SEC Commissioner Raises Concerns About Bitcoin ETFs
During a Senate Banking Committee hearing, SEC Commissioner Caroline Crenshaw expressed her opposition to bitcoin exchange traded products (ETPs), citing concerns about fraud and manipulation in the underlying spot markets.
Crenshaw's concerns stem from the fact that she believes these ETPs, while marketed as ETFs, operate under different rules. She argues that approving bitcoin ETPs could further harm investors, particularly those who rely on retirement accounts.
In January, Crenshaw maintained her opposition to bitcoin spot ETFs after the SEC lost a court battle with Grayscale. She emphasized that the agency's approval of these products would "put us on a wayward path that could further sacrifice investor protection."
Currently, the SEC is reviewing similar trading products for Ethereum's ether (ETH).
The hearing also saw testimony from other nominees for financial regulatory positions, including Christy Goldsmith Romero, Kristin Johnson, and Gordon Ito.
Senator Cynthia Lummis raised the question of banks holding customer's cryptocurrency, to which Commissioner Romero responded that it's not the FDIC's role to dictate which industries banks should serve.
Overall, the hearing highlighted the ongoing scrutiny of the crypto sector by U.S. regulators, specifically regarding the potential risks associated with bitcoin ETPs and the need for increased oversight in the industry.
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