Jeremy Schwartz, Global Chief Investment Officer at WisdomTree, commented on cryptocurrency spot exchange-traded funds (ETFs) on June 26.
Surveillance agreements could make SEC “comfortable”
During a CNBC interview, Schwartz said:
“One of the things that recent [spot Bitcoin ETF] filings have in common … is that they are trying to have data sharing surveillance agreements between exchanges to help make the SEC comfortable with [the question of] price manipulation.”
The U.S. Securities and Exchange Commission (SEC) has rejected all spot cryptocurrency ETFs to date. However, the agency approved crypto futures ETFs starting in late 2021 beginning with ProShares’ offering, which went live on Oct. 19 that year.
Schwartz noted the SEC began to approve futures ETFs in spite of the fact the futures market is based on spot prices. He suggested that the agency approved those ETFs in part because the futures market shares information with the SEC.
He went on to say that data sharing surveillance agreements “could be one of the key points” that the SEC considers in approving spot Bitcoin ETF applications.
WisdomTree has submitted an ETF application
WisdomTree submitted a new application for a spot Bitcoin ETF on June 20. It submitted that filing alongside similar applications from other firms including Bitwise, Valkyrie Investments, Invesco — and BlackRock, which set off the trend.
Schwartz reiterated that WisdomTree’s application turns on whether it can work with the SEC to make it “comfortable” with the proposed price surveillance.
When asked about broader concerns around fraud and lack of regulation, Schwartz noted that the SEC chair Gary Gensler wants “more official regulation.” He noted that Gensler and his agency have taken action against cryptocurrencies they consider securities, but that they have treated Bitcoin as a commodity rather than a security.
He further suggested that data sharing surveillance agreements could help the SEC overcome each of its concerns one at a time.
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