Better Markets CEO Opposes Bitcoin ETF Approval Over Fraud Concerns

In a recent report, Dennis Kelleher expressed his stance against the approval of the pending spot Bitcoin exchange-traded funds (ETFs) application, claiming that it might expose investors to more risks as well as increase the rate of fraudulent activities in the crypto space. On the other hand, James Seyffart from Bloomberg openly supported the approval of the ETF while claiming that it helps to diversify investment.

After a federal court in the US compelled the United States Securities and Exchange Commission to review its initial decision on spot Bitcoin ETF, the entire crypto community has been in constant debate on the potential verdict of the commission and how it would affect the crypto market.

Expressing his thoughts on the matter, the CEO of Better Markets, Dennis Kelleher, strongly opposed the approval of the financial instrument. However, some other prominent figures supported the approval of ETF, stating the potential benefits it offers the crypto market.

Kelleher Is Worried Over Investors’ Protection

According to a letter he addressed to the SEC Secretary Vanessa Countryman, Kelleher laid strong claims on spot Bitcoin ETFs, seeking the commission to reject the applications. In his letter, he stated that approving the financial instrument could make investors vulnerable to significant risks such as possible market manipulation or fraud cases in the crypto market. 

In other words, Kelleher pointed out the need for the SEC to uphold its core principle of protecting investors. In addition, his main emphasis in the supplemental comment letter was that the proposed spot Bitcoin ETFs could create a trading avenue where bad actors can easily manipulate or steal investors’ funds, cases which are already rampant in the crypto ecosystem. 

Backing his claims, the CEO referred to statistics showing that about 324,000 crypto investors were scammed through phishing links last year and about the cumulative funds lost due to the criminal acts during this period were totaled to be over $295 million.

Crypto industry seeks regulatory approval

Furthermore, Dennis Kelleher pointed out that if the SEC should endorse the spot Bitcoin ETFs, the move would encourage the United States government to further recognize the crypto industry as a credible financial innovation. Consequently, the approval would incite more confidence in retail and institutional investors, encouraging them to invest more in crypto products. However, Kelleher thinks this painted scenery could be very harmful to US investors, given the numerous risks that have plagued the industry.

Despite the logical reasons behind his negative stance, not everyone buys the idea of Kelleher, as reports showed that several big players in the crypto community supported the approval of the financial instrument. For instance, an ETF analyst for Bloomberg, James Seyffart openly criticized Kelleher’s perspective while stating his reasons for supporting the approval. 

According to the analyst, the majority of the asset management firms that applied for the spot Bitcoin ETFs expended significant efforts to advance their applications, showing that they have passion and great desire to offer more diversified investment options to investors.

Crypto Community Awaits SEC’s Verdict

In addition, Eleanor Terrett, a popular journalist at Fox Business, remarked on Kelleher’s negative stance on ETFs approval. He stated that Kelleher’s remarks during a speech in May 2023 when he called the proposed spot Bitcoin ETF approval a public fraud, remain the bone of contention in the crypto market now, as many experts have diverse opinions on the potential impact of crypto on the traditional financial markets.

Nonetheless, the crypto community is now keeping tabs on the SEC’s decision as the commission reviews the 11 asset management firms that submitted their 19b-4 amendment documents as demanded by the SEC to complete the final review stage. However, US exchanges still need the S-1 document to index shares of investment securities with crypto asset backing.

According to some reports, the SEC’s final verdict concerning the approval of ETF might be slated for January 10. And irrespective of the outcome of the commission’s decision, it would surely reshape the structure of crypto regulation in the US.

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