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January 5, 2024

The SEC Must Follow the Law and Reject Spot Bitcoin ETPs Which Will Inflict Massive Investor Harm

WASHINGTON, D.C.—Dennis M. Kelleher, Co-Founder, President, and CEO, issued the following statement on the filing of Better Markets’ Supplemental Comment Letter to the Securities and Exchange Commission (SEC) in response to multiple proposed rule changes filed by national securities exchanges seeking to list and trade shares in spot bitcoin exchange-traded products (ETPs).

“The approval of spot bitcoin ETPs would be a historic mistake almost certainly leading to massive investor harm. The immense and unrelenting fraud and manipulation in the bitcoin market means that approving these products would expose millions of American investors and retirees to the very harms that the SEC exists to prevent. It would also undoubtedly lead the crypto industry to claim or imply that their products are now approved by the United States government. The crypto industry will almost certainly flood Americans with marketing propaganda suggesting that the SEC’s action legitimized crypto, giving false comfort to retail investors. The SEC must not facilitate the financial carnage that will follow if the crypto industry is allowed to repackage, add a veneer of legitimacy to, and widely disseminate a financial product that is little more than a socially worthless gambling chip.

“Denying the proposed rule changes is required under the law.  The statute clearly provides that the rules of an exchange must be designed to prevent fraudulent and manipulative acts and practices and protect investors and the public interest. The potential for fraud and manipulation in the spot bitcoin market is so great that an exchange cannot permit the listing and trading of a spot bitcoin ETP and still comply with those requirements.  Moreover, the surveillance-sharing agreements proposed by the exchanges amount to window-dressing that cannot adequately detect or address the rampant fraud and manipulation in the bitcoin market.

“As a result, it would be a profound legal error and a policy travesty for the SEC to approve the proposed rule changes. It would expose countless hardworking Americans to the risks inherent in investing in bitcoin.  Those risks have not only been obvious over the last three years but have materialized repeatedly, resulting in billions of dollars of losses.  The fact that the investment vehicle will be an ETP will not protect investors; if anything, the supposed protections related to the ETP will also provide false comfort to unsuspecting investors who fall for marketers’ claims that the SEC has approved if not endorsed the product.  The value of their investment will be subject to the same risks of fraud and manipulation in the bitcoin market as investors who hold bitcoin directly.  The SEC must not subject investors to these risks.”

You can find the full comment letter here.


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

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