Spot Bitcoin ETFs, according to a former SEC official, will result in a “massive Wall Street fee-sucking investor scam.”
Spot Bitcoin exchange-traded funds (ETFs), according to the former chief of internet enforcement at the United States Securities and Exchange Commission (SEC), would “create another massive Wall Street fee-sucking investor scam.” Furthermore, he emphasized that this would most certainly be the most centralized cryptocurrency vehicle possible.
In a post on social networking site X on Monday, former SEC official John Reed Stark expressed a number of concerns regarding spot Bitcoin exchange-traded funds (ETFs). Stark is presently the chairman of John Reed Stark Consulting, a cybersecurity business. For 11 years, he developed and led the SEC’s Office of Internet Enforcement. He also worked as an SEC enforcement lawyer for 15 years.
Stark expressed his doubts regarding spot Bitcoin ETFs, writing, “As to whether approving a spot Bitcoin ETF would be a good thing, my view is that it would not be.” He cautioned that the idea of a spot Bitcoin ETF is still absurd, not only because it would create another gigantic Wall Street fee-sucking investor swindle, but also because a spot Bitcoin ETF is possibly the most ‘centralized’ sort of cryptocurrency possible.
The SEC is now assessing 13 Bitcoin ETF applications on the spot. According to reports, the regulator met with several of the applicants last week and gave them till the end of the week to make modified paperwork for their spot Bitcoin ETF proposals. Furthermore, the regulator has requested that they employ the creation-in-cash approach rather than the creation-in-kind method. The world’s largest asset management, BlackRock, initially advocated for the in-kind concept and even offered a modified in-kind strategy. The corporation, however, was unable to persuade the SEC and has now embraced the cash technique, as disclosed in its most recent filing.
In his piece, Stark also opposed the adoption of the creation-in-cash technique, claiming that it would “simply add another layer of fees and complexity for investors.” He also contended that spot Bitcoin ETFs would “do nothing to address the underlying structural problems with Bitcoin, such as its volatility and lack of regulation.”
The SEC is still reviewing Bitcoin ETF applications, according to Stark. The regulator has yet to authorize a spot Bitcoin ETF, but this is widely expected to happen soon.