Dennis M. Kelleher, CEO of the nonprofit Better Markets, has urged the U.S. Securities and Exchange Commission (SEC) to reject spot Bitcoin exchange-traded fund (ETF) applications. Kelleher argues that approving a spot Bitcoin ETF would contradict the fundamental principles of the American regulator.
In a letter to SEC Secretary Vanessa Countryman on January 5, Kelleher warned of significant risks to investors if a spot Bitcoin ETF were approved. He stated that sanctioning pending ETF applications could lead to substantial losses for investors, a move he describes as historically erroneous.
Kelleher emphasized that approving spot Bitcoin ETFs would expose investors to potential fraud risks, a longstanding concern in the cryptocurrency industry. He contends that such approval would not only introduce investors to a market tainted with fraud and manipulation.
The letter drew criticism from key figures in the cryptocurrency world. Bloomberg ETF analyst James Seyffart criticized Kelleher, highlighting the considerable efforts asset management firms have put into their ETF applications. Fox Business journalist Eleanor Terrett pointed out Kelleher’s recent negative statements on cryptocurrencies, recalling his past characterization of crypto as a scam worse than a fantasy.
Meanwhile, 11 asset management firms, including BlackRock, submitted their 19b-4 amendment forms to the SEC before the close of business on January 5. These forms are one of the final steps in the SEC’s approval process, but S-1 documents must be completed for ETFs allowing direct crypto investment to be listed on U.S. exchanges. The SEC has until January 10, 2023, to approve or reject the first U.S. spot Bitcoin ETF.