in the US. If approved, the company will issue shares backed by BTC held at custodians.
Government Seizures and the Vulnerability of Crypto Assets
While certain jurisdictions have implemented laws to safeguard crypto assets, there are still regions where seizure is a possibility. Recent cases involve the seizure of wallets linked to criminal activity. However, governments have the potential to extend seizure mandates without discrimination. Examples such as the Gold Reserve Act of 1934 and the Trading With the Enemy Act of 1917 demonstrate the government’s discretion in confiscating assets for various reasons. Max Keiser also argues that past instances of government scrutiny pose a threat to BTC in ETFs.
Potential Concerns with BlackRock’s Bitcoin ETF Application
The relationship between some ETF applicants and the government is another cause for concern. BlackRock applied to launch its ETF in June, leading many to believe there may be a positive shift in Washington’s stance on crypto. However, a report from 2019 reveals that BlackRock and its CEO Larry Fink pushed for regulatory relaxation after the 2008 financial crisis for their own benefit. This raises questions about whether a BlackRock Bitcoin ETF would primarily serve their interests rather than benefiting the wider crypto industry.
Hot Take: Potential Risks of a Bitcoin ETF in the Hands of Washington
The inclusion of a clause allowing the US government to seize BTC in Valkyrie’s Bitcoin ETF application has sparked concerns among Bitcoin advocates. This raises questions about the vulnerability of crypto assets and the potential for governments to extend seizure mandates. Additionally, the political connections of Bitcoin ETF issuers like BlackRock have raised concerns about the motivations behind their applications. The possibility that a BlackRock Bitcoin ETF may prioritize their own interests over the crypto industry at large adds another layer of risk. It remains to be seen how these concerns will be addressed as the debate around Bitcoin ETFs continues.
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