Regulation
Crypto fraud and poor regulation may jeopardize the approval of ether ETFs
The U.S. Securities and Exchange Commission is expected to make a key decision on approval ether exchange-traded funds next week.
But it will likely fail due to the lack of an overarching regulatory framework for all cryptocurrencies, according to Ric Edelman, head of the Digital Assets Council of Financial Professionals.
“I think there will be another delay, which frankly is not bad news,” Edelman told CNBC.ETF board” this week.
Edelman, an investor and personal finance author, believes there needs to be an emphasis on regulations to protect people from crypto scams. He points out that current laws are more than half a century old and are not designed for digital technology.
“Without cops on duty, investors are forced to set up their own business outside of the investment advisory community because the community can’t help them because we don’t know what the rules are. And they’re ending up in scams and fraud,” he said. “The sad irony is this [SEC Chair Gary] Gensler says he wants to protect the consumer. But his refusal to write a regulation is actually hurting the consumer instead of helping him.”
Bitwise Asset Management’s Matt Hougan is also pushing for new rules.
“80-year-old securities laws aren’t a good fit for this world of digital assets, cryptocurrencies and 21st-century technology,” the firm’s chief investment officer said. “Ultimately, I think everyone wants the same thing. They wanted a safe platform where investors were protected and innovation was protected.”
Hougan notes that Bitwise has its own application for an ethereum spot ETF and is bullish about the future.
“We have entered the era of cryptocurrency ETFs. We have seen… bitcoin ETFs arrive on the market. We’ve seen the great things they’ve done for investors: reduced costs, improved regulation, improved security and peace of mind,” Hougan said. “I think we’ll get there with Ethereum as well.”
The two ether ETF proposals, presented by VanEck and ARK Investments/21Shares, are will be approved or denied this month.