According to Reggie Brownie, better known as ‘Godfather of ETSs,’ Cryptocurrency Exchange-Traded Funds (ETFs) may be approved “no time soon,” as reported by Business Insider Thursday.
Brownie said a reliable and robust regulatory framework must be established first before regulators approve a cryptocurrency ETF. He said these while speaking at the Financial Markets Quality Conference. The event was sponsored by Georgetown University in Washington D.C.
Giving his two cents on the current state of bitcoin ETFs, Brownie said:“It’s very difficult for the [Securities and Exchange Commission (SEC)] to wrap their heads around a positive approval because there’s no data yet … the markets just aren’t here.”
Brownie’s statement echoes those made by Larry Fink when discussing BTC ETFs. Though Mr. Fink seems to be unsure about the future of ETFs, he did not rule them out. “I wouldn’t ever say – when it’s legitimate, yes,” said Fink, speaking at the New York Times DealBook Conference.
“It will ultimately have to be backed by a government. I do not see sense that any government will allow that unless they have a sense of where that money is going,”Fink said.
Fink clearly expressed concerned regarding the potential for money laundering, tax evasion and other scams as the cryptocurrency is not only anonymous but also largely unregulated.
The Securities and Exchange Commission (SEC) has been reluctant to approve applications for cryptocurrency ETFs due to similar reasons. Early this year, SEC said in an official letter that ‘investor protection issues need to be examined’ before these funds are approved.
In August this year, the regulatory body turned down applications by three different institutions seeking to launch 9 ETFs. SEC gave the same reason it delivered earlier this year when it rejected Winklevoss twins’ BTC ETF proposal, Forbes reported. SEC expressed concerns about fraud and manipulation of cryptocurrency markets.