Cameron Winklevoss, co-founder of Gemini, expressed that the SEC’s rejection of a spot Bitcoin ETF has been a “total disaster” for investors in the United States.
According to Cameron Winklevoss, co-founder of Gemini, the United States securities regulator has been directing investors towards risky and unregulated crypto products for the past decade.
Winklevoss criticized the U.S. Securities and Exchange Commission (SEC) for consistently rejecting spot Bitcoin exchange-traded funds (ETFs), highlighting that it has been a decade since they first applied for approval of their own ETF.
He expressed his concern that the SEC’s repeated denial of these products has had detrimental consequences for U.S. investors, leading him to believe that the SEC has failed as a regulator.
Winklevoss stated that due to the absence of an approved spot Bitcoin ETF, U.S. investors have been directed towards “toxic products” such as the Grayscale Bitcoin Trust (GBTC). He highlighted that GBTC trades at a significant discount compared to the actual price of Bitcoin and imposes “astronomical” fees on investors.
Today marks 10 years since @tyler and I filed for the first spot Bitcoin ETF. The @SECGov's refusal to approve these products for a decade has been a complete and utter disaster for US investors and demonstrates how the SEC is a failed regulator. Here's why:
-"protected"… pic.twitter.com/xmK1xo1iX8
— Cameron Winklevoss (@cameron) July 2, 2023
Currently, the Grayscale Bitcoin Trust (GBTC) is experiencing a discount in its net asset value (NAV) of around 30% compared to the price of Bitcoin, as reported by YCharts. Moreover, the GBTC imposes an annual fee of 2%, which is considerably higher than the average fee of 0.40% observed in a recent study by financial services firm MorningStar conducted in July 2022.
According to Winklevoss, the SEC’s rejection of a spot Bitcoin ETF has resulted in U.S. investors seeking alternative options on offshore platforms that lack proper licensing and regulation. He specifically mentioned FTX as one of these platforms and criticized it as “one of the biggest financial frauds in recent times.”
Winklevoss expressed his hope that the SEC would reflect on its unsatisfactory track record and shift its focus towards fulfilling its role of safeguarding investors instead of trying to control economic activities beyond its authorized scope.
Winklevoss made his remarks at a time when several companies, including BlackRock, Fidelity, WisdomTree, Invesco, Valkyrie, and ARK Invest, have been actively submitting, renewing, or modifying filings for a spot Bitcoin ETF.
However, reports suggest that the SEC has deemed some of these filings as insufficient and lacking clarity and comprehensiveness. As a result, the regulator has requested the fund managers to revise and resubmit their filings, specifically asking for clearer language to be used.
At the same time, Gemini, the cryptocurrency exchange co-founded by Winklevoss twins, is engaged in a lengthy court mediation process with Genesis, a subsidiary of Digital Currency Group (DCG), which also happens to own Grayscale—the entity responsible for managing the GBTC. Additionally, Gemini is facing legal charges from the SEC and has an ongoing court case related to these allegations.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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