Anticipation among global asset managers for spot Bitcoin ETF approval is fervent, but BitGo CEO Mike Belshe harbors reservations. Belshe questions the likelihood of the US Securities and Exchange Commission (SEC) greenlighting spot Bitcoin ETF applications, citing concerns about Coinbase’s dual role as both an exchange and custodian.
BitGo CEO Skeptical of SEC Approval for Spot Bitcoin
In a recent Bloomberg interview, Belshe voiced his optimism but hinted at the potential necessity for another round of rejections. He believes this may be required to address market structure concerns. This echoes SEC Chairman Gary Gensler’s emphasis on separating exchanges from custody, akin to the equity market’s operation.
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BitGo CEO: Coinbase can jeopardize Bitcoin ETF applications’ approval. The anticipation surrounding the approval of Bitcoin exchange-traded funds (ETFs) has reached a fever pitch. Market participants are eagerly await… check us out @… pic.twitter.com/hwWZvbO4nN
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Belshe emphasizes Coinbase’s multifaceted role, acting as an exchange, custodian, and broker-dealer simultaneously. While acknowledging differences between FTX and Sam Bankman-Fried, Belshe contends Coinbase employs a “similar playbook.” He suggests the SEC might demand a complete separation of these functions before approving Bitcoin ETFs.
Despite Belshe’s concerns, he points to viable solutions, advocating for custodians like BitGo, specializing in custody services without engaging in exchange or trading activities. Belshe asserts that utilizing such custodians can address the imperative need for separation between exchanges and custody, potentially paving the way for SEC approval of Bitcoin spot ETFs.
As excitement surrounding Bitcoin spot ETFs continues to escalate, Belshe’s concerns inject a layer of complexity into ongoing discussions. He suggests the SEC may reject applications until there is a distinct separation of Coinbase’s functions. The industry, eagerly awaiting regulatory decisions, grapples with the intricacies of Coinbase’s role in the Bitcoin spot ETF landscape.
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