Navigating Challenges for Bitcoin ETF Approval

Mike Belshe, the Co-founder and CEO of BitGo, recently spoke with Bloomberg Crypto, sharing his insights on the current state and future prospects of Bitcoin Exchange-Traded Funds (ETFs) and the importance of a clear separation between custodians and exchanges in the cryptocurrency market.

Bitcoin ETFs: A Path of Challenges and Optimism

Belshe expressed a cautiously optimistic view regarding the approval of Bitcoin ETFs. While he believes that the crypto community is inching closer to this goal, he also anticipates more rejections before any positive development. His optimism is fueled by the ongoing dialogues between ETF applicants and the SEC, with BitGo actively involved in these discussions. However, Belshe emphasizes the likelihood of additional setbacks due to existing market structures.

SEC Chair Gary Gensler’s Approach and the Need for Separation

Discussing SEC Chair gary gensler gary gensler chairman at US Securities and Exchange Commision Gary Gensler is an enthusiastic leader and the current chair of the U.S. Securities and Exchange Commission (SEC). He has the extreme experience that spans wall street, government regulation, and an angel teaching about cryptocurrencies and blockchain at MIT. He announced several initiatives to enhance investor protections in the $2 trillion cryptocurrency market. He previously led the Biden-Harris transition’s federal reserve, Banking, and securities regulation agency review team. 
 
He was awarded Treasury’s highest honor, the Alexander Hamilton Award, and also was a recipient of the 2014 Frankel Fiduciary Prize. He was born on October 18, 1957, into a Jewish family, in Baltimore, Maryland. Graduated from the University of Pennsylvania, earning a Master’s degree in Business Administration. Additionally, he is also a professor at the MIT Sloan School of management. He has served in various governmental roles since the 1990s, such as the treasury department, Sarbanes-Oxley, CFTC, Swaps, Enforcement, Libor investigation, Maryland Financial Consumer Protection Commission, Securities, and Exchange Commission. 
 
Gary Gensler will probably keep on filling in as seat of the SEC until 2026, accepting his renunciation. He has expressed his desires to present crypto-related approach changes later on that include token commitments, decentralized finance, stablecoins, guardianship, exchange-traded resources, and advancing stages. A few officials as well as his kindred SEC magistrates have scrutinized Gensler for not giving adequate administrative direction on crypto, possibly prompting a standoff between Congress and the association. 
 
The SEC, CFTC, and Financial Crimes Enforcement Network handle advanced resource guidelines in the U.S., however, each with various jurisdictional cases, bringing about an interwoven methodology that crypto firms should explore to work legitimately. Whether 2022 will see a more clear way for organizations in the crypto space is questionable, yet the cosmetics of the SEC’s initiative will fundamentally change following the takeoff of chief Elad Roisman in the first month of the year. Chief Allison Lee’s term is likewise set to terminate in June 2022. Chairman stance on cryptocurrencies, Belshe highlighted the necessity to distinguish between exchanges and custodians. He drew parallels to existing structures in equity and CFTC markets, underscoring the importance of this separation for the integrity and security of the crypto market.

Coinbase: A Risky Proposition?

Belshe raised concerns about coinbase coinbase [email protected] Centralised Exchange operating both as a custodian and an exchange. He pointed out that this dual role could pose risks to investors, a sentiment that may resonate with the SEC’s current regulatory approach. The SEC’s potential insistence on a clear distinction between custody and exchange services, especially for ETF applicants using Coinbase as a custodial partner, signifies a pressing need for clarity and separation in the industry.

Also Read: Crypto Market Outlook: Decoding South Korea’s Role in Altcoin Price Rally

BitGo: Filling the Void with a Focused Approach

Addressing the void left by entities like Coinbase, Belshe suggested BitGo as a viable alternative. Unlike Coinbase, BitGo exclusively focuses on custodial services without engaging in trading or exchange operations. This specialization, according to Belshe, positions BitGo to effectively mitigate the risks associated with entities that combine custodial and exchange services, thereby enhancing investor protection and market security.

In summary, Mike Belshe’s discussion with Bloomberg Crypto sheds light on the complexities and challenges in the crypto market, particularly concerning Bitcoin ETFs and the critical need for a clear operational separation between custodians and exchanges. His insights underscore BitGo’s potential role in providing a more secure and focused approach to custodianship in the evolving cryptocurrency landscape.