The U.S. Securities and Exchange Commission (SEC) continues to prolong its review of the Ark 21Shares bitcoin exchange-traded fund (ETF) application. This scenario flashes sprinkles of hesitation on SEC’s part, looking to ensure the financial soundness of such an instrument. Meanwhile, Ark Investment Management and 21Shares, which have been relentlessly pursuing ETF approval since 2021, remain strongly bullish on their objective.
While the SEC has confirmed previous rejections of spot bitcoin ETF products due to fears of potential market manipulation and inadequate consumer protection, the advantages of such an ETF are undeniable. It opens a wider spectrum of the general investing public to trade and hold bitcoin’s value offering without the necessity of retaining the digital asset directly. Cathie Wood, CEO of Ark Invest, displayed confidence, expressing her anticipation of delays but expecting the SEC eventually to green-light multiple applications unanimously. Her projection draws an optimistic picture of the blockchain future, with the key to success lying in effective marketing and communication strategies.
On the flip side, the legal counsel at consumer advocacy group Better Markets, Scott Farnin, presented a stark contrast on this issue. He believes that the surveillance-sharing agreements in proposed ETFs are overall weak and ineffective. His statement implies a direct criticism of the approach in dealing with aspects of market manipulation, a concern that resulted in the SEC rejecting past applications.
Farnin is also wary of the historical side of the spot bitcoin markets. Their susceptibility to artificial volume inflations due to rampant manipulation and wash trading raises alarm bells. The Bitcoin network’s high concentration, which depends on a selected group for maintenance, poses a potential vulnerability to manipulation by malicious elements. Farnin’s approach, hence, raises concerns about risks for investors while underscoring the public interest.
In summarizing, SEC’s protraction on ETF applications seems to embody both the excitement and apprehension around blockchain technology. It signals a need for substantial safeguards to balance financial innovation with potential pitfalls. As the SEC ponders on multiple applications from industry bigwigs, the blockchain future, its markets, technologies, and safety seem to be teetering on a wire. Indeed, these developments are worth following.
Source: Coindesk
