Former SEC Attorney Claims SEC Will Not Greenlight A Bitcoin ETF

Former SEC Attorney Claims SEC Will Not Greenlight A Bitcoin ETF

John Reed Stark, a former SEC attorney, said that it is unlikely that the Securities and Exchange Commission (SEC) would give approval for a Bitcoin ETF.

The US securities regulator has been opposed to ETFs in Bitcoin spot markets even though some high-profile Wall Street firms have filed an application for it.

The attorney

On Sunday, the former head of the Office of Internet Enforcement at SEC, Stark said that he believed the SEC would not relent for a number of compelling reasons.

He supported his argument by referring to a comment letter that Better Markets, which is a nonprofit based in Washington, had sent to the SEC.

The said letter had asked the securities regulator to turn down a proposed change in rules that would make listing shares from a Bitcoin ETF easier.

The approach taken by the SEC for regulating the crypto industry has been supported by Better Markets and it echoed the same stance as the regulator against a spot Bitcoin ETF.

They argued that Bitcoin markets are highly concentrated, vulnerable to market manipulation, and overly dependent on a group of entities and individuals for maintaining the token’s network.

Bitcoin ETF

These reasons have been used by the SEC for turning down Bitcoin ETF applications since 2013, but it has given the greenlight to Bitcoin ETFs that are operating in the Bitcoin futures markets.

The largest asset manager in the world, BlackRock, had filed an application for a Bitcoin ETF back in June and other major Wall Street players had also joined in soon after.

Stark also talked about the future of crypto regulation by the SEC in his Twitter thread that would be seen after the presidential election in 2024.

According to Stark, a Republican candidate victory would result in a friendlier stance from the administration towards crypto, which means getting approval for a spot Bitcoin ETF would be easier.

He also added that a number of enforcement actions that the SEC is currently pursuing would come to a halt in the case of a Republican majority taking control.

Other details

Crypto Twitter has often gotten riled up due to Stark’s harsh criticism of the crypto industry and he has also had public arguments with a lot of players within the space.

Back in May, Stark had had arguments with Paolo Ardoino, the chief technology officer at Tether, when he had criticized the stablecoin issuer about what he deemed were opaque financial statements.

Stark also criticized the government for the lack of regulations. Even though he did accept some of the defenses put forward by Ardoino, he said that crypto could only benefit ‘criminals’ and ‘grifters’ in the developed world.

In June, Reed had also raised questions about blockchain technology’s viability, as it powers cryptocurrencies.

This resulted in a debate with Mark Cuban, a renowned crypto investor, who ended up defending the crypto industry.