- The SEC has yet to approve a spot crypto exchange-traded fund
- The regulator’s job is to protect investors
- Timo Lehes says regulator’s decision to reject VanEck’s ETF app shows crypto market still not ready
The United States Securities and Exchange Commission (SEC) has again rejected a request to have a Bitcoin spot exchange-traded fund (ETF).
The disapproval, announced on Friday, shows the market is “”not readyAccording to Timo Lehes, co-founder of Swarm Markets regulated by BaFin.
VanEck’s cash BTC fund would have been physically settled and investors would have directly followed the price of Bitcoin. The SEC ruled that the ETF’s proposal did not meet all the requirements, highlighting problems with the potential to “fraudulent and manipulative acts and practices. ”
“In essence, the regulator does not seem willing to expose consumers to the market as it is still uncomfortable with how it can be played by powerful players.“Lehes said in a statement shared with CoinJournal.
Despite the downside, Lehes believes the SEC is well within its mandate as it seeks to fulfill its “primary function” of protecting investors.
SEC thinks the crypto market is not ready
Last month, the SEC approved the first ETFs based on Bitcoin futures in the United States, a contingency that saw market glee send Bitcoin prices to all-time highs in early November.
Approval of a spot crypto ETF would take the space to the next level. But does the US securities regulator think the market is ripe for the jump?
According to Lehes, that’s a “no”.
“The combination of crypto assets and spot ETFs brings together two of the biggest innovations in finance over the past 30 years. But it is clear that the regulator thinks the market is not ready for this, “he noted.
This outlook, he explains, can only change if the crypto industry seeks to work with the regulator. The SEC will continue to do its job of providing investor protection and thereby placing the responsibility of being ready for a spot ETF directly on the crypto industry.
“SEC Chairman Gary Gensler has made it clear that he favors futures over spot ETFs when it comes to bitcoin and crypto more broadly. Working within the framework he defines and listening to the concerns of people like Gensler is ultimately the most likely path to a prosperous and sustainable market., he concluded.
The market will continue to wait for a BTC ETF in the US market and investors looking for exposure can do so through one of the recently approved Bitcoin ProShares (BITO) and Valkyrie Bitcoin Strategy ETF (BTF) ETFs.