SEC’s Bitcoin ETF Approval Fails to Protect Investors – Bloomberg

Even so, Gensler should’ve tried to use this opportunity to force some investor protections on the spot trading platforms. Instead of issuing blanket accelerated approvals, the SEC could’ve made approval conditional on the ETFs deriving prices from platforms that meet the standards of regulated securities exchanges, such as adequate segregation of customer assets….

It’s possible that Gensler didn’t think such a conditional approval would pass muster with the courts. And perhaps he thinks the ETF sponsors — major financial institutions including BlackRock Inc., Fidelity and Ark Investment Management LLC — have enough leverage on entities like Coinbase to push through reforms anyway. Or maybe the hope is that existing investor-protection and risk-disclosure rules will be enough to keep these markets in check.

If so, that’s a risky bet. In the meantime, despite warning about “myriad risks,” Gensler has sent investors a signal that the SEC is comfortable with a new asset class that more than doubled in value last year and that’s sure to be aggressively marketed to them as a sexy alternative to stocks and bonds and mutual funds. He could have served them better.

Source: SEC’s Bitcoin ETF Approval Fails to Protect Investors – Bloomberg