NEW YORK - BitGo CEO Mike Belshe has expressed skepticism over the likelihood of the Securities and Exchange Commission (SEC) approving spot bitcoin exchange-traded funds (ETFs), citing concerns over market structure and the potential for manipulation. In a recent interview, Belshe pointed to the lack of separation between exchange services and custody roles, with particular reference to Coinbase (NASDAQ:COIN)'s role as a custodian.
The cryptocurrency industry has been closely watching regulatory developments, especially in light of recent events such as the collapse of FTX and the subsequent legal troubles of its founder, Sam Bankman-Fried. The SEC has shown increased vigilance in its efforts to protect investors, which has included delaying the review of new ETF applications like that of Hashdex's spot Bitcoin ETF.
Despite a general sense of optimism among industry analysts for a favorable decision in January, Belshe's comments reflect a more cautious outlook. He highlighted that key financial entities continue to select Coinbase Custody for their ETFs, a strategy mirrored by FTX before its downfall. This approach has come under scrutiny as regulators aim to prevent market manipulation.
The backdrop to these discussions includes BlackRock (NYSE:BLK)'s ETF application from June, which was met with a surge in BTC value, reaching $36,200 as reported by TradingView. However, the SEC's commitment to stringent oversight suggests that more Bitcoin ETF submissions may face rejection due to these unresolved issues around market structure and investor safety.
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