Politics, Not Law, Blocking Spot Bitcoin ETF Approval in U.S.September 26, 2023
Mike Belshe, the CEO of cryptocurrency exchange BitGo, recently shared his views on the absence of a spot-based Bitcoin ETF (Exchange-Traded Fund) in the United States. In an interview with Kitco News, Belshe attributed the lack of approval from the U.S. Securities and Exchange Commission (SEC) to political factors rather than legal issues.
Belshe argued that the delay in approval is not due to any legal constraints but is a result of political influence within Washington, D.C. He emphasized that the situation is complicated because the political pressure is not aligned with existing regulations or written laws. Belshe pointed out that the political landscape shifted notably after the election of President Biden. He recalled how Senator Elizabeth Warren publicly advocated for rolling back advancements in the cryptocurrency sector and urged the Biden administration to take such actions.
Senator Warren, according to Belshe, plays a significant role in shaping the SEC’s stance as well as influencing the Biden administration’s policies on cryptocurrencies. He noted that despite no changes in the laws, the rules governing cryptocurrencies have been altered due to political influence.
Belshe also stressed the importance of having “predictable and understandable” rules to sustain America’s economic competitiveness and to maintain the U.S. dollar’s position as the global reserve currency. He believes that clear and easily comprehensible regulations are essential for both Democrats and Republicans to support. Belshe stated that rule changes should only occur if there is a change in the legislative text, advocating for stability and clarity in regulation.
According to a joint press release, on September 14, BitGo and Swan Bitcoin revealed their intention to establish the United States’ first Bitcoin-only trust company, subject to regulatory approval. This joint venture aims to merge BitGo’s expertise in Bitcoin cold storage technology and regulatory compliance with Swan’s proficiency in customer onboarding, fraud prevention, and AML/KYC procedures. Mike Belshe, BitGo’s CEO, emphasized that the collaboration has been in the works for nearly a year, focusing on robust qualified custody models. He stated that the venture aims to separate exchange and custody functions, a model that has been effective in the U.S. financial industry for over a century.
Cory Klippsten, CEO of Swan, expressed that the industry has long sought a Bitcoin-only software and services stack, focusing solely on Bitcoin’s unique features. The company aims to build a dedicated Bitcoin ecosystem, separate from industry speculators, to foster innovation in custodial services.
Both companies have shown resilience in the ongoing Bitcoin bear market. BitGo recently completed a $100 million fundraising round, valuing the company at $1.75 billion. Swan, on the other hand, has experienced significant revenue growth in 2023 and anticipates a 50% increase by year-end, exceeding $75 million in annualized revenue. Additionally, Swan acquired Specter Solutions in 2022 and plans to launch Swan Vault, a retail-focused multisig custody solution, in October.
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