What More Crypto Oversight Should Look Like
(Bloomberg Opinion) -- In his first major speech on cryptocurrencies, U.S. Securities and Exchange Commission Chair Gary Gensler signaled a pathway for approving a Bitcoin exchange-traded fund. Although Bloomberg News reports that such a move would help bring the tokens into the mainstream, the SEC has been slow to act. The agency wants to make sure investors would be adequately protected before approving any of the at least half a dozen Bitcoin ETF applications. “We just don’t have enough investor protection in crypto,” Gensler said in remarks prepared for the Aspec Security Forum. “It’s more like the Wild West.”
Here’s what Bloomberg Opinion columnists an contributors have been saying about cryptocurrencies, regulations and the need to protect investors:
How a Bitcoin ETF Would Protect Crypto Investors
“The Securities and Exchange Commission faces an important decision about cryptocurrency: Whether to approve a Bitcoin exchange-traded fund. Although it would be best to see such ETFs approved only after Congress has strengthened crypto regulation generally, the likelihood of that happening in the near future is low. The next best thing, then, is for the SEC to approve an ETF conditionally in a way that would enhance transparency and integrity in the industry.” — Timothy Massad
Bitcoin Is Tipping Scales in Favor of a U.S. ETF
“The SEC has agonized for years about whether to allow them, and the answer so far is no. The securities regulator has a long list of concerns that includes insufficient liquidity, enabling criminal financing, hacking, price manipulation and funds’ ability to validate ownership and value their coins. There’s also the ever-present worry about investor protection, in this case that Bitcoin’s wild swings will maul investors. Those are all legitimate concerns, but delaying the inevitable — yes, Bitcoin ETFs are coming — has only made things more complicated.” — Nir Kaissar
How to Keep Crypto From Crashing the Financial System
“Once upon a time, the realm of cryptocurrencies was a curious sideshow, a place where criminals did business and enthusiasts dabbled at their own peril. Not anymore. It’s rapidly evolving into a veritable Westworld of finance, where glitchy simulacra of investment funds, banks and derivatives allow visitors to take on immense risks — risks that could ultimately spill over into traditional markets and the broader economy.
Regulators have been struggling to get a grip on all this. It’s increasingly important that they succeed, and soon.” — Editorial
The Hidden Risk Beneath Crypto's UnFunnyNotMoney
“One reassuring aspect of the rollercoaster ride that saw Bitcoin lose half its value in less than two months is the immunity of the real financial world to contagion from crypto tokens, which I increasingly think of as UnfunnyNotMoney. But there is a danger that speculators, particularly if they’re young and inexperienced, have a “once bitten, twice shy” reaction to losses that could harm their propensity to allocate cash to long-term savings. The gamification of finance is a worrying trend, and it’s not just restricted to buying and HODLing digital currencies.” — Mark Gilbert
Bitcoin in an IRA? What Could Possibly Go Wrong?
“Even the most adventurous investor would acknowledge that cryptocurrencies are risky. And that saving for retirement should be a search for a measure of safety. Yet salespeople have been blanketing potential investors with email pitches urging them to put Bitcoin and other cryptocurrencies into individual retirement accounts. They tout eye-popping gains, warn of scary inflation and highlight endorsements to help legitimize the asset.” — Alexis Leondis
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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