Alex Krüger Affirms NY Attorney General’s Crypto Exchange Report Hurts Chances of Bitcoin ETF
Alex Krüger, a prominent economist and trader, has affirmed on Twitter that the recent report made by the New York attorney general regarding cryptocurrency exchanges is very bad for the crypto world.
According to him, as the report states that the exchanges are not taking serious steps to stop manipulative trading and they do not offer protection for customer funds (or only offer “illusory” protection), also having many conflicts of interest, the odds of the Bitcoin ETF approval in 2018 are, indeed, very low.
New York attorney general’s report on crypto exchanges:
– Exchanges haven’t taken serious steps to stop manipulative trading.
– Pervasive conflicts of interest among exchanges.
– Protections for consumer funds, “are often illusory.”
=> Odds of bitcoin ETF approval in 2018 = 0. https://t.co/Eek1rdwCv8
— Alex Krüger (@krugermacro) September 18, 2018
Zero Odds For Bitcoin ETF Approval
Barbara D. Underwood, from the New York attorney general’s office, has recently affirmed in a new report that the existing crypto exchanges are not very trustworthy when compared to the traditional venues for investment.
According to her, digital currency exchanges have serious conflicts of interest between their companies and the crypto market and they have a clear lack of effort to stop abusive trading on their platforms. Also, they have been accusing of lacking protection for investors and only offering “illusory” protection for the customers.
The Attorney General has explained that many platforms focused on virtual currency trading lack the necessary procedures and policies to ensure that they are environments of fairness, integrity and security for the investors. The platforms clearly cater to professional investors and automated traders and retail customers are at a clear disadvantage when trading at these platforms.
It was based on these reports that the economist Alex Kruger has affirmed that the chances of a bitcoin ETF are very slim right now and may be practically non-existent for 2018. One of the main points of Kruger is that the exchanges are simply full of pervasive conflicts of interest and that the report is accurate in affirming that, which would certainly make the existence of the ETF more difficult.
Is There A Future For The Bitcoin ETF?
Until this moment, the U. S. Securities and Exchange Commission (SEC) has been rather negative on Bitcoin ETFs. None of them were able to sparkle the interest of the SEC and there are 9 rejections so far and counting.
Companies like ProShares, Direxion and GrainteShares have already tried and failed to score the Bitcoin ETF. Another ETF proposal that was turned down by the courts was the Winklevoss’ twins Bitcoin Trust Fund.
However, some more positive signals have appeared on the market as Hester Peirce has stated later that there is no reason for the Bitcoin ETF not to go ahead. It was also stated that the reports show that there is a need for the SEC to intervene in the market, as nothing is going to change while the regulators are still outside of reach.
Peirce has stated that there are many benefits for institutionalizing the Bitcoin market and that the SEC will have to choose to either create the space for innovation to occur in regulated markets or to simply let the market go on as unregulated and try to go against it, which would also be against innovation.
Despite the recent Bitcoin ETF rejections, the whole market is considerably interested in the next ETF that will be judged by the SEC. This ETF is the CBOE-backed VanEck/SolidX proposal, whose decision was delayed by the SEC, which means that there is a chance this time that the organization is considering to approve it.
However, the final deadline for approval is March 2019, so there are some considerable chances that the ETF decision will simply be pushed forward until this month and nobody knows what will happen then.
Jake Chervisnky, a legal expert, has affirmed that the SEC will very probably delay the decision until March 4, 2019, as this is one of the most solid proposals so far and the SEC will want to make a fully informed decision before deciding how it should move with the proposal.
Another point that should be taken into account is that the new SEC commissioner, Elad Roisman, which was appointed by President Donald Trump, may boost the changes for the ETF approval as he has already stated that he prefers fair regulatory treatment for cryptos than banning them.