Crypto billionaire and Gemini co-founder Cameron Winklevoss has called out the United States Securities and Exchange Commission (SEC) over its refusal to license spot bitcoin Exchange Traded Funds.
In a tweet on Saturday, Winklevoss said the refusal to allow such products has been “ a disaster for US investors.”
What Are Crypto ETFs?
Exchange Traded Funds, or ETFs are investment products that are listed on stock exchanges. They allow investors to buy shares in a fund, which typically tracks a specific index or asset class.
Crypto ETFs offer a way for people to invest in crypto without having to hold any virtual assets themselves. Instead, they can delegate custody and investment strategy to professional fund managers.
The concept has been hotly debated recently after several major institutional investment firms filed applications for bitcoin ETFs with the SEC. Even the world’s largest investment company Blackrock has jumped on the latest TradFi craze.
However, even with the weight of financial giants like Blackrock behind them, the SEC shot down the recent submissions for bitcoin ETFs.
Taking issue with the fact that they failed to name the spot Bitcoin exchange with which the asset managers signed a “surveillance-sharing agreement,” the SEC called the filings “inadequate.”
However, Fidelity, VanEck, Invesco/Galaxy, and Ark Invest have all refiled their applications in the past week. In response to the SEC’s complaints, they named Coinbase their partner exchange in the updated submissions.
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‘A Disaster for US Investors’ – Cameron Winklevoss
With the topic of crypto ETFs trending in light of recent news, Cameron Winklevoss has taken the opportunity to give his two cents.
In Saturday’s tweet, Winklevoss pointed out that Gemini first submitted an application for a bitcoin ETF to the SEC a full decade ago. He called the SEC’s refusal to approve these products for so long “a complete and utter disaster for US investors.”
Moreover, he called the SEC “a failed regulator” and argued that its policy had pushed spot bitcoin activity offshore to unregulated venues.
He added that it has also pushed investors into “toxic products” like the Grayscale Bitcoin Trust (GBTC). Compared to alternatives such as bitcoin ETFs, GBTC does not offer investors good value for money.
Huge Demand for Crypto ETFs
The US has so far prohibited listing spot crypto funds on stock exchanges. But the first bitcoin futures ETF was approved in 2021. Listed on the New York Stock Exchange, ProShares’ Bitcoin Strategy ETF has seen plenty of demand. In fact, the fund attracted more than $1 billion in its first two days of trading alone.
And Cameron Winklevoss may be on to something in his assertation that the SEC’s policy was driving capital overseas. With limited options for accessing crypto investment opportunities on US stock exchanges, other places have embraced exchange-traded products that track the price of BTC and other crypto assets.
Regulators in countries including Canada, Germany, Sweden, and Brazil have all given the green light for bitcoin ETFs. Meanwhile, In Hong Kong, the first crypto ETFs, CSOP Bitcoin Futures ETF and CSOP Ether Futures ETF were listed on HKEX back in December.
And in recent days, Hong Kong’s crypto ETFs received another major boost. As BeinInCrypto reported, HSBC gives people access to the two CSOP funds on its investment platform. The bank has also approved the Samsung Bitcoin Futures Active ETF for trading.
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