Home CryptocurrencyAltcoin Gary Gensler approved of ETFs, but now he’s fighting back

Gary Gensler approved of ETFs, but now he’s fighting back

by SuperiorInvest

The Bitcoin Spot ETF is the first investment product that will allow investors to gain direct exposure to the price of Bitcoin (BTC) through traditional, regulated investment products. It is the first Bitcoin-linked investment product that baby boomers are familiar with and can feel comfortable investing in.

The approval came after a lengthy lawsuit led the D.C. Circuit Court to rule that the SEC had been hypocritical in approving Bitcoin futures ETFs but not spot ETFs. SEC Chairman Gary Gensler made clear his displeasure at having to vote in favor of ETFs in a statement after the vote. (Most ETF approvals, even those that have consistently lost investor funds since their approval, have not been accompanied by a statement from the president, much less one recommending not investing in them.)

Related: Will Bitcoin continue to fall due to ETFs?

This was the first time that an SEC chairman approved an ETF, and in approval he gave a speech warning people not to buy the ETF. This is inconsistent with the SEC’s disclosure-focused mission.

Has the Bitcoin community won? Did we really beat Gary? Not so fast. Allow me an analogy with Star Wars. We are in the second movie, The Empire Strikes Back. Hope for Bitcoin’s revolution in money and as a store of value is not lost, but Gensler is building a second Death Star as we speak.

Before investment advisors and brokers can recommend their clients purchase a share of the Bitcoin spot ETF, they will need to comply with new rules adopted by the SEC in 2019, called Regulation Best Interest (Reg BI).

Reg BI is a Kafka-style regulation, running to hundreds of pages, adopted by the SEC whose main points are that advisors must comply with a duty of care and that that also includes particular disclosure requirements.

Duty of care sounds good, but it is a nebulous idea that in this case is not defined at all in Reg Bi. Therefore, it lends itself to investors suing their advisors based on hindsight bias when their investment doesn’t grow as they expected after the fact.

If you were a uniquely politically minded SEC chairman, motivated to cater to the only anti-Bitcoin senator, Elizabeth Warren, who single-handedly forced President Biden to nominate him in exchange for his decision to withdraw from the Democratic presidential primary, You might be tempted to abuse the subjective judgments Reg Bi left open to openly discourage Reg Bi-governed investment advisors and brokers from advising their clients to invest in the new Bitcoin spot ETFs.

That description is not a real hypothesis. It’s more of a prediction. It will happen. In fact, it has already started to happen. Vanguard has openly told its clients that they cannot invest in the Bitcoin ETF products listed on Fidelity and almost all other brokerage platforms. This is because they are betting that the uncertainty of Reg BI will be abused to openly discourage investment in this platform that the federal courts forced the SEC to open.

This is where Gensler will fight back, in the form of examinations of investment advisors and brokers by SEC examiners and threats to law enforcement personnel. This is the weapon of bureaucracy adhering to an anti-Bitcoin ethos that comes from Gensler’s Senate patron, Senator Elizabeth Warren, who endorsed him for his role as SEC chairman.

This short-term tactic by an SEC chairman whose term has ended won’t matter much to native Bitcoiners, who find the idea of ​​an ETF wrapper around Bitcoin silly anyway. It will simply mean that baby boomers will fall behind in their efforts to diversify their portfolios, courtesy of Gary Gensler.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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