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Valkyrie Chief Blames FTX Collapse For Delays In Bitcoin Spot ETFs Approval


Spot Bitcoin ETFs approval has been a bone of contention between US regulators and investment firms like Grayscale and Valkaryie.

While regulators’ concerns over the class of investment products remain, the firms believe BTC Spot ETFs are safe and would benefit investors.

Valkyrie’s chief investment officer has revealed the way forward with Bitcoin spot ETFs while Garyscale fights in court with the SEC to convert its Bitcoin Trust to spot ETF.

During a recent podcast episode, Steven McClurg noted that they would have obtained BTC spot ETFs approval had the FTX crisis not happened.

Why US Regulators Oppose Bitcoin Spot ETF Approval

The safety of Bitcoin spot ETFs has been the primary concern of United States regulators, who maintained a rigid stance against the investment offerings.

This BTC spot ETFs approval is the reason for the legal battle between the Securities and Exchanges Commission and Grayscale.

While their Canadian and European counterparts have accepted Bitcoin spot ETF listings, the SEC and co-regulators maintained a stiff position against it.

According to McClurg, the two main concerns of the regulators against Bitcoin spot ETFs are custody and market manipulation.

Previously, a crypto trader tweeted that Bitcoin Spot ETFs approval would dump BTC price while pumping the ETF.

The investment exec also noted that the issue of assets custody would have been an old story had FTX not collapsed.

According to McClurg, FTX’s bankruptcy shifted regulators’ focus from approving the products to assessing custodian safety.

The FTX crisis raised doubts among US regulators about custodians and their modus operandi.

In addition, McClurg noted that similar investment products in Canada have proven that such concerns as market manipulation are invalid.

Regarding custody, Valkaryie Investments and like companies are cooperating with regulators to clear the concerns about BTC spot ETF.

McClurg confirmed that his firm enlightened regulators about asset custody and how custodians operate.

He also noted that Valkaryie shared notes of due diligence which it did on various custodians, revealing some red flags spotted last year.

McClurg Suggests A Way Out For Interested BTC Spot Investors

According to McClurge, Valkarie spotted irregularities in some companies during its due diligence in 2022.

He listed now-bankrupt firms like Celsius, Voyager, FTX, and BlockFi among the firms in the assessment, noting why Valkaryie didn’t onboard them.

McClurg said his due diligence team spotted some red flags in these companies and concluded they were unsafe for business.

While the US remains closed against BTC spot ETF products, McClurg shared a way out for interested investors.

He stated that people in the US could invest in Canadian spot ETFs through brokerages.

He also presented hope for BTC spot ETFs approval, saying that some lawmakers, particularly in the House of Representatives, have considered it.

McClurge noted that lawmakers in the house of Reps are open to making laws that would allow the trading of Bitcoin spot ETFs.

The chief investment officer remains optimistic that Bitcoin spot ETFs will enter the market soon.

He believes they will be able to launch Bitcoin spot ETF when a more accepting administration emerges or through legislative action.

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