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Home News Gemini Cofounder Blames FTX Disaster on SEC

Gemini Cofounder Blames FTX Disaster on SEC

Daniela Kirova
Daniela Kirova
Daniela Kirova
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Daniela Kirova
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Daniela is a writer at Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. She has over 15 years of experience as a writer, having ghostwritten for several online publications in the financial sector.
July 3rd, 2023
  • Winklevoss criticized SEC for refusing to approve a spot Bitcoin exchange-traded fund
  • Investors have been forced into the Grayscale Bitcoin Trust and other "toxic" products

The US Securities and Exchange Commission (SEC) has been pushing investors into unregulated and toxic crypto exchanges and products for at least a decade according to Gemini cofounder Cameron Winklevoss, quoted by Cointelegraph.

The regulator should approve a spot Bitcoin ETF

He levelled sharp criticism at the regulator’s consistent refusal to approve a spot Bitcoin exchange-traded fund (ETF), pointing out that Gemini filed for such approval exactly a decade ago. He commented that the SEC’s refusal to approve such products for ten years has led to “a complete and utter disaster for US investors” and also shows it has failed as a watchdog.

A spot Bitcoin ETF tracks the price of Bitcoin. The term “spot” indicates that the ETF is designed to reflect the current price of Bitcoin at any given time, rather than using derivative contracts or futures. In other words, a spot Bitcoin ETF holds actual Bitcoin as part of its fund assets, intending to provide investors with direct exposure to the cryptocurrency’s price movements.

Winklevoss: Grayscale Bitcoin Trust is toxic

According to Winklevoss, investors have been forced into the Grayscale Bitcoin Trust (GBTC) and toxic products like it because no spot Bitcoin ETF has been approved. GBTC is trading at a huge discount to the Bitcoin price and its fees are exorbitant in his opinion.

SEC forced investors into exchanges like FTX

Winklevoss added that SEC’s refusal also forced US investors into unregulated and unlicensed offshore exchanges, such as FTX. He said:

Maybe the SEC will reflect on its dismal record and instead of overstepping its statutory power and trying to act like the gatekeeper of economic life, it will focus on fulfilling its mandate of investor protection.

No shortage of spot fund candidates

A large number of companies has filed for a spot Bitcoin ETF recently, including Invesco, BlackRock, ARK Invest, Fidelity, WisdomTree, and Valkyrie. According to the regulator, many of these filings are unclear and incomprehensive. Fund managers have been asked to resubmit them.

Gemini is in an extended court mediation with Digital Currency Group (DCG) subsidiary Genesis. DCG is the owner of GBTC manager Grayscale. Gemini has had legal troubles with the SEC as well.

Contributors

Daniela Kirova
Writer
Daniela is a writer at Bankless Times, covering the latest news on the cryptocurrency market and blockchain industry. She has over 15 years of experience as a writer, having ghostwritten for several online publications in the financial sector.