Congressman Tom Emmer (MN-06) and Congressman Datten Soto (FL-09) are asking the Security & Exchange Commission (SEC) why are they not allowing for an exchange-traded fund (ETF). The congressmen constructed a bipartisan communique’ sent to SEC Chairman Gary Gensler.
It is clear, based on previous SEC stated concerns, that the SEC is allowing for a exchange-traded fund (ETF) based on derivatives contracts to trade, but not at all comfortable allowing a Bitcoin spot ETF to trade.
The Congressmen sent Gensler the letter stating as much. In the letter on Wednesday, Emmer and Soto asked the SEC chair why the agency recently authorized a futures-based bitcoin ETF but has been reluctant to approve those linked to bitcoin itself.
The Bitcoin futures ETFs that commenced trading last week are based on CME Bitcoin futures contracts. The CFTC regulates the CME. Going further, over 90% of the CME Bitcoin futures pricing comes from Coinbase, Kraken, and Bitstamp, three spot Bitcoin exchanges.
The trading of Bitcoin futures ETFs, based on regulated futures contracts that are based largely on three spot markets, begs the question of what makes a Bitcoin spot ETF, that is based on the underlying asset, any different? Both products are based on the spot market.
“The SEC’s approach to cryptocurrency regulations has been unacceptable and clarity on the issue needs to brought forth. While the trading of Bitcoin futures ETFs is a great step forward for the millions of American investors who have been demanding regulatory clarity, it does not make sense that Bitcoin spot ETFs cannot also commence trading. As I am sure Chairman Gensler understands, Bitcoin futures are, by definition, a derivative of the underlying Bitcoin spot market,” Congressman Emmer said.
“American investors deserve consistency and choice. If the SEC cannot outline the perceived material difference in risk profiles, then they should allow ETFs based on spot Bitcoin to be traded. I look forward to Chairman Gensler’s response to our concerns,” Congressman Emmer concluded.
