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SEC Decisions on Spot-ETFs Questioned while Huobi Withdraws from Singapore- Regulations Weekly




SEC Actions Questioned

Prior to the approval of a futures-based Bitcoin ETF, the SEC and its strict stance towards such products was understandable to an extent – the regulator wanted to protect investors from the volatility and manipulation of a nascent industry.  Now that various futures based ETFs have been approved, the continued denial of BTC spot-ETFs has been called in to question.  Why approve one product, and not the other?

This was recently highlighted by multiple Congressmen, as the decisions of the SEC were called into question in a letter addressed to SEC Chairman Gary Gensler.

Congressmen Darren Soto and Tom Emmer state,

“We question why, if you are comfortable allowing trading in an ETF based on derivatives contracts, you are not equally or more comfortable allowing trading to commence in ETFs based on spot Bitcoin. Bitcoin spot ETFs are based directly on the asset, which inherently provides more protection for investors…Since the SEC no longer has concerns with Bitcoin futures ETFs (given trading has begun for these products), then it presumably has changed its view about the underlying spot Bitcoin market because Bitcoin futures are, by definition, a derivative of the underlying Bitcoin spot market. For this reason, whether one, both, or none of these requirements has been met, the SEC Tom Emmer Member of Congress Darren Soto Member of Congress should no longer have concerns with Bitcoin spot ETFs and should show a similar willingness to permit the trading of Bitcoin spot ETFs.”

With demand for a BTC spot-ETF higher than ever, a successful roll-out of futures ETFs, and decisions being questioned by Congress, a continued denial by the SEC is increasingly hard to justify.

With that being said, one may come sooner than most think, with a final decision due in mere days on an application by VanEck.

Exchange Activity

As global regulators continue reigning in the digital assets sector, exchanges must come to grips with a new landscape.  This evolution has seen various exchanges withdraw from certain regions in search of more friendly governments.  The following are two examples of this shift from the past few days.

Huobi Withdraws

While most of the attention surrounding exchanges withdrawing from certain countries has revolved around Binance, it is by no means the only example of this – Huobi in particular is another.  In a recently released statement, Huobi has announced that it is withdrawing from Singapore, requiring all users based in the country to withdraw their assets by March 21, 2022.

Bullish Granted License

On the other hand, Block.One has recently announced that its soon to launch exchange known as ‘Bullish’, has successfully been granted licensure by the Gibraltar Financial Services Commission (GFSC).

Bullish Chairman Brendan Blumer commented on this development, stating,

“Securing this license signals that the Bullish exchange is a platform that institutional and retail users can trust.  It also underscores our commitment to client protection, compliance and industry-leading security ahead of launching the exchange, and continues our progress towards going live.  We believe Gibraltar’s commitment to a regulatory framework that fosters collaboration has spurred our industry forward and will enable wider adoption of digital assets.”