Good day everyone,
I hope you are all well and had an excellent week, welcome to CryptoGod-1’s blog on all things crypto. In this post I will be looking at the recent comments from the non-profit Better Markets, which are warning of financial instability following the approval of Bitcoin Spot ETF's.
Better Markets
A non-profit organization known as 'Better Markets' and endorsed by Elizabeth Warren, who advocate for financial reform along with more stringent financial regulations, have come out in strong defiance against the newly-approved spot Bitcoin ETFs. Late on Wednesday the 10th of January 2023 the Securities and Exchange Commission announced the approval on 11 Bitcoin Spot ETF applications, and the same day Better Markets published a statement on their website.
The statement, by the organisations CEO Dennis Kelleher, blasted the SEC’s decision to approve the Bitcoin Spot ETF's. He noted that the SEC’s actions will not change anything about what he called “this worthless financial product.”
He began the statement by claiming that the SEC has come to the rescue of the cryptocurrency industry with the approval of the Bitcoin Spot ETF's. This is based on his claims that the crypto industry has been crashing and burning prior to the announcement, even though last I checked Bitcoin had been trading above $43,000 before the approval announcement. While it was below its all-time high, by roughly a third or so, it is not so different to many stocks currently trading on the market. He noted it is nothing more than a fraud-filled financial product similar to buying chips in a casino and will not be regulated by the SEC, as can be seen in his opening paragraph below:
“With the flagrantly lawless crypto industry crashing and burning due to a mountain of arrests, criminal convictions, bankruptcies, lawsuits, scandals, massive losses, and millions of investor and customer victims, who would have thought that the SEC would come to its rescue by approving a trusted and familiar investment vehicle that will enable the mass marketing of a known worthless, volatile, and fraud-filled financial product to Main Street Americans. Bitcoin and crypto are worse than the chips you can buy at a casino because at least the casino is regulated; the spot Bitcoin market is not and that’s what the ETF is going to be pricing. There will be no SEC regulation or policing of Bitcoin."
From there Kelleher continued by noting that Bitcoin and crypto still have “no legitimate use” and they are the go to choice of product for speculators and gamblers, along with predators and criminals. He noted how the assets is not required or supported by the law (in his opinion) and was not required for the Greyscale court decision. He notes that this is a historic mistake by the SEC and will 'unleash' crypto predators on the masses of investors while targeting venerable people such as retirees.
“Make no mistake about it: the SEC’s actions today are not required by or supported by the facts or law, including not required by the Grayscale court decision, as we spelled out in our comment letters here and here. The court in Grayscale merely said that the SEC failed to sufficiently explain its prior rejection. The SEC could — and should have — rejected the ETF applications and better detailed why it did so, importantly including a showing that “as much as 77.5% of the total trading volume on unregulated exchanges was due to wash trading” and as much as 95% of Bitcoin trading “could be due to wash trading.
That’s why this approval of a Bitcoin ETF is an historic mistake that will not only unleash crypto predators on tens of millions of investors and retirees but will also likely undermine financial stability. It will be interpreted and spun as a de facto SEC – if not U.S. government – endorsement of crypto generally. The crypto industry’s marketing machinery can be expected to claim or imply that this decision legitimizes crypto as a safe and appropriate investment for hardworking Main Street retail investors and those saving for retirement. However, the SEC’s action today has changed nothing about this worthless financial product: Bitcoin and crypto still have no legitimate use; remain the preferred product of speculators, gamblers, predators, and criminals; and continue to be cesspools of fraud, manipulation, and criminality."
He went on to state that as a result of the SEC's decision American investors will believe there are at the very least four levels of security and 'false comfort' associated with investing in Bitcoin. These four levels include a trusted ETF investment vehicle, the involvement of trusted financial firms such as Blackrock and Fidelity, and a belief that Bitcoin ETFs will be regulated with investors in mind.
“As a result of the SEC’s action, America’s investors will have at least four levels of false comfort: first, the SEC’s imprimatur; second, a well-known, trusted ETF investment vehicle; third, the involvement and legitimacy of traditional and trusted financial firms like Blackrock and Fidelity; and fourth, a belief that there will be meaningful regulation and investor protections."
To conclude his statement Kelleher expressed his concern that there will be no policing of Bitcoin. He stated that the CTFC has been nothing more than a biased cheerleader of cryptocurrency and not doing its job as an independent financial regulator. He mentioned Sam Bankman-Fried (SBF) meeting with officials from the CTFC numerous time, accord to the chairman of the CTFC, Rostin Behnam. Kelleher feels those meetings focused one expanding the cryptocurrency market instead of imposing regulations, and of course SBF's exchange FTX went into bankruptcy and owes $8 billion in customer funds to its creditors. His final concern was that cryptocurrency would become intertwined with traditional financial and banking systems, which will apparently increase the risk of crashes and bailouts.
“The truth is there is and will be no effective cop on the Bitcoin beat. The CFTC is supposed to be the cop on that beat, but CFTC Chair Behnam has been little more than a biased crypto cheerleader rather than an independent financial regulator. While meeting with FTX’s CEO Sam Bankman-Fried 10 times in just 14 months, Behnam prioritized expanding the crypto market and his agency’s jurisdiction over the protection of the public. He was a “key ally” to FTX and Sam Bankman-Fried and worked to deliver them regulatory and legislative victories. Even after FTX went bankrupt and $8 billion of customer funds were reportedly missing, he continued to push their top legislative priority in giving crypto jurisdiction to the smallest, least funded, and most easily capturable agency. However, even if the CFTC had a Chair that wanted to be a cop on the beat, the CFTC cannot be one because it has been and continues to be chronically and grossly underfunded.[1]
“Another highly consequential result of this decision will be that crypto gets more interconnected with the core of the traditional financial and banking systems, which will dramatically increase the risk of systemic crashes and bailouts. That’s why this decision is similar to the decision to deregulate derivatives in 2000, which led in just a few years to the catastrophic financial crash in 2008. History may well see this action as lighting the fuse of a crypto boom and what will almost certainly lead to a crypto bust with likely crashes, contagion and worse.”
Better Markets was founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets and to help ensure the support of financial reform on Wall Street. According to their mission statement, the independent organization is there to 'help' make the financial system work for all Americans again. They claim to work alongside allies, including many in finance, to promote pro-market, pro-business and pro-growth policies. In other words, they are in bed with the banks and co and are against anything that could disrupt the monopoly created by the financial institutions of the world. Last I check Kelleher crypto did not exist in 2008 when the great recession occurred thanks to the financial mismanagement of these so called allies of Better Markets.
I am not say that everybody in crypto is a saint, but I am very clear with the fact that the likes of SBF do not stand for everybody in crypto. Using that analogy, it is easy to mimic Kelleher's point of view and say every financial institution is a bad actor due to the actions of some of them in the past. No offence to him, but considering the count Senator Elizabeth Warren as a supporter and ally, it is VERY DIFFICULT to take them seriously.
Dennis Kelleher - CEO of Better Markets
It is not just following the approval of the Bitcoin Spot ETF's that Better Markets started voicing their concerns. They wrote a public letter to the SEC back on the 5th of January 2024 pleading for them to reject the Bitcoin Spot ETF applications. Within they argued that the Bitcoin Spot ETFs would increase the potential risk of fraud, and would also enable the crypto industry to claim that its products are now U.S. government-approved.
Even Senator Elizabeth Warren could not hide her dismay at the approval of the Bitcoin Spot ETF, taking to social media to outline how she feels the SEC have made the wrong decision. She feels, similar to what was noted by Dennis Kelleher, that the SEC is letting crypto further and further into the established financial system and that her anti-money laundering bill is the only way to save us from the evils of crypto. Lol.
While I can understand a financial organisation such as Better Markets wanting to be clear in their viewpoint on Bitcoin, Cryptocurrency, and the approval of Bitcoin Spot ETF's, I also find it hilarious how they approach the subject. Similar to the CEO of JP Morgan, Jamie Dimon, calling for the United States Government to 'close it down,' it is just amusing how little they understand cryptocurrency. It is not something that can just be made illegal or shut down, as it is NOT an American product. It is a GLOBAL product, and the sooner the United States begins to understand they cannot just start a physical war and drop bombs to try eradicate cryptocurrency. It is so, so much bigger than that!
Have a great day.
Peace. CryptoGod-1.
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