Cameron Winklevoss Blames SEC for Pushing Investors Toward the ‘Toxic’ Grayscale Bitcoin Trust

Cameron Winklevoss – Co-Founder and President of crypto exchange Gemini – claimed the US SEC’s refusal to greenlight a Spot Bitcoin exchange-traded fund (ETF) has significantly harmed investors.

He believes the lack of such a product has caused consumers to deal with the Grayscale Bitcoin Trust (GBTC), which “trades at a massive discount to NAV and charges astronomical fees.” 

SEC’ Refusal: ‘Utter Disaster’ for American Investors

Winklevoss criticized the securities regulator for its rejection spree on the launch of Spot BTC ETFs in the USA. Gemini is one of the companies with aspirations to introduce such a fund, initially filing with the watchdog a decade ago.

“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.”

According to Gemini’s President, not allowing a Spot BTC ETF has given Americans fewer bitcoin investment options, described as “the best-performing asset of the last decade.” Winklevoss recently argued that investors have already started accumulating BTC en masse, labeling it “the most obvious and best trade” of the next ten years.

SEC’s refusal has also pushed consumers towards “toxic products” like the Grayscale Bitcoin Trust and “into the arms of FTX,” Winklevoss maintained. 

Gemini has had a spat with the now-bankrupt crypto lender Genesis (which is under the umbrella of Digital Currency Group (DCG)), claiming it owes customers of the exchange around $900 million. The two parties previously joined forces to provide clients of Gemini Earn with up to 7.4% APY on their holdings. The digital asset investment manager – Grayscale – is also a subsidiary of DCG. 

Winklevoss raised hopes that the SEC will eventually come to its senses and “focus on fulfilling its mandate of investor protection, fostering fair and orderly markets, and facilitating capital formation.”

The Race So Far

The list of prominent companies that filed to launch a Spot BTC ETF in the USA has grown exponentially since BlackRock did so two weeks ago. Invesco and WisdomTree resubmitted their filings after being previously dismissed by the SEC. Fidelity Investments, Valkyrie, and VanEck followed suit shortly after.

Despite the massive urge, the Commission reportedly issued a warning against some of the filings, including those of BlackRock and Fidelity, saying they are “inadequate” and lack comprehensive details.

Firms, such as Fidelity Investments, Invesco, WisdomTree, and VanEck, supposedly took immediate action and adjusted their applications. They said that crypto exchange Coinbase will serve as a custodian of the funds and provide market surveillance.