SEC Commissioner Crenshaw Dissents From Spot Bitcoin ETF Approval

SEC Commissioner Caroline A. Crenshaw voices her dissent towards the fee’s approval of spot bitcoin ETFs, highlighting the dangers of market manipulation, the focus of bitcoin possession, and the inadequacy of present regulatory measures in safeguarding investor pursuits.

SEC Commissioner Critiques Spot Bitcoin ETF Approval

Following the SEC’s spot bitcoin ETF mass approvals, Commissioner Caroline A. Crenshaw has launched a letter expressing her dissent, elevating critical considerations about investor safety and market integrity.

Crenshaw’s dissent follows the SEC’s choice to approve rule adjustments permitting the itemizing and buying and selling of bitcoin-based Exchange Traded Products (ETPs) on nationwide securities exchanges. In her assertion, she argues that these actions are inconsistent with the SEC’s mandate to guard buyers and the general public curiosity.

The Commissioner’s main concern revolves across the underlying international spot markets for bitcoin, which she says are marred by fraud and manipulation. She factors to examples such because the alleged bitcoin worth manipulation by the previous CEO of FTX to maintain its worth below $20,000 for his profit. In considerably of a head scratcher, Crenshaw additionally cites the latest hacking of an SEC social media account and subsequent false announcement of spot bitcoin ETFs, which led to volatile bitcoin prices, as indicative of potential market manipulation. After the false announcement had been revealed as a hack, some members of the crypto neighborhood had even joked that the SEC may use it as proof to withhold approval.

“on second thoughts, bitcoin spot market is too easily manipulated (by us), so we’re denying the ETF”

— nic carter (@nic__carter) January 9, 2024

According to Crenshaw, focus of bitcoin possession can be a priority:

Concentration of possession amongst spot bitcoin holders additionally leaves bitcoin buyers (and now spot bitcoin ETP buyers) susceptible to the whims and buying and selling practices of some. Analysis reveals that mining and holdings of bitcoin are extremely concentrated.

She argues that the spot bitcoin markets’ susceptibility to manipulation and the shortage of sufficient oversight make it tough to say that the accredited rule adjustments are designed to guard buyers successfully.

In her critique of the latest Grayscale vs. SEC case, Crenshaw notes that the correlation evaluation used to justify the approval of spot bitcoin ETPs is insufficient. She attracts consideration to the numerous variations in investor safety between futures and spot bitcoin ETPs, likening the latter to an unregulated, international free-for-all, with little recourse for buyers in circumstances of fraud or manipulation.

She criticizes the creation of a brand new regulatory commonplace with out clear tips and questions the reliability of the information used within the SEC’s correlation evaluation. In a broader critique of the cryptocurrency ecosystem, Crenshaw questions the tendency to recreate the present monetary system with much less regulation and extra danger, diverging from the unique beliefs of Bitcoin as a peer-to-peer, censorship-resistant digital forex. She fears that linking Bitcoin too carefully to the normal monetary system could not serve the pursuits of buyers however relatively inflate the costs of those funding merchandise.

Are you receptive to any of Commissioner Crenshaw’s considerations? Share your ideas and opinions about this topic within the feedback part under.