SEC Commissioner no longer wants to categorically deny crypto spot ETFs

Last Updated: 18 June 2022

The cryptocurrency market may be getting a ray of hope after a lot of sad weeks. A commissioner of the SEC has a positive attitude towards crypto spot Exchange Traded Funds (ETFs). This is a fund that allows you to invest in crypto.

What is an ETF?

An ETF has two different types: a spot ETF and a futures ETF. With the latter – the futures ETF – you indirectly buy contracts that follow the price of a certain crypto currency. This has been legal in the US since last year. This way, people can invest in crypto through a roundabout way.

The problem with these futures ETFs is that they do not buy crypto, but contracts. Many people would like to see this different, because this way no coins are being bought. A solution for this is therefore a spot ETF. As the name suggests, you buy crypto on the spot.

Stop rejecting

This means that the fund has real crypto as underlying value. This is a much better way according to many, and so does Commissioner Hester M. Peirce of the US Securities and Exchange Commission. She called for “stopping the categorical refusal of spot crypto exchange-traded products.”

This call was in the comments on – hold on – “Regulatory Transparency Project Conference on Regulating the New Crypto Ecosystem: Necessary Regulation or Crippling Future Innovation?” published on June 14.

The SEC has been refusing crypto spot ETFs for months, while futures ETFs are allowed to trade. According to the commissioner, “The Commission’s resistance to a spot bitcoin Exchange Traded Product is becoming almost legendary.”

SEC is tougher on crypto

Peirce gets asked every so often when the SEC will approve a spot bitcoin ETF. She says she has no idea how to answer this frequent question. After all, the SEC refuses ETF after ETF.

“The reasons for this resistance to a spot product are hard to understand, other than an acknowledgement that the Commission has decided to subject anything related to bitcoin – and presumably other digital assets – to a stricter standard than it applies to other products.”

  • Steven Gray

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