The US Securities and Exchange Commission (SEC) makes three serious errors in the argumentation it uses when rejecting applications for Bitcoin ETF. This opinion was expressed by CoinRoutes co-founder and CEO David Weisberg in an article for CoinDesk.
On October 9, the SEC rejected the Bitwise offer andNYSE Arca on the launch of Bitcoin-based ETFs. The regulator stated that the product does not comply with legal requirements to prevent market manipulation and other illegal activities. This was another SEC rejection of applications for such products.
Weisberg pointed out three main errors in the argumentation of the Commission.
Firstly, there are already many bitcoin exchanges,meeting the regulatory standards of large banks. There is no proven “fake and inexpedient economic activity” on the trading floors, he noted.
According to him, these exchanges provide sufficient liquidity to determine the price of an asset during trading.
SecondlyCompared to gold, silver and other precious metals that are already approved by the SEC for ETFs, bitcoin has a much higher level of transparency, Weissberg is sure.
He noted that the spot market of precious metals hascontractual nature. This demonstrates well the high spread between supply and demand prices - 4%. For comparison, in a number of bitcoin spot markets, this figure is only 1%, Weisberg pointed out.
Thirdly, in his opinion, it is incorrect to blame the marketcryptocurrencies in possible manipulations when they are inherent in previously approved SEC assets. He referred to the RICO case - in September, a group of traders in precious metals were charged with many years of manipulating the futures market.
In general, Weisberg believes that the regulator is biased towards the leading cryptocurrency, setting higher requirements than other assets for ETFs.
Recall that Bitwise and NYSE Arca after the SEC refused on the application for Bitcoin ETF announced their intention to submit a new one. However, the SEC decided to reconsider the companies offer.