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According to Gemini co-founder Cameron Winklevoss, for the past decade, the US securities regulator has been forcing investors to buy “toxic” and “unregulated” crypto products.
On July 2, the Winklevoss twin criticized the U.S. Securities and Exchange Commission (SEC) for consistently ditching Bitcoin spot exchange-traded funds, noting that it has been 10 years since they first filed for their own ETF to be approved by the regulator.
“The failure of the SECGov to approve these products for a decade has been a complete and utter disaster for US investors and demonstrates just how much of a failed regulator the SEC is.”
Winklevoss argued that without an approved bitcoin ETF, U.S. investors were forced to buy “toxic products like the Grayscale Bitcoin Trust (GBTC)” that trade at a massive discount to the price of Bitcoin and charge “astronomical” fees.
Today marks 10 years since @tyler and I filed for the first spot Bitcoin ETF. The @SECGov‘s refusal to approve these products for a decade has been a complete and utter disaster for US investors and demonstrates how the SEC is a failed regulator. Here’s why:
— Cameron Winklevoss (@cameron) June 2, 2023
According to YCharts, GBTC NAV is currently discounted by 30% compared to the price of Bitcoin, and GBTC has an annual fee of 2% compared to an average of 0.40%, according to the latest research from financial company MorningStar in July 2022.
Winklevoss also believes the denial led US investors to move to “unlicensed and unregulated” offshore platforms, including FTX, which he called “one of the biggest financial scams in modern history.”
“Perhaps the SEC will reflect on its dismal reputation and, instead of exceeding its statutory authority and trying to act as the gatekeeper of economic life, will focus on fulfilling its mandate to protect investors,” he suggested.
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Winklevoss’s comments come as a host of companies have recently filed, updated or changed their bitcoin ETF applications, including BlackRock, Fidelity, WisdomTree, Invesco, Valkryie and ARK Invest.
The SEC has reportedly said that some spot ETF filings are inadequate and “lack of clarity and exhaustiveness.” The regulator asked fund managers to reapply after clarifying the wording of their documents.
Meanwhile, Gemini is in a drawn-out legal mediation with Genesis, a subsidiary of Digital Currency Group (DCG), which also owns GBTC manager Grayscale. The exchange is also in court on SEC charges.