The crypto advocacy group Chamber of Digital Commerce called on the Securities and Exchange Commission, or SEC, to approve applications for Bitcoin exchange-traded funds (ETFs) in the interests of United States-based investors.
In a Monday report titled "The Crypto Conundrum," the Chamber of Digital Commerce said the U.S. has fallen behind other countries whose residents have access to crypto investment vehicles including Bitcoin (BTC) ETFs. The crypto advocacy group added there were “no reported instances of hacking or theft and no indications of market manipulation” related to Bitcoin ETFs released abroad, suggesting the SEC’s reasoning in previously rejecting applications was “misguided and counterproductive.”
“As the SEC continues to stonewall, the United States continues to fall further behind other countries as capital that would have been invested in the United States, which would be managed by U.S. firms employing U.S. persons, is instead deployed in other, more innovation-friendly countries,” said the Chamber of Digital Commerce — naming Canada, Germany, Sweden, Switzerland and Australia.
The crypto advocacy group pushed back against the SEC citing its obligation to protect investors in denying the approval of a Bitcoin ETF, saying its actions encouraged investors “to acquire their exposure [to crypto] in a less regulated and/or foreign environment where they are much more susceptible to unscrupulous actors and the risks of self-custody.”
“The SEC has now positioned itself as a merit regulator on this matter. It has determined that the American public cannot yet handle the responsibility of familiar, cost-effective, liquid, transparent and regulated access to the Bitcoin markets. Unfortunately, the cost of this position has fallen, and will continue to fall, on U.S. investors and the U.S. capital markets.”
“We can’t deny the huge demand for exposure to this new and innovative asset class,” said Chamber of Digital Commerce founder and CEO Perianne Boring in a Monday interview on Fox Business. “You would think that our regulators would be working with the industry to bring regulated products to the market for retail investors, but they’ve been stopped at every attempt over the past decade.”
According to the report, part of the motivation behind the SEC continuing to deny BTC ETF applications may be political. The CDC said SEC Chair Gary Gensler’s efforts to expand the authority of the regulatory body to include many crypto products was effectively a “jurisdictional land grab.” The group claimed his positions also cut off the engagement between regulators and token issuers.
Related: SEC could approve spot Bitcoin ETFs as early as 2023 — Bloomberg analysts
To date, the U.S. financial regulator has turned down spot Bitcoin ETF applications from 16 companies, often stating the proposed rule changes allowing exchanges to list investment vehicles were not “designed to prevent fraudulent and manipulative acts and practice.” The CDC report claimed that advocacy groups had made “little, if any, progress” in convincing the SEC to change its position on the matter, saying “the United States is no closer to having a Bitcoin ETF than when Cameron and Tyler Winklevoss filed the first registration statement for a Bitcoin ETF in 2013.” However, the SEC has given the green light to several ETFs linked to BTC futures.