ETF applicants don’t fit the SEC’s mould of a trusted company
The chief executive of a cryptocurrency payments start up has said the US markets regulator has refused listings for crypto exchange-traded funds because the applicants don’t fit the bill.
Bill Barhydt, CEO of Abra told CNBC’s The Coin Rush programme that the Securities and Exchange Commission (SEC) refused ETF applications because “people who are doing the applications don’t fit the mould of who the SEC is used to approving”.
Have you got the look?
He added that in order to receive approval, applicants must “look, feel and smell” the way the SEC expects a market participant to behave.
Rather than talking about particular personalities, such as the Winklevoss twins who had two bitcoin ETF applications refused in July, Barhydt was referring to the type of organisations, suggesting that a noted and trusted institution would have a better chance of approval than an untested start up.
The SEC rejected applications for a further nine crypto-related ETFs last month. The regulator says that investment firms have not done enough to protect investors from scams and other fraudulent activity in the underlying market.
Approvals to come in next year
However, Barhydt believes the SEC cannot possibly continue to reject crypto ETF proposals forever. “It’s going to happen in the next year, I would actually make a bet on it. There is too much demand for it,” he said.
He added that this will open the floodgates for entrepreneurs “who are also operating safely and soundly – but don’t necessarily fit the mould of what the SEC wants”.