John Reed Stark, founder and chief of the Workplace of Web Enforcement on the U.S. Securities and Alternate Fee (SEC), claims the company will solely approve Bitcoin spot ETF after 2024.
Stark weighed in on the present regulatory setting in a prolonged put up on X, previously often known as Twitter:
Will the SEC Approve Any Of The Latest Bitcoin Spot ETF Functions?
Folks typically ask for my opinion on whether or not the SEC will approve any of the latest spate of bitcoin spot ETF purposes, which is an fascinating and necessary query.
My take is that the present SEC will… pic.twitter.com/lPXebl03Y4
— John Reed Stark (@JohnReedStark) August 13, 2023
Within the put up, Stark cited a letter to the SEC from Higher Markets highlighting issues with the present setup for spot BTC ETFs. In accordance with the monetary watchdog, the Bitcoin ETF sector has a historical past of “artificially inflated” buying and selling volumes brought on by runaway incidents of wash buying and selling and worth manipulation.
Higher Markets additionally identified that the spot Bitcoin market was extremely concentrated and relied on a small group sustaining the community.
In Stark’s opinion, the problems highlighted within the non-profit group’s letter to the SEC created important weaknesses within the proposed Bitcoin-based ETFs that dangerous actors might manipulate.
Due to this fact, Stark, who runs a cybersecurity consultancy agency, believes it’s farfetched to think about the regulator will approve spot Bitcoin ETFs.
The ex-SEC official additionally claims that crypto regulation has change into extra partisan, with the present SEC workplace closely skewed towards Democrats. Nonetheless, the company’s stance might change considerably after Election Day, implying {that a} Republican president could result in extra favorable circumstances for cryptocurrency, he suggests.
Hester Pierce for SEC chair?
Curiously, the SEC began coming down closely on the crypto trade throughout the tenure of Jay Clayton, a Republican appointee of former President Donald Trump. Clayton, who issued 57 enforcement actions in opposition to the crypto trade in his time, is on report advising his successor Gary Gensler to approve spot Bitcoin ETFs.
Suppose the Republicans win the presidency in 2024, Stark expects two situations to play out: the brand new administration will drastically scale back crypto enforcement actions for registration breaches and as an alternative concentrate on fraud, and it’ll even be extra open to crypto funding devices like Bitcoin ETFs.
The prolific creator additionally foresees commissioner Hester Pierce, popularly often known as ”Crypto Mother,” taking on from Gensler as the brand new SEC chair. If that had been to occur, Stark believes a lot of the company’s crypto-related enforcement actions would cease, given Pierce’s report of opposition.