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Dennis Kelleher, CEO of Better Markets, has called on the SEC to deny approval of a spot Bitcoin exchange-traded fund (ETF). The non-profit organization argues that such an approval would contradict the regulatory body’s core principles and could expose investors to significant risks, including potential fraud.
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In a letter to SEC Secretary Vanessa Countryman dated January 5, Kelleher highlighted that the SEC’s approval of a spot Bitcoin ETF could expose investors to significant risks.
“We are submitting this supplemental comment letter (which Better Markets very rarely does) because it would be a grave if not historic mistake almost certainly leading to a massive investor harm if the SEC approves the pending rule change,” Kelleher said.
Dennis Kelleher argued that the proposed product would expose investors to the risk of potential fraud and that this concern is associated with the cryptocurrency sector.
“The approval of these spot Bitcoin ETPs would not only expose investors to a market thoroughly contaminated with fraud and manipulation,” he said.
Kelleher also argued that it would allow the cryptocurrency industry to claim that its products are now approved by the U.S. government.
However, leading cryptocurrency commentators have dismissed the letter, with Bloomberg ETF analyst James Seyffart criticizing it on social media.
In a post on Twitter, Seyffart reiterated the significant efforts that asset management firms have made to improve their practices.
“Given the amount of time, effort, and energy that all of these issuers AND SEC staff have put into this over the past few months, this happening would be an absolute criminal act,” Seyffart said.