The future of a spot Bitcoin ETF seems ever elusive, with the United States Securities and Exchange Commission (SEC) once again delaying its decision on corresponding applications from institutional giants like WisdomTree, Invesco and Valkyrie. This is not the first time that the SEC has postponed its verdict on WisdomTree’s Bitcoin Trust, which originally filed on Dec. 8, 2021, with the company refiled its application in mid-2023. Similarly, other major players have followed suit, reapplying for a spot Bitcoin ETF after initial rejections.
One could, with some degree of skepticism, say that this regulatory “on hold” position has become a recurring theme in the crypto space. However, it is also essential to appreciate the profound challenges the SEC faces in assessing such novelties, not to mention the intense scrutiny that it is under to get it right. This caution may reveal the regulator’s desire to balance the need for technological advancement with the necessary mandate to protect investors.
On another regulatory front, the burgeoning crypto ATM industry is witnessing its exponential growth amid significant criticism for allegedly illegal or predatory behaviour. The very nature of crypto ATMs blurs the line between access to advanced financial services and exploitative profit-making strategies, sparking a crucial discussion on the subject matter.
A report released by the Federal Reserve Bank of Kansas City highlighted that the average fee to use a crypto ATM is 15-16%, sometimes escalating up to 20% due to adverse conversion rates. This fee structure has raised eyebrows, with critics arguing that such high costs can lead to substantial loss for novice crypto investors, especially with volatile cryptocurrencies.
Moreover, Crypto ATMs – despite providing anonymity and convenience – have also come in the firing line for facilitating money laundering and scams. As per Chainalysis data, victims have transferred $345 million through crypto ATMs in scams during 2022 alone. These allegations raise serious concerns about the role of crypto ATMs in the broader financial ecosystem.
In conclusion, regulatory authorities like the SEC are grappling with how to approach and control this rapidly-evolving industry. The dangling question of approving a Bitcoin ETF and the issues surrounding Crypto ATMs highlight both the promises and perils of incorporating cryptocurrencies into mainstream financial systems. Regulatory development, therefore, remains a crucial measure not just for the well-being of this industry but also for the safety of its participants.
Source: Cointelegraph
