Crypto billionaire and Gemini co-founder Cameron Winklevoss has sued the Securities and Exchange Commission (SEC) over its refusal to license spot bitcoin exchange-traded funds.
In a tweet on Saturday, Winklevoss said the refusal to approve such products was “a disaster for US investors.”
What are crypto ETFs?
Exchange traded funds or ETFs are investment products that are listed on stock exchanges. They allow investors to buy shares in a fund that typically tracks a specific index or asset class.
Crypto ETFs offer people the opportunity to invest in crypto without having to hold virtual assets themselves. Instead, they can delegate custody and investment strategy to professional fund managers.
The concept has recently been hotly debated after several large institutional investment firms filed applications for Bitcoin ETFs with the SEC. Even the world’s largest investment company, Blackrock, has jumped on the latest TradFi trend.
But even with the weight of financial giants like Blackrock behind it, the SEC has rejected recent Bitcoin ETF filings.
The SEC objected to the fact that it didn’t identify the spot bitcoin exchange with which the asset managers signed a “monitor-sharing agreement,” calling the filing “inadequate.”
However, Fidelity, VanEck, Invesco/Galaxy, and Ark Invest all resubmitted their applications in the past week. In response to the SEC’s complaints, they named Coinbase as a partner exchange in the updated filings.
“A disaster for US investors” – Cameron Winklevoss
With the topic of crypto ETFs trending given the recent news, Cameron Winklevoss took the opportunity to contribute.
In his Saturday tweet, Winklevoss pointed out that Gemini first filed a Bitcoin ETF application with the SEC a full decade ago. He called the SEC’s refusal to approve these products for so long “an utter disaster for US investors.”
Additionally, he called the SEC “a failed regulator” and argued that its policies have moved spot bitcoin activity overseas to unregulated venues.
He added that it has also pushed investors into “toxic products” like the Grayscale Bitcoin Trust (GBTC). Compared to alternatives like Bitcoin ETFs, GBTC doesn’t offer investors good value for money.
Huge demand for crypto ETFs
The US has so far banned the listing of spot cryptocurrency funds on exchanges. However, the first bitcoin futures ETF was approved in 2021. ProShares Bitcoin Strategy ETF, listed on the New York Stock Exchange, has seen strong demand. In fact, the fund raised more than $1 billion in just the first two trading days.
And Cameron Winklevoss may be right when he claims that the SEC’s policies are driving capital abroad. With limited options for accessing crypto investment opportunities on US exchanges, other venues have launched exchange-traded products that track the price of BTC and other crypto assets.
Regulators in countries like Canada, Germany, Sweden, and Brazil have all given the green light to Bitcoin ETFs. Meanwhile, in Hong Kong, the first crypto ETFs, CSOP Bitcoin Futures ETF and CSOP Ether Futures ETF, were listed on HKEX back in December.
And in the past few days, Hong Kong’s crypto ETFs received another major boost. As reported by BeinInCrypto, HSBC is giving people access to the two CSOP funds on its investment platform. The bank has also admitted the Samsung Bitcoin Futures Active ETF for trading.
Disclaimer
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