U.S. lawmakers have called on the Securities and Exchange Commission (SEC) to approve bitcoin spot exchange-traded funds (ETFs). Since the SEC has approved the trading of bitcoin futures ETFs, the lawmakers said it “should no longer have concerns with bitcoin spot ETFs and should show a similar willingness to permit the trading of bitcoin spot ETFs.”
Lawmakers Urge SEC to Permit Trading of Bitcoin Spot ETFs
U.S. Representatives Tom Emmer and Darren Soto sent a bipartisan letter to the chairman of the Securities and Exchange Commission (SEC), Gary Gensler, Wednesday regarding bitcoin exchange-traded funds (ETFs). So far, the SEC has approved two bitcoin futures ETFs but has yet to approve any bitcoin spot ETF.
Rep. Emmer said:
The SEC’s approach to cryptocurrency regulation has been unacceptable. While the trading of bitcoin futures ETFs is a great step forward for the millions of American investors who have been demanding regulatory clarity, it does not make sense that bitcoin spot ETFs cannot also commence trading.
Noting that the SEC approved two bitcoin futures ETFs, Reps Emmer and Soto wrote: “We question why, if you are comfortable allowing trading in an ETF based on derivatives contracts, you are not equally or more comfortable allowing trading to commence in ETFs based on spot bitcoin.”
They explained, “Bitcoin spot ETFs are based directly on the asset, which inherently provides more protection for investors,” adding that futures products “are potentially much more volatile than a bitcoin spot ETF and may impose substantially higher fees on investors.”
Referencing the SEC’s previous reasoning for disallowing spot bitcoin ETFs, the lawmakers asserted that “Since the SEC no longer has concerns with bitcoin futures ETFs,” then “it presumably has changed its view about the underlying spot bitcoin market because bitcoin futures are, by definition, a derivative of the underlying Bitcoin spot market.” They continued:
The SEC should no longer have concerns with bitcoin spot ETFs and should show a similar willingness to permit the trading of bitcoin spot ETFs.
The letter also notes that while the SEC continues to deny bitcoin ETFs, “numerous spot bitcoin investment vehicles have been offered,” with more than $40 billion in assets under management (AUM).
“However, because these products have been unable to register as ETFs with the SEC, public trading typically occurs at a value that is not equivalent to net asset value, and in fact, these products have recently been trading at steep discounts to their net asset value,” the congressmen stressed. They elaborated:
Permitting futures-based ETFs while simultaneously continuing to deny spot-based ETFs would further perpetuate these discounts and clearly go against the SEC’s core mission of protecting investors.
The letter concludes: “The SEC is in a position to approve bitcoin futures ETFs, as reflected by the trading of these products, so it should also be in a position to approve bitcoin spot ETFs.”
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News Source from news.bitcoin.com