Former SEC Official Says Current SEC Will Not Approve Bitcoin Spot ETF.

Stark predicted that if a Republican wins the White House in 2024, the SEC will likely change its course and become more receptive to approving a Bitcoin spot ETF and other crypto-friendly regulatory actions.

Former SEC Official Says Current SEC Will Not Approve Bitcoin Spot ETF.

A former official of the U.S. Securities and Exchange Commission (SEC) has expressed his opinion that the current SEC will not approve a bitcoin spot exchange-traded fund (ETF), which is a type of investment product that tracks the price of bitcoin directly. John Reed Stark, the SEC’s Office of Internet Enforcement chief from 1998 to 2017, shared his views on X (formerly Twitter) on August 13, 2023.

Stark wrote that he thinks the current SEC will not approve a bitcoin spot ETF application for “a range of compelling reasons,” citing the arguments made by Better Markets. This independent and non-profit organization advocates for the public interest in the financial markets. According to Better Markets, bitcoin spot ETFs pose significant risks to investors, markets, and the economy, such as market manipulation, fraud, cyberattacks, money laundering, tax evasion, and environmental harm.

Stark also claimed that the crypto regulation issues have become increasingly partisan at the SEC, which he said is an unfortunate change from his tenure at the agency. He suggested that the political affiliation of the SEC chair and commissioners could influence their stance on crypto-related matters. He noted that the current SEC chair Gary Gensler, who President Joe Biden, a Democrat, appointed, has been more aggressive and skeptical in regulating the crypto industry than his predecessors.

Stark predicted that if a Republican wins the White House in 2024, the SEC will likely change its course and become more receptive to approving a Bitcoin spot ETF and other crypto-friendly regulatory actions. He also speculated that Gensler would resign if that happened and that Hester Peirce, a Republican commissioner known as “Crypto Mom” for her pro-crypto views, could become the next SEC chair.

Stark’s comments come amid the growing number of bitcoin spot ETF applications filed with the SEC by various firms, such as Ark Invest, WisdomTree, VanEck, Valkyrie, and SkyBridge. However, none of these applications have been approved, and some have been delayed or rejected by the SEC. The SEC has only approved two bitcoin futures ETFs based on contracts traded on regulated exchanges rather than on actual bitcoins.

The approval of a bitcoin spot many crypto enthusiasts and investors have widely anticipated ETF, as it could provide easier and safer access to bitcoin exposure and boost the demand and price of the cryptocurrency. However, the SEC has been reluctant to approve such a product, citing concerns over investor protection, market integrity, and regulatory oversight. The SEC has also asked for public comments on several issues related to bitcoin spot ETFs, such as market manipulation, valuation, custody, liquidity, arbitrage, and redemption.

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