Key Points:
- Current SEC Leadership Unlikely to Approve Bitcoin Spot ETF
- Better Markets’ Opposition to Spot ETF and Their Shared Concerns
- Stark Speculates on Crypto Regulation Following 2024 Presidential Election
John Reed Stark, a former attorney at the Securities and Exchange Commission (SEC), has expressed his belief that the current leadership within the SEC is unlikely to greenlight a Bitcoin spot exchange-traded fund (ETF) application. Stark, who once headed the SEC’s Office of Internet Enforcement, shared his insights via a series of tweets on Sunday.
Will the SEC Approve Any Of The Recent Bitcoin Spot ETF Applications?
People often ask for my opinion on whether the SEC will approve any of the recent spate of bitcoin spot ETF applications, which is an interesting and important question.
My take is that the current SEC will… pic.twitter.com/lPXebl03Y4
— John Reed Stark (@JohnReedStark) August 13, 2023
Stark provided several compelling reasons to support his viewpoint. He cited a comment letter from Better Markets, a nonprofit organization based in Washington, which urged the SEC to reject a proposed rule change aimed at facilitating the listing of shares from a Bitcoin ETF. This organization, which generally aligns with the SEC’s crypto industry regulation approach, argued against a Bitcoin spot ETF, citing concerns about market manipulation, market concentration, and heavy reliance on specific individuals and entities for maintaining Bitcoin’s network.
Historically, the SEC has consistently denied Bitcoin ETF applications since 2013 due to these aforementioned concerns. However, ETFs linked to Bitcoin futures markets have been allowed to operate. Recently, major players from Wall Street, including BlackRock, the world’s largest asset manager, submitted applications for a spot ETF, though their efforts have yet to yield approval.
Stark also took his analysis further by speculating on the future of SEC crypto regulation, particularly after the upcoming 2024 presidential election. In his assessment, should a Republican candidate secure victory, a GOP-led administration might adopt a more favorable stance toward cryptocurrencies. Stark suggested that this shift could result in greater ease of approval for a spot ETF. He also anticipated a potential slowdown in the SEC’s enforcement actions if the agency’s leadership becomes predominantly Republican.
Known for his outspoken and occasionally critical views on the cryptocurrency industry, Stark has garnered attention on Crypto Twitter by engaging in public debates with various industry participants.
During May, Stark had a heated exchange with Tether’s CTO Paolo Ardoino regarding the stablecoin issuer’s unclear financial statements. He highlighted the absence of governmental regulations. While Stark acknowledged some of Ardoino’s points, he labeled crypto beneficiaries in developed nations as “grifters” and “criminals.”
Just a month after, Reed cast doubt on the feasibility of blockchain technology supporting cryptocurrencies, initiating a discussion with crypto advocate Mark Cuban, who defended the sector.
