Bitcoin ETF Rejections Expected to Continue, Says BitGo’s Mike Belshe

Key Points:

• BitGo’s Mike Belshe raises concerns about the potential for Bitcoin ETF rejections due to the lack of separation between exchanges and custody.
• The SEC may reject several spot Bitcoin ETF applications due to this issue, highlighting the regulatory hurdles that Bitcoin ETF applications continue to face.
• The SEC’s focus on investor protection and market integrity suggests that a more stringent approach to Bitcoin ETF approvals is likely, potentially leading to further rejections.

The approval of spot Bitcoin exchange-traded funds (ETFs) remains uncertain, with BitGo’s Mike Belshe expressing concerns about potential Bitcoin ETF rejections.

Bitcoin ETF Rejections Looming as SEC Scrutinizes Custody Concerns

In a recent interview with Bloomberg, Belshe suggested that the U.S. Securities and Exchange Commission (SEC) may reject several spot Bitcoin ETF applications due to the lack of separation between exchanges and custody. The SEC may insist on a full separation of these aspects before moving forward, highlighting the regulatory hurdles that Bitcoin ETF applications continue to face.

This issue is particularly relevant given that Coinbase, which has been selected as a custody partner by multiple applicants, has faced its own regulatory scrutiny. Belshe emphasized the importance of addressing the risks associated with Coinbase, stating that they need to fully understand the risks associated with Coinbase before we can move forward with these Bitcoin ETF applications. He cautioned against rushing into approvals, suggesting that the SEC should take a more cautious approach to ensure that investors are adequately protected.

BitGo’s Belshe Warns of Potential Bitcoin ETF Rejections Amid Regulatory Scrutiny

Despite the industry’s overall optimism surrounding Bitcoin ETFs, Belshe believes that the SEC is likely to reject several current applications due to this particular issue. This sentiment aligns with the SEC’s previous actions regarding Bitcoin ETF applications.

While some ETF analysts have expressed a 90% likelihood of an ETF being approved in January, the SEC has previously rejected numerous applications, citing concerns about potential market manipulation and insufficient customer protection. Belshe’s comments underscore the challenges that Bitcoin ETF proponents face in obtaining regulatory approval. The SEC’s focus on investor protection and market integrity suggests that a more stringent approach to Bitcoin ETF approvals is likely, potentially leading to further rejections.

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