The SEC’s Crypto Market Control Worries Make No Sense
I’m lacking patience with the Securities and Exchange Commission (SEC). And you ought to be too.
The SEC has been refusing to authorize a bitcoin exchange-traded fund (ETF) for years due to the fact that it fears the bitcoin market can be manipulated. And VanEck, a highly respected investment company that has produced dozens of ETFs currently managed by the SEC, just withdrew its great bitcoin ETF proposition because it became clear the SEC isn’t prepared to authorize it.
The fear is ridiculous. Every market can be, and is, controlled on some level.
You want evidence? Look no more than today’s news that the Department of Justice (DOJ) charged three J.P. Morgan traders(two existing, one previous) with manipulating the precious metals market (gold, silver, platinum, and so on).
2 of the three individuals charged are J.P. Morgan executives! The alleged market control occurred over the span of eight years. And individuals who supposedly did the manipulating made countless dollars.
According to the DOJ, the accused “spoofed” the rare-earth elements markets to control costs and to produce profit chances. Spoofing is positioning orders so it appears like there’s market activity and after that canceling the orders prior to they’re performed. The phony activity tricks other traders into purchasing or offering when they typically wouldn’t. And when the trades are canceled, the market manipulators swoop in to benefit from the traders who acted upon the bogus details.
Spoofing is among the chief concerns the SEC has with bitcoin and other cryptocurrencies. However you don’t see anyone attempting to stop the trading of rare-earth elements. So why is the SEC standing in the way of crypto trading?
Refusing to authorize a bitcoin ETF or concern crypto policies is intellectually deceitful. The very same problems that the crypto markets face exist in other regulated markets. But due to the fact that crypto is the brand-new kid on the block, the SEC feels comfortable ignoring that.
I’m not against guidelines. I’ve spent more than a years operating in highly managed industries. I’m friends with some previous regulators. I met at least a few of them when they were active. And the factor I’m friends with them is they’re smart, sharp and capable problem solvers.
These regulators didn’t try to find methods to stop development. Rather, they sought to develop frameworks that enabled business owners to make things occur. I always valued that.
So when I believe about guidelines, I don’t immediately oppose them. And when I think of regulators, I don’t instantly believe they’re obstructionist. I respect my good friends excessive for that.
But as a guideline, I do firmly insist on smart guidelines and wise approaches to solving problems. Excellent regulations and regulators should become part of why an extremely controlled market succeeds.
Unfortunately, the SEC does not share my vision. Rather of welcoming change and new technology, it’s claiming that crypto isn’t all set for prime-time television since the marketplace can be controlled.
That description never made sense. And after the indictments of these 3 J.P. Morgan traders ( and the August guilty plea of a 4th trader), that description is smelling quite rotten.