SEC Won’t Approve a Bitcoin ETF: Insights from John Reed Stark
Will the U.S. Securities and Exchange Commission give the nod to any of the recent spot bitcoin ETF applications? Former SEC official and well-known crypto skeptic John Reed Stark has shared some surprising insights.
John Reed Stark believes the present-day SEC might not approve spot bitcoin-ETFs. He draws attention to an analysis from Better Markets, a nonprofit organization established post the 2008 financial crisis with a mission to champion public interests in the financial sector. They have publicly stated several reasons why green-lighting bitcoin ETFs would be an inexcusable blunder by the Commission.
The spot bitcoin markets (1) have a history of artificially inflated trading volumes due to rampant manipulation and wash trading; (2) are highly concentrated; and (3) rely on a select group of individuals and entities to maintain bitcoin’s network,Better Markets pointed out.
Analysts suggest that these characteristics render spot BTC-ETFs particularly susceptible to fraudulent schemes, jeopardizing potential investors. Stark stands in agreement with Better Markets, emphasizing the peril of bitcoin-based exchange products.
Interestingly, Stark, having held a pivotal position at the SEC, indicates that there's a perceptible bias in the current crypto regulation. This raises eyebrows: shouldn't regulations be impartial?
President Donald Trump, Secretary Hillary Clinton, and Congresswoman Maxine Waters all shared the same view about crypto i.e. that crypto was a dangerous and horrific plague,Stark reminisces.
Stark underscores that the rigorous crypto scrutiny by the SEC gained momentum under Chairman Jay Clayton, known for his Republican affiliations. This development hints at a cross-party agreement concerning regulatory approaches.
Chair Clayton served as a fierce and relentless crypto critic and boasts a hefty multi-year track record of anti-crypto speeches and Congressional testimony,Stark observes.
The political landscape, however, is evidently changing. Stark envisions that post-election, particularly if there's a shift in the nation's leadership, the approach to crypto regulation might experience a sea change. He foresees that under a Republican president, the SEC could demonstrate a softer and more favorable stance on matters that currently meet sharp disapproval from the Commission, including the bitcoin ETFs.
Hence, should a Republican get elected President, Chair Gensler would likely resign and the senior Republican appointed SEC Commissioner (in this case famed 'crypto-mom' HesterPeirce) would possibly become acting Chair,Stark speculates.
In this case, most of the current Commission's regulatory initiatives concerning the crypto industry would sharply come to a halt, believes the former SEC division chief. Thanks for the forecast, Mr. Stark! As the saying goes, from your lips to God's ears.
