Mike Belshe, CEO of BitGo, predicts additional challenges for the approval of spot Bitcoin ETFs in the USA. His insights, shared throughout Bloomberg interview, spotlight unresolved market construction points as a major barrier. Regardless of some optimism within the crypto market in regards to the eventual approval of those ETFs, Belshe’s outlook suggests a unique situation. The U.S. Securities and Trade Fee (SEC) continues to carefully scrutinize these functions, emphasizing investor safety from market manipulation.
Bitcoin ETFs Face Intensified SEC Scrutiny
The collapse of FTX and the following authorized troubles of its founder, Sam Bankman-Fried, have forged an extended shadow over the crypto trade. Bankman-Fried’s try to affect U.S. crypto rules didn’t yield the specified outcomes.
Now, with a possible 115-year sentence looming over him for fraud and misappropriation costs, the trade faces elevated skepticism. This skepticism extends to corporations like Coinbase Custody, utilized by many as a custodial answer for his or her ETF functions. Belshe notes parallels between FTX’s methods and people employed by Coinbase, albeit clarifying that Coinbase shouldn’t be being likened to FTX’s malpractices.
Considerably, main monetary establishments aren’t proof against this scrutiny. BlackRock and Franklin Templeton, amongst others, have chosen Coinbase Custody for his or her cryptocurrency storage. This alternative highlights a pattern within the trade the place the traces between exchanges and custodians are more and more blurred. The SEC’s concern facilities across the potential dangers posed by this lack of separation, which could result in the rejection of a number of ETF functions.
SEC Postpones Choice on Hashdex BTC ETF
The SEC’s unwavering vigilance is obvious in its latest actions. As an example, the choice on Hashdex’s application for a spot Bitcoin ETF within the U.S. was postponed in mid-November 2023. This transfer underscores the regulator’s dedication to making sure strong investor safety measures are in place. Consequently, the trade is left to navigate these regulatory challenges, which present no indicators of abating.