John Reed Stark, a former official of the United States Securities and Exchange Commission (SEC), has heightened his skepticism over the chances of a Bitcoin exchange-traded fund (ETF) gaining approval.
“The Chances for SEC Approval of a Bitcoin Spot ETF Are Slim and None (And Slim Just Left Town),” he states.
Reed Cites Lack of Regulations and Oversight
On Aug. 19, Stark made a post on X (formerly known as Twitter) where he states that the cryptoverse is a “cesspool of grift, fraud and chicanery.”
In particular, he refers to an Aug. 2 report that claims widespread bots on the X platform helped pump the price of various cryptos, including coins traded by Alameda Research, the sister company of FTX, just prior to its collapse.
The research claims that mere mentions of altcoins by Tesla and SpaceX CEO Elon Musk, appears to have caused prices to spike by as much as 50% within one day.
Stark uses this research to support his argument that there is not enough transparency in crypto right now.
“There is no bonafide method to value mathematical computational blather. No fundamentals, no balance sheets, no cash flow, no product, no management” Reed claims, citing the lack of regulations a reason for his doubts on the SEC approving a Bitcoin ETF:
“Second, there is no crypto-related regulatory oversight, transparency, consumer protections, insurance, licensure, net capital requirements or any other effective customer protections.”
Stark has previously pointed out the possibility of the SEC altering its views on Bitcoin ETFs following the US Election Day, on Nov. 5 2024.
Pause in Bitcoin ETF Progress As Ethereum Futures Nears Approval
The SEC is yet to give a decision on the approval of Bitcoin ETFs, with several firms waiting in anticipation.
Among these firms is BlackRock, the world’s largest asset manager, also waiting for a decision on its application.
Despite BlackRock having a history of successfully launching ETFs, and is widely perceived as having the greatest likelihood of obtaining approval, the SEC has yet to provide a definitive response regarding the outcome.
Cathie Wood, CEO of ARK Invest, another investment firm awaiting a determination on its Bitcoin ETF application, believes the SEC will likely approve multiple ETF applications simultaneously.
“Because most of these essentially will be the same, it will come down to marketing, communicating, the message”, Wood stated.
However, the approval for ETFs linked to Ethereum, the second largest crypto by market cap, might arrive sooner.
On Aug. 17, a report citing several familiar people with knowledge, states that the SEC is close to green lighting the first Ethereum Futures ETFs.
Although the SEC has not yet provided any comments, the sources say that the regulator “isn’t likely to block the products.” They also hint that the SEC may approval several firms for the launch by October.
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