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June 30, 2022

Better Markets Applauds SEC Prioritizing Investor Protection in Rejecting a Crypto ETF Due to Susceptibility to Fraud and Manipulative Practices

WASHINGTON, D.C.— Dennis M. Kelleher, President and CEO, issued the following statement in response to the Securities and Exchange Commission’s (SEC) rejection of a crypto exchange traded fund (ETF):

“The SEC’s overriding mission is to protect investors and that could not be more important than now after more than $2 trillion have been lost in crypto investments during just the last several months.  Bitcoin itself has crashed from almost $70,000 last November to less than $20,000 recently.  Compounding that volatility and those losses are reports of widespread fraud and manipulative practices, including a 2021 White Paper estimating that up to 90% of the trading volume in cryptocurrencies could be subject to manipulation.

“While the current crypto-crash, carnage, and seeming death spiral may not kill the product, investors are nonetheless suffering enormous losses and the SEC must act very, very cautiously before unleashing yet another vehicle for investors to lose money.  The argument that the SEC is required to mindlessly approve this ETF application because of some claimed similar past actions ignores material differences as well as additional information about the product’s performance and market-related information.  That’s what the SEC is required to consider and it is not arbitrary or capricious as Grayscale claims.”

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.

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