Disapproval of BTC Exchange-traded funds (ETFs) by SEC
New disagreements among leaders of US regulatory bodies were heard during a panel at the BiPartisan Policy Center on February 12 in Washington. On this occasion, in his expose on BTC ETFs, Brian Quintenz from the United States Commodity Futures Trading Commission (CFTC) pointed all mistakes, made comparations and gave suggestion to overcome problems like this in the future.
Settlement index, the proposal by commissioner Quintenz
Commissioner Quintenz discussed the SEC’s decision not to approve the BTC exchange-traded funds (ETFs), especially emphasizing that specific price manipulations should not lead to similar conclusions or influence the SEC. Quintenz compared the work of the U.S. Security and Exchange Commission to the previous decisions of the agency to which he is a trustee and jurisdiction of contracts outside the Bitcoin Futures. He considers it necessary not to be “easily subjected” to manipulations. The resistance of any product is questionable here because every good with sufficient resources can be manipulated. Therefore, he proposes non-commodity-based products, a mathematical method of settlement index. In the case of such contracts and in case of less liquidity on one exchange referenced, the index is again more complicated for manipulation.
To the extent expressing of dissatisfaction with the disapproval of ETFs, Quintenz displays his parallels through an example of a contract on Bitcoin futures in the CFTC. Those contracts are designed to be settled to “multiple volumes weighted common prices in five minutes increments throughout one hour over multiple exchanges.”
In this case, if anyone wants to manipulate the settlement index, he would have to hold a large part of the volumes on multiple exchanges, also at all-time five-minute intervals. Even if someone could do it, this action would be immediately discovered.
ETFs had to be approved, the opinion of the SEC commissioner known as the ‘Crypto Mom’
Another panel speaker, Heister Peirce from the SEC, known as “Crypto Mom” because of her loud attitude of commission’s disapproval of Winklevoss’ brothers’ proposal, not once, but twice, concerning the ETFs.
Heister Peirce further states that the agency has so far expressed negative attitudes towards products based on cryptocurrency. On this occasion, she underlines this may produce an image that the SEC underestimates the Bitcoin market as under-regulated. Still, crypto market reminds that many other branches and exchanges are not based on strict regulations; however, the companies build massive products on them. In the case of the Winklevoss brothers, the commission exceeded its role and overstepped its limitations, and the refusal to adopt the Bitcoin (BTC) exchange-traded funds or ETFs was a wrong move by the commission, she thinks.