Crippling innovation or necessary regulation?

Cryptocurrencies and all their derivatives cause a lot of ink and saliva to flow. After many protests for a regulation of these assets, the SEC still seems unconvinced. The comments of a commissioner of the commission caused widespread astonishment at a conference on exchange-traded cash-traded funds (ETF spot).

Hester Peirce wants the SEC to accept spot ETFs

The crypto market has been going through some difficult events lately. The course of almost all cryptos is in the red. While negotiations are underway, investors do not see the current situation in a good light. However, the optimism of some market participants may offer renewed hope. There could also be other good news in this sector that is going through its darkest period.

A few days ago, one of the commissioners protested against the Securities and Exchange Commission (SEC)’s stance on spot ETFs. For this one, the agency is adopting some not very orthodox practices regarding crypto-exchange-traded funds. Hester M. Peirce spoke at a conference on the Crypto Ecosystem Regulatory Transparency Project on June 14.

For her, the SEC should stop denying the existence of spot ETFs. The expansion of crypto assets is the subject of much controversy. Financial institutions see them as a threat to the current system. As a result, their value remains mixed. The lack of regulation on cryptos is also holding back the adoption of the crypto spot exchange. More and more people are wondering when the SEC will finally approve a Bitcoin (BTC) ETP.

For those who don’t know what it is, crypto spot ETFs are new forms of assets. They allow traders to invest in a cryptocurrency without actually buying the asset. The main advantage of this method is that investors can access certain cryptos without using a wallet or registering on a platform. Despite all the talk, the SEC stands by its decision. She tried to explain herself, but her explanation fell through. First for Grayscale, then for Commissioner Peirce.

Hester Peirce

The SEC’s reasons do not pass!

The existence of ETFs based on futures contracts was first approved by the SEC in 1992. However, the creation of so-called “spot” ETFs does not pass before this regulatory body. Crypto assets carry many risks and one simply cannot accept this new method without studying its contours. For the US commission, spot ETFs have many shortcomings in terms of transparency, liquidity and relevance.

As a result, they can quickly turn into fraudulent practices. Since February, investors have been alert and waiting for a decision that will not come. Faced with this situation, Hester Peirce denounces the SEC’s continued refusal to approve a spot Bitcoin ETF. To back up her words, she takes the example of the countries they have taken over. Except for investors of great importance, no incidents have yet been identified. In Canada, investors already have access to this service to place their investments.

In addition, the number one Bitcoin ETF reached C$1 billion in assets under management just a year after its launch. The neighboring country has therefore been using this method since 2020. As a result, it doesn’t understand why the SEC is taking so long to approve the United States. It should be noted that these assets are very popular in Europe where the cumulative value of the assets is about $7 billion.

The SEC is still reluctant to approve spot ETFs. While investors see it as a good plan to maximize profits, the regulator sees it as a problem. In fact, the committee believes they will cause more incidents than necessary. This opinion is not unanimous as one of the commissioners is against it.

Source: Finbold

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Eddy Senga

The world is changing and adaptation is the best weapon for survival in this undulating universe. As a crypto community manager at the grassroots, I am interested in everything directly or indirectly related to the blockchain and its derivatives. To share my experience and make known a field that fascinates me, there is nothing better than writing informative and relaxed articles at the same time.

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