Dennis M. Kelleher, co-founder and CEO of Better Markets, wants the U.S. Securities and Exchange Commission (SEC) to reject all applications for spot Bitcoin exchange-traded products (ETPs).
In a Jan. 5 letter to the SEC, Kelleher argued that the approval would expose millions of American investors to fraud and manipulation, which the SEC is mandated to prevent, leading to “massive investor harm.”
He expressed his fears in the context of a recent report by blockchain security firm Scam Sniffer that revealed more than 324,000 crypto users fell prey to fraud in 2023, resulting in a loss of around $295 million.
“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.”Dennis Kelleher, Better Markets CEO
Moreover, the Better Markets chief executive, who has a distinguished career in law, policy, and advocacy, posited that the law mandates the rules of exchange to prevent fraudulent and manipulative practices, which, he asserted, the crypto industry is rife with.
Kelleher also suggested that the proposed rule changes would give the crypto industry a veneer of legitimacy, which he feels it does not deserve.
In his opinion, current surveillance-sharing agreements between exchanges are merely superficial and have so far failed to address the rampant fraud and manipulation in the crypto market.
Crypto community responds to Better Markets
Reactions to Kelleher’s warnings have been largely negative, with some key figures in the crypto industry dismissing his concerns.
Bloomberg ETF analyst James Seyffart took to X, arguing that it would be a “criminal move” to dismiss the applications given the time and effort spent by issuers and SEC staff over the past months.
The analyst suggested that Kelleher’s criticism might impact the SEC’s decision, particularly given the Better Markets CEO’s alleged close relationship with SEC Chairman Gary Gensler.
Seyffart also pointed out Kelleher’s consistent skepticism of the crypto industry.
FOX News journalist Eleanor Terrett listed several of Kelleher’s past comments about the sector, including his belief that the crypto industry serves “no legitimate or socially useful purpose” and has a “fundamentally predatory business model.”
Terrett also stated Better Markets’ position on spot Bitcoin ETFs was not surprising given the organization’s endorsement by Senator Elizabeth Warren, who is especially critical of the crypto sector.
Adding his voice to the debate, crypto analyst Matt Ahlborg also countered Kelleher’s claims, arguing that crypto does serve a social purpose, contrary to Better Markets’ position.
He also expressed concerns that the Bitcoin ETF proposal could face challenges following Better Markets’ late-stage intervention with the SEC and also noted the organization’s ties with Warren.
Additionally, LP Capital Chi, another crypto analyst, criticized Better Markets for an error in the date mentioned in their letter.
The decision on Bitcoin ETFs is highly anticipated by the market, with expectations for their approval set between Jan. 8 and 10. Previously, industry participants were hopeful for a judgment as early as Jan. 5, but the SEC requested exchanges and issuers to submit their final amendment, thus delaying the decision.
Market watchers forecast that the SEC’s decision on a spot Bitcoin ETF could have a significant impact on Bitcoin’s future price, with some predicting a drop in its value should the SEC reject the proposal. In contrast, others have predicted approval could push BTC prices as high as $80,000.
As of this report, Bitcoin was trading at approximately $43,902, showing a modest 0.60% increase in the previous 24 hours.