The United States Securities and Exchange Commission (SEC) announced last week that it would delay WisdomTree’s (WETF) Bitcoin ETF application. The reasons for the financial regulator to do this are clear and, the truth of the matter, is that now the review period is lengthening.
According to some specialized media, the request is extended for an additional 45 days as of May 26. The SEC reportedly released this information last week, according to the aforementioned portal.
An important aspect that results from this delay is that WisdomTree’s products on the stock exchange are traded on other markets. Specifically those related to Bitcoin and Ethereum, which began to roll in the Paris and Amsterdam prices.
This is not the first time that the SEC has placed obstacles to Bitcoin ETFs
Bitcoin ETFs go through a difficult path in terms of the “filters” placed by the referred regulator. Apparently, it will not be the last episode in which investors will not be able to access these products.
Some of the reasons, in general lines, that would be behind the deliberate attitude of the SEC, are the “holes” in those proposals. In that sense, the newly appointed director of the Commission, Gary Gensler, was emphatic during a testimony on Capitol Hill, according to the Financial Times.
«There are many pitfalls and challenges to ensuring investor protection in the crypto marketsGensler said. The official’s statements were nothing less than before the subcommittee on financial services of the House of Representatives of the United States.
There is a relationship of distrust between the SEC and crypto products
There are repeated occasions in which the director of the SEC has highlighted his doubts and concerns regarding crypto products. As can be inferred from the various Gensler statements, “loose regulation” cannot be allowed. In other words, the authorities plan a tight grip on the crypto issue before approving options like Bitcoin ETFs.
The ‘heavy’ financial scrutiny on cryptocurrencies, which has yet to be established, now leaves applications from numerous firms up in the air. Along with WisdomTree, other companies such as Fidelity, Wilshire Phoenix, VanEck and First Trust SkyBridge, are in that limbo.
But the approval of Bitcoin ETF applications is only part of the problem for the crypto market. There is an increasing number of requests for this type of option with Ethereum and its projection is to surpass those of Bitcoin. Thus, a kind of bottleneck is created that at some point must be resolved by the SEC.
Another aspect that emerges is pessimism. In such a way, Laura Morrison of Cboe, which has been chosen as an exchange by some Bitcoin ETF projects, is remarkable. «To be honest, we expect all applications to be rejected.», He remarked.
From optimism to disappointment
Gensler’s appointment as head of the SEC produced a wave of optimism among firms applying for Bitcoin ETFs. The official, before being part of the government, taught classes on Blockchain technology at the Massachusetts Institute of Technology.
However, after his appointment to the position, his attitude changed and his calls began to focus on “investor protection.” Now, his preaching can almost be described as anti Bitcoin.
The SEC’s attitude contrasts with the “lax oversight” of the Commodity Futures Trading Commission. This institution in charge of regulating cryptocurrency futures, has allowed spot exchanges such as Kraken or Coinbase to operate without major problems.
Data to take into consideration
- The SEC does not look favorably on cryptocurrencies due to their elusive nature when it comes to monitoring them.
- Therefore, it has maintained a policy of deferring any request for Bitcoin and Ethereum ETFs.
- The chairman of this commission, once a Blockchain professor and crypto enthusiast, now has a belligerent attitude towards digital currencies.
- In a testimony in the House of Representatives, he warned about the danger of cryptocurrencies for the safety of investors.
- At least 6 Bitcoin ETF proposals are on hold due to the SEC’s refusal.