Crypto Market Regulation Is Critical Post-Bitcoin ETF Approval – CFTC Chief
The chairman of the US CFTC has raised concern over the ripple effect of the recently approved spot Bitcoin ETF. The official believes that participants in the crypto industry may misunderstand the approval as a definitive regulation for Bitcoin and other assets.
User Misinterpretation
Rostin Behnam, the Commodity Futures Trading Commission (CFTC) chief, highlighted the risk that institutional and individual investors will misconstrue the legal implications of the spot Bitcoin ETFs recently authorized by the US Securities and Exchange Commission (SEC). The approval allows investors to have exposure to Bitcoin through SEC-regulated stock exchanges, eliminating the need to possess the digital commodity directly.
However, Behnam noted the lack of regulatory oversight over digital asset exchanges and the currency market. According to the CFTC chair, one major problem is the lack of a comprehensive framework to address the opaque and inconsistent practices in digital asset currency markets.
Behnam expressed his concerns about trade settlement, conflicts of interest, data reporting, cybersecurity, consumer protections, transparency, and overall market integrity. Furthermore, he opined that Exchange-Traded Products (ETPs) have effectively promoted an appealing new financial product by subjecting a speculative and volatile asset to indirect regulation. The official added that the crypto market requires more attention in terms of regulation to ensure the efficacy and integrity of Bitcoin ETFs.
Crypto Regulation And US Elections
The US government has been actively involved in discussions about the enforcement of crypto regulations, prompted by the expanding demands of the crypto industry. Last September, the CFTC Commissioner Caroline Pham recommended developing a limited pilot program to solve crypto regulatory matters.
Pham argued that the proposed initiative is similar to regulatory sandboxes already developed at the state level. Anticipation in the crypto business is growing, with many players hoping for more regulatory certainty as the November presidential election in the United States gets closer.
According to a recent Crypto Council for Innovation study, most cryptocurrency enthusiasts believe that a presidential candidate’s perspective about cryptocurrencies is slightly or highly essential in influencing their voting decisions.
Google Announces Ads For Spot Bitcoin ETF
Meanwhile, Google has made significant changes to its advertising strategy. Starting January 29, 2024, issuers of “cryptocurrency coin trusts” can officially promote their products and services on Google.
However, Google accreditation is a necessity for these issuers before placing their adverts. Google clarified the term “Cryptocurrency Coin Trusts,” as a type of financial instrument that allows for the exchange of shares in trusts that hold large amounts of cryptocurrency.
Such a broad definition implies that Google’s advertising platform can now market a wide range of crypto-related adverts to the US public, not just by Spot Bitcoin ETFs. Given Google’s previous prohibitions on Bitcoin advertising, this measure is a progressive step for the cryptocurrency community.
Accelerating Marketing Moves
Many spot BTC ETF issuers aggressively explore methods to gain a considerable market share in this competitive landscape. Bitwise, for example, has taken a transparency-focused strategy by becoming the first to reveal its assets’ BTC addresses to instil confidence and transparency among potential investors.
Bitwise has further proved its commitment to social responsibility by donating 10% of its Bitwise Bitcoin ETF proceeds to three non-profit organizations promoting Bitcoin open-source development. Meanwhile, Franklin Templeton, another Spot Bitcoin ETF issuer, has taken a novel approach to engage with the cryptocurrency community by sharing crypto-related educational messages on its social handles.
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