Author: Global Market Report; Source: cnBeta
Recently, U.S. Senators Jack Reed and Laphonza Butler Calls on the U.S. Securities and Exchange Commission (SEC) to stop approving any new cryptocurrency ETFs, citing risks faced by retail investors. Reed and Butler have taken a firm stance on cryptocurrency exchange-traded funds (ETFs), expressing serious concerns about the significant risks these financial products pose to retail investors due to their susceptibility to fraud and market manipulation. The move comes amid broader scrutiny of the cryptocurrency market by regulators.
< p style="text-align: left;">The two senators said in a statement that given the niche nature of the digital cryptocurrency trading market, the market is not ready to deal with the large amount of investor capital that ETFs may trigger. influx, which threatens to destabilize the industry. They argue that the cryptocurrency market remains largely unregulated and lacks the transparency and oversight mechanisms common in traditional financial markets.
In addition, the two lawmakers also urged the SEC not to allow the recently approved spot Bitcoin ETF to set a precedent for approving new ETFs in the future. They argue that while the Bitcoin market is more mature and subject to better scrutiny, the markets for other cryptocurrencies are more susceptible to misconduct. The duo also called for increased oversight of already launched Bitcoin ETF products, including regulatory scrutiny of brokers and advisors.
Some industry observers believe that the success of spot Bitcoin ETFs has unsettled some lawmakers on Capitol Hill. Bloomberg ETF analyst Eric Balchunas said: "The huge success of the Bitcoin ETF has made the top people uneasy. They are a little regretful."
Suspension of approval of new cryptos The call for ETFs highlights lawmakers’ growing concerns about the intersection of crypto assets with mainstream financial products. The two lawmakers’ calls echoed concerns expressed by other parts of the U.S. government and financial industry experts. They have been outspoken about the potential for market manipulation in sparsely traded crypto-assets, as the decentralized nature of cryptocurrencies and the lack of a central regulator make it challenging to effectively monitor and mitigate fraudulent activity.
Now, the future of digital currency ETFs is up in the air as the SEC begins considering the senators’ demands. The results could have far-reaching consequences for the cryptocurrency market and the millions of retail investors looking to gain exposure to digital assets through traditional investment vehicles.
Huang Bo
