Two Democrat Senators are urging the Securities and Exchange Commission (SEC) to block any further crypto exchange-traded products (ETPs) to protect retail investors from risks associated with poor broker disclosure and thin liquidity in major cryptocurrencies.
Sen. Jack Reed (D-R.I.) and Sen. Laphonza Butler (D-CA) write that a FINRA survey disclosed that 70% of brokers’ communications with retail investors violated fair disclosure rules.
The Senators also argue that by naming bitcoin exchange-traded funds as such, the name “obfuscates important characteristics about these investments.”
“Retail investors should be made aware of how these ETPs differ from more common funds which they may have experience,” they said in the letter, writing that bitcoin is not subject to the same protections under the Investment Company Act of 1940 that ETFs which hold shares of various companies would have.
Read more here: https://www.coindesk.com/policy/2024/03/15/democrats-ask-secs-gensler-to-block-approval-of-more-crypto-etps/
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Though I am a little bit sympathetic with the concerns raised by the two Democrat senators, one thing is clear to me that there are more people in the Democratic Party who are not so friendly with the cryptocurrency industry although they received a lot of donations coming from famous players like SBF. So can we then expect that SEC will put a halt with approving more ETFs into the future and do you think this can be affecting the ETF for ETH?