The former chief of internet enforcement at the SEC has warned that spot bitcoin exchange-traded funds (ETFs) “will create yet another Wall Street fee-sucking investor scam of epic proportions.” Furthermore, he emphasized that it will most likely be the most centralized crypto contraption imaginable.

SEC Official Issues Bitcoin ETF Warnings

In a post on social networking site X on Monday, former SEC official John Reed Stark issued some warnings concerning spot bitcoin exchange-traded funds (ETFs). Stark presently serves as the president of the cybersecurity firm John Reed Stark Consulting. For 11 years, he developed and led the SEC’s Office of Internet Enforcement. He also worked as an SEC enforcement attorney for 15 years.

Stark expressed his doubts about spot bitcoin ETFs, writing, “As to whether the approval of a spot bitcoin ETF is a good thing, my view is that it is not.” He issued a warning:

A bitcoin spot ETF remains a hilarious concept, not just because it will produce yet another Wall Street fee-sucking investor swindle of gigantic proportions, but also because it is possibly the most ‘centralized’ crypto contraption imaginable.

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The Securities and Exchange Commission is currently considering 13 applications for spot bitcoin ETFs. Last week, the regulator allegedly met with numerous applicants and gave them until the end of the week to file modifications to their spot bitcoin ETF registrations.

Citing reports of many meetings between SEC officials and spot bitcoin ETF issuers, as well as conversations about the cash production process, Stark stated last week that “the SEC’s approval of some iteration of some kind of bitcoin spot ETF seems likely.” According to the former SEC internet enforcement chief:

I just can’t get over the possibility that the approval of a Bitcoin spot ETF will become a major talking point in SEC Chair Gary Gensler’s legacy. This, like most of the crypto-verse, appears to be upside down. Gary, say it ain’t so.

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