- The SEC may not be approving any of the current Bitcoin spot ETF filings soon, according to BitGo CEO, Mike Belshe.
- The SEC is concerned about the separation of exchange and custody roles in the crypto market.
- The SEC’s lawsuit against Coinbase in 2022 clearly shows that the agency is against Coinbase’s market structure.
- Some experts, like Former BlackRock managing director Steven Schoenfield, predict that the SEC may approve a Bitcoin ETF in three to six months.
- Belshe believes that crypto-native companies will be able to offer better ETF services to investors.
The crypto community eagerly waits for the U.S. Securities and Exchange Commission (SEC) to approve a new Bitcoin spot ETF.
However, BitGo CEO Mike Belshe has thrown a bucket of cold water over the fires of hope and has warned that the SEC may not be approving any of the current filings anytime soon.
Here’s everything we know:
The Good News and the Bad News For Bitcoin ETF
In a recent interview with Bloomberg earlier this week, Belshe shed some good and bad news on the issue of the Bitcoin ETFs.
According to Belshe, the good news is that the SEC is engaging with the ETF applicants and showing some signs of progress.
On the darker side, Belshe says that the agency is likely to throw another round of applications out of the window, before approving a final batch.
The SEC, right from time, has cited concerns over the separation of exchange and custody roles in the crypto market.
Belshe, in the interview, said that the SEC simply wants to maintain a difference between exchanges and custodians, as we have seen in traditional financial markets.
Belshe mentions that the Bitcoin ETF filings are a problem because several of the ETF applications on the SEC’s desk rely on Coinbase custody, and may hinder a potential approval
Coinbase Versis FTX?
The way FTX suddenly burst into flames around this time last year, is no longer secret.
Belshe in the interview, drew a few parallels between Coinbase and FTX. Belshe says that one of the reasons the collapse of FTX had such an effect on the market is that FTX tried to take on all the functions of an exchange, a clearing house, and a broker.
This was directly against the SEC’s principles, leading to the agency suing them late last year.
Belshe maintained that Coinbase is not as extreme as FTX. However, it is also following a similar playbook by offering both exchange and custody services.
Because of this, the SEC is under obligation to reject the current applications.
Belshe went further to remind us of the SEC’s lawsuit against Coinbase in 2022.
The BitGo CEO says that this lawsuit is a clear indication that the agency was against Coinbase’s market structure issue.
According to the details of the lawsuit, the SEC maintains that Coinbase should have registered its exchange, clearing house, and broker separately, as required by US securities laws.
The Timeline and the Competition
Contrary to Belshe’s comments, some experts like the Former BlackRock managing director Steven Schoenfield at a conference in London last month, have predicted that the SEC may approve a Bitcoin ETF within the next three to six months.
According to Schoelfield, the SEC is bound to approve these applications, because it went as far as requesting public comments.
Belshe, on the other hand, is not optimistic about this timeline and says that the market structure issue may take longer to resolve.
Another issue that may arise with these ETF applications is that non-web3 giants like Blackrock and Valkyrie may have a hard time competing with “crypto-native” companies.
Belshe maintains that crypto-native companies have more experience and expertise in the crypto market, and will be able to offer better ETF services to investors.
In all, Belshe maintains that the first Bitcoin ETF approval will be a historic moment for the crypto industry and that he hopes to see it happen soon.
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