On August 13, former Chief of the SEC’s Office of Internet Enforcement, John Reed Stark, said that the regulator is unlikely to approve spot Bitcoin exchange-traded funds (ETFs). However, he noted that a possible Republican presidential victory in the upcoming election could lead to a change in the SEC's cryptocurrency policy. You can learn more about what a spot Bitcoin ETF is in our article.
What's wrong with Bitcoin
John Reed Stark refers to recent letters received by the SEC from Better Markets, a non-profit organization advocating for transparency and oversight in financial markets. Better Markets has actively discouraged the SEC from approving spot Bitcoin ETFs, citing investor risks as a prime concern. Among other reasons are:
🤞 Bitcoin’s history of price and trading volume manipulation;
💰 Concentrated ownership patterns prevalent in the Bitcoin market;
⛏️ Bitcoin’s dependance on a narrow group of individuals to keep the blockchain running (miners).
While John Reed Stark finds these letters convincing, he acknowledges that things can change.
What’ll save cryptocurrencies
According to John Reed Stark, a lot could change if a Republican president wins the next presidential election. Over recent years, cryptocurrency regulation, as well as the SEC’s role, have become heavily politicized. Stark further highlighted the presidential appointment of the SEC’s leader, underscoring that a Republican win might lead to Gary Gensler to step down.
In such a scenario, we can expect that the SEC will adopt a more focused approach on tackling direct fraud cases and become more friendly to soft regulation of cryptocurrencies and the potential approval of spot Bitcoin ETFs.
Cryptocurrency matters have frequently been mentioned among candidates for the U.S. presidency. Politicians make loud statements about Bitcoin, CBDCs, and other related topics. Check out our article about crypto enthusiasts’ battle for the US presidency.
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