Current feedback from former SEC Legal professional John Reed Stark have additional dampened optimism in regards to the regulator approving any of the pending Spot Bitcoin ETF purposes.

Spot Bitcoin ETF Approval Trying Extra Unlikely

The USA Securities and Alternate Commission (SEC) has repeatedly denied purposes for a Spot Bitcoin ETF, and Stark has urged that this pattern isn’t going to vary anytime quickly because the SEC will doubtless deny all of the pending purposes resulting from a number of “compelling causes.”

Whereas aligning his opinion with that of Higher Markets, Stark acknowledged that the arguments laid ahead within the nonprofit’s letters to the SEC “brilliantly” highlighted why the SEC wouldn’t approve any of those purposes.

Higher Markets had, in two separate letters (right here and right here) dated August 8, laid out arguments why the SEC ought to reject the proposed rule modifications by the Cboe BZX Alternate and the Nasdaq Inventory Market “to listing and commerce shares in Spot bitcoin-based exchange-traded merchandise (ETP).” 

In line with them, the Spot Bitcoin market is thought to indicate inflated trading volumes resulting from illicit practices like market manipulation and wash trading. They argue that the markets are extremely concentrated and Bitcoin’s community is maintained by a “choose group of people and entities.” All this makes any proposed Spot Bitcoin ETP vulnerable to manipulation by “dangerous actors” and places buyers and the general public curiosity in danger. 

Of their purposes, these exchanges acknowledged that CME Bitcoin futures, a regulated market of great measurement, may present the required information and insights referring to any fraud and manipulation within the Spot Bitcoin ETF market. Moreover, that they had entered right into a surveillance-sharing settlement with Coinbase as an additional measure to stop fraud and market manipulation.

Nonetheless, Higher Market has labeled these measures as “wholly insufficient.” They argue that the CME Bitcoin futures market isn’t a “regulated market of great measurement” and the surveillance-sharing settlement with Coinbase is inadequate to stop market manipulation.

BTC stays weak as market awaits SEC resolution | Supply: BTCUSD on Tradingview.com

Is Crypto Regulation Now Political?

Stark believes that the “crypto-regulatory tides may shift exponentially” as soon as the US 2024 elections happen. He famous the political divide concerning crypto and the way this has additionally performed out within the SEC’s clampdown on the crypto trade. 

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The SEC has been recognized to come back on onerous at a number of crypto corporations, together with two of the world’s largest crypto exchanges, Binance and Coinbase, accusing them of securities violations. Nonetheless, Stark predicts that the SEC will abandon this crypto-enforcement effort and focus extra on principally fraud instances ought to a Republican get elected as President subsequent 12 months.

Though the elections are slated for November 2024 (lengthy after the SEC might need selected the pending Spot Bitcoin ETF purposes), Stark has forecasted {that a} GOP-led administration may convey in regards to the approval of a Spot Bitcoin ETF. 

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