Key figures in the crypto industry have revealed the potential consequences of the Securities and Exchange Commission's (SEC) rulings on the creation and redemption of digital assets in kind.
The excitement surrounding the SEC's potential approval of spot Bitcoin ETFs on January 10 has fueled retail crypto investor sentiment, while global investors are anticipating significant inflows into the digital currency market.
However, some market experts, such as U.S. financial lawyer Scott Jonsson, Castle Island Ventures founder Nick Carter, and exchange BitMEX, have expressed concerns about the upcoming launch of spot Bitcoin ETFs, citing the hawkish policies of the U.S. watchdog, CoinGape reported.
Scott Johnsson, a General Partner and General Counsel for Van Buren Capital, points to the SEC's reluctance to approve changes that would allow for the creation or redemption of digital assets in kind as a key problem.
On his X (Twitter) page, Johnsson highlights the SEC's skeptical attitude toward compliance, which, despite its authority, results in less investor protection. He believes that the SEC's stance favors a new, potentially less safe product and creates additional risks for investors.
Nick Carter expressed solidarity with Scott Johnsson's views. He emphasizes that the SEC is finding new and inventive ways to defraud the crypto industry.
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Carter points out that, from a practical standpoint, the SEC's position means that the efficiency of cryptocurrency ETFs will decrease as the process of creating and redeeming assets becomes more expensive. However, it is still unclear whether this will lead to tracking errors or higher expense ratios, but it will definitely lead to higher costs.
Read more: Cathie Wood comments on meeting with the SEC to discuss Bitcoin ETFs.
