Cameron Winklevoss, co-founder of cryptocurrency exchange Gemini, has issued a scathing critique of the U.S. Securities and Exchange Commission (SEC) for its persistent denial of approval for a spot Bitcoin exchange-traded fund (ETF) over the last decade.
In a recent tweet on Sunday, the prominent figure in the crypto world condemned the regulatory body, asserting that its actions have harmed U.S. investors and revealed its shortcomings as a regulator.
Winklevoss’s criticism coincides with the 10th anniversary of his initial filing for the first spot Bitcoin ETF.
Throughout the years, the SEC has consistently rejected proposals for spot Bitcoin ETFs, thereby depriving investors of an opportunity to invest in one of the most successful assets of the past decade.
Winklevoss contends that this refusal has resulted in significant negative consequences, as it has led investors to explore alternative avenues that offer suboptimal options.
He specifically points to the Grayscale Bitcoin Trust (GBTC) as a prime example.
According to Winklevoss, the SEC’s failure to approve spot Bitcoin ETFs has pushed spot Bitcoin trading offshore, diverting it to unlicensed and unregulated platforms.
This situation poses potential risks for investors who seek exposure to cryptocurrency but are compelled to operate in less secure environments.
Furthermore, Winklevoss accuses the SEC of indirectly driving investors toward FTX, a cryptocurrency exchange that was embroiled in a major financial fraud scandal.
In his view, the SEC’s inability to provide a regulated pathway for accessing Bitcoin through spot ETFs has inadvertently steered investors to less trustworthy platforms, exposing them to greater risks.
In light of these concerns, Winklevoss calls for a reevaluation of the SEC’s approach, urging the regulatory body to concentrate on its core responsibilities of safeguarding investors, promoting fair and orderly markets, and facilitating capital formation.
By doing so, the SEC could have achieved more favorable outcomes for U.S. investors.
Winklevoss’s critique follows recent statements from the SEC, which deemed ETF filings by BlackRock and others as “inadequate.”
SEC Chair Gary Gensler has expressed apprehensions about investor protection, market manipulation, and the need for robust regulatory oversight before approving such financial products.
He emphasized that investors and issuers in the crypto securities markets are entitled to the protections provided by existing securities laws.
Nevertheless, Gensler’s assertions have faced heavy criticism from industry players, who argue that he may be exceeding his mandate under U.S. securities laws.
Calls for his removal have escalated in recent weeks, with Congressman Warren Davidson, a pro-crypto advocate, introducing a bill to reform the SEC and replace its current Chair, Gary Gensler, whom he describes as “tyrannical.”