BlackRock, the world’s largest asset manager and a frontrunner in the Bitcoin exchange-traded fund (ETF) race, has voiced concerns regarding the potential classification of Bitcoin as a security by the U.S. Securities and Exchange Commission (SEC).
In an update to its ETF filing, BlackRock emphasized potential challenges if regulators deemed Bitcoin a security. The firm warned that such a classification might hinder or prevent the digital asset from being traded, cleared, or custodied in the United States through channels used by non-security digital assets.
Moreover, BlackRock emphasized the adverse impact such a regulatory move could have on the value of Bitcoin. The firm warned that if the SEC or a state securities regulator takes enforcement action or a court deems bitcoin a security. It would significantly harm both the trading value of bitcoin and the shares of the spot bitcoin ETF. In such scenarios, the firm anticipates that immediate material adverse impacts will occur
Drawing attention to the SEC’s legal action against Ripple, BlackRock pointed out the significant impact on the trading value of XRP. Before the SEC’s complaint, XRP’s market capitalization exceeded $100 billion but plummeted to less than $10 billion in the weeks following the regulatory action.
SEC’s Bitcoin Concerns: BlackRock, Ripple, Industry on Alert
Amidst growing speculation, concerns arise that the SEC might classify Bitcoin as a security. This worry is heightened, particularly as discussions surrounding a Bitcoin ETF gain prominence. The crypto community is eagerly anticipating a potential approval by January 2024.
BlackRock’s apprehensions echo the sentiments of Ripple executives, who have previously lamented the SEC’s impact on their business. Ripple faced setbacks, losing partnerships within the U.S. and internationally, and a significant drop in XRP’s price. Bitcoin and Ethereum currently escape classification as securities, but the exclusion hasn’t gone unnoticed. This is particularly notable as the SEC intensifies scrutiny on other crypto networks.
Furthermore, Charles Hoskinson, the visionary founder of Cardano, has joined the chorus of discontent with the SEC’s handling of Bitcoin and Ethereum. His frustration emphasizes the industry’s heightened vigilance amid the evolving landscape of regulatory dynamics.
— Altcoin Daily (@AltcoinDailyio) November 27, 2023
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