SEC: absolutely fine with penny stocks with 1000% daily fluctuations
SEC: derivatives of a trillion dollar asset are risky
This is all a theater. The real reason is they are trying to slow down the proliferation of cryptocurrencies.
SEC: derivatives of a trillion dollar asset are risky
This is all a theater. The real reason is they are trying to slow down the proliferation of cryptocurrencies.
Poorly regulated derivatives were what caused the last financial crisis.
UK is taking a bit of action: https://edition.cnn.com/2021/12/22/football/arsenal-socios-a...
https://www.fca.org.uk/publications/policy-statements/ps20-1... / https://www.fca.org.uk/publication/policy/ps20-10.pdf
"We are prohibiting the marketing, distribution and sale in or from the UK to all retail clients, of derivatives and ETNs that reference certain types of unregulated, transferable cryptoassets"
The US bans haggis, and the EU bans Mountain Dew, and few people bat an eye.
Total nontransparent markets such as the pink sheets? Fingerprinting VWAP trades by institutions and then front running them?
SEC likes to protect the status quo
You say that like there was somebody malign doing that.
>Total nontransparent markets such as the pink sheets?
Or that.
Absence of people to trade with is not something that someone is doing to you.
If you choose not to go the grocery store, but instead see if anyone is selling anything on a random street corner, whose fault is that?
Hey, sometimes there's someone with steaks they have to get rid of fast because the A/C on their truck broke.
The US stock markets are largely permissionless from the regulatory perspective. The SEC is not in place to make a judgement on the merit of an asset. But when you operate a fund, with a fund manager, that takes custody of retail assets, now they are in a gatekeeping position. Its a combination of Acts that never envisioned “ETFs” at all, let alone “digital asset commodity exchange traded products”
So the laws have to be updated to get them back out the way. The SEC itself had a comment period on this but it was largely missed.
By default, every securities transaction in the U.S. requires SEC approval [1]. There is a long list of exemptions, a list which the SEC maintains, that permit e.g. the private markets.
In this sense, the U.S. took an ersatz European regulatory approach. It is obsessively permissioned. It was a drastic response to a drastic crisis--Black Thursday and the Great Depression.
[1] https://www.govinfo.gov/content/pkg/COMPS-1884/pdf/COMPS-188...
But less vague, “approval” doesnt mean judgement was pased and gatekept, approval means that disclosures are made and investors can make their own decisions with that level of disclosure. And then there are exceptions to that where the SEC gatekeeps and likes that power
It's actually sillier than this. They think that derivatives of bitcoin are fine (futures ETF approved) while simultaneously saying bitcoin itself is too dangerous (spot ETF denied).
People say, oh oh oh, GBTC and other substitutes don't track bitcoin. Well, yeah, maybe that's nature's way of telling you that keeping actual bitcoin safe is expensive. Pay your money and take your chances.