Crypto investors continue to hold strong as bitcoin appears to be about to break out again. Meanwhile, the SEC prepares its plans to try and halt innovation in its tracks and prevent investors from partaking in gains usually reserved for those who are accredited.
According to the US government website Investor.gov, the role of the SEC (Securities and Exchange Commission) is split into 3 main objectives, and the first of these is “Protect investors”.
Therefore, when the SEC makes pronouncements, it has to be careful to say how it ‘protects’ the rights and the interests of investors. This can be quite difficult, to say the least at times, as those SEC pronouncements often appear to completely contradict this main role.
It seemed rather bizarre for example, that Gensler (chair of the SEC), would grant a futures bitcoin ETF, instead of a spot ETF. It can certainly be argued that the futures ETF only serves big institutions and is definitely not something for the small retail investor.
As a bynote, this futures instrument can be used to short bitcoin, and many might say that this is the real reason it was granted, so that an element of manipulation can be introduced to the king of the cryptocurrencies.
In addition, at time of writing, the SEC has just turned down the WisdomTree bitcoin spot ETF. Jake Chervinsky, head of policy for industry lobbyist The Blockchain Association, had the following to say on the matter:
“I wonder how long before one of the spot bitcoin ETF sponsors gets sick of arguing with a brick wall & decides to sue the SEC for an APA violation. I get why nobody did this before, but the case is stronger now with futures ETFs live, and the incentive to play nice is much weaker.”
According to an article on TheStreet on Wednesday, Gensler and the former SEC chair Jay Clayton discussed crypto at the Digital Asset Compliance & Market Integrity Summit.
It would seem that they are both very worried about the prospect of crypto markets rocketing up again. However, they did actually acknowledge the potential of the “new payment technologies”, but then went into the standard authoritarian speak when highlighting the dangers of scams and fraudulent activity - noting once again that they needed to ‘protect’ investors.
Gensler talks about how the SEC will “use the enforcement tool”, in regard to exchanges, and noted how even highly regulated exchanges such as Kraken and FTX are not regulated as securities exchanges.
With so many warnings of enforcement and the SEC’s entrenched view that practically the entire crypto industry is in contravention of securities law, it puts so much of a damper on the most innovative technology since the Internet.
It’s apparent to just about anyone who has any knowledge of finance, that the traditional financial system is teetering on the brink of complete ruin. When the crash comes, it will bring all those who rely on it - countless millions - into abject poverty.
For the SEC, the supposed defender of the investor, to be trying its damndest to bring crypto down, is the ultimate contradiction. The incumbent monetary system is fully loaded against the small investor. To use the rules and regulations in this system for such an innovative and disruptive system as crypto is just plain wrong.
Bitcoin was invented as a fair system that totally levels the playing field and gives everyone a chance to store their wealth safely as sound money. Some of the cryptocurrencies that have come after Bitcoin are leaving the banks in obsoletion. A fair minded and strong individual is needed at the helm of the SEC. Given the start he has made, Gensler is most certainly not that person.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.