Bitcoin ETFs are wrapped in ‘thin layer’ of indirect regulations — CFTC chair
Jan 26. 2024
By Ciaran Lyons
The chair of the Commodities Futures and Trading Commission (CFTC), Rostin Behnam, believes there is a risk of the recent approval of spot Bitcoin exchange-traded funds (ETFs) to be misinterpreted as firm regulations in place for Bitcoin (BTC🔺$41,841) and other cryptocurrencies in general.
In a keynote speech on Jan. 26, Behnam clarified there is a potential for retail and institutional investors to misunderstand the legal certainty for spot Bitcoin ETFs, following the United States Securities and Exchange Commission's (SEC) decision to approve 11 applications on January 10.
While the approval now allows investors to expose themselves to Bitcoin without directly holding the asset itself, supervised by an SEC-regulated stock exchange, he argued there is no regulatory oversight for the cash market of digital assets, such as a crypto exchange.
“There remains nothing firmly in place to address the opaque and inconsistent practices in the cash markets for digital assets.”
Furthermore, Behnam explains that this has repercussions for the transparency of Bitcoin ETFs, since asset management firms acquire the underlying assets for the ETF from the cash market.
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