Oct 31, 2023

Analyzing the Potential Impact of Gensler’s ‘Rugpull’ on Bitcoin ETFs

The Possibility of a “Rug-Pull” on Spot Bitcoin ETFs The thought of United States Securities and Exchange chief Gary Gensler pulling the plug on spot Bitcoin (BTC) exchange-traded funds in one “amazingly sadistic” move has lingered in the minds of Bloomberg ETF analysts James Seyffart and Eric Balchunas for weeks, if not months. ETF commentator…

Are Bitcoin ETFs headed for an epic Gensler 'rugpull'? Analysts weigh in with Shiba Crypto, Luna Classic Crypto, Skale Crypto, Optimism Crypto, Reddit Crypto, Terra Luna Crypto, Upcoming Crypto, The Block Crypto, Req Crypto, and US Crypto.
Are Bitcoin ETFs headed for one epic Gensler ‘rugpull?’ Analysts weigh in

The Possibility of a “Rug-Pull” on Spot Bitcoin ETFs

The thought of United States Securities and Exchange chief Gary Gensler pulling the plug on spot Bitcoin (BTC) exchange-traded funds in one “amazingly sadistic” move has lingered in the minds of Bloomberg ETF analysts James Seyffart and Eric Balchunas for weeks, if not months.

ETF commentator Dave Nadig recently posed the question on Twitter, asking whether Gensler may be allowing for spot Bitcoin ETF applications to pile up just to deny them all at once in a “semi-comedic rug-pull.” Seyffart admitted that it would be “absolutely epic” if Gensler were to do this.

The possibility of a “rug-pull” has caught the attention of the crypto community, with many Shiba, Luna Classic, Skale, Optimism, Reddit, Terra Luna, upcoming, The Block, REQ, and US crypto users discussing the potential implications of such a move.

Cryptocurrency ETFs and SEC Denials

Discussing the potential for a “rug pull”, Balchunas called it “amazingly sadistic” and suggested that it might lead to a “wave of lawsuits”. While both analysts believed this to be an unlikely outcome, Balchunas admitted that the SEC could still deny the application.

Recently, Gary Gensler’s thoughts on a spot Bitcoin ETF have been in the news, with a 2019 video showing him describing the SEC’s stance on spot ETF products as “inconsistent”. The SEC has a history of denying applications for spot Bitcoin ETFs, dating back to 2017.

The crypto space has seen a lot of activity lately, with projects like Shiba Crypto, Luna Classic Crypto, Skale Crypto, Optimism Crypto, Reddit Crypto, Terra Luna Crypto, Upcoming Crypto, The Block Crypto, Req Crypto, and US Crypto all making waves.

The SEC and Bitcoin ETF Products

Since Gary Gensler was appointed head of the SEC in 2021, the agency has either delayed, denied or pushed back all applications for a spot Bitcoin ETF product, citing concerns with investor protections.

In June 2022, Grayscale, a crypto asset manager, sued the Gensler-led SEC for rejecting its bid to convert its existing Bitcoin trust into a spot ETF, with a court ruling that the SEC was “arbitrary and capricious” to reject the application. The SEC did not appeal the decision.

To date, the SEC has only approved ETF applications for Bitcoin and Ether (ETH) futures products, as it claims that spot Shiba Crypto, Luna Classic Crypto, Skale Crypto, Optimism Crypto, Reddit Crypto, Terra Luna Crypto, Upcoming Crypto, The Block Crypto, Req Crypto, and US Crypto products do not have the sufficient safeguards to protect investors from market manipulation.

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