Winklevoss Twins Slam SEC for Blocking Bitcoin ETFs

Cameron Winklevoss, co-founder of Gemini, claims that for the past decade, the United States securities regulator has forced investors into “toxic” and “unregulated” crypto products.

On July 2, one of the Winklevoss twins criticized the U.S. Securities and Exchange Commission’s (SEC) refusal to approve spot Bitcoin exchange-traded funds, noting that it has been ten years since the twins first filed to have their own ETF approved.

“The [SEC’s] refusal to approve these products for a decade has been a complete and utter disaster for US investors and demonstrates how the SEC is a failed regulator.”

Without an approved spot Bitcoin ETF, Winklevoss argued, U.S. investors are forced into “toxic products like the Grayscale Bitcoin Trust (GBTC), which trades at a massive discount” to the price of Bitcoin and charges “astronomical” fees.

GBTC’s NAV discount is currently 30% compared to Bitcoin’s price, according to YCharts.

In comparison, the GBTC annual fee is 2%, compared to an average of 0.40%, according to the most recent study conducted by MorningStar in July 2022.

Winklevoss also believes that the refusal has prompted U.S. investors to migrate to “unlicensed and unregulated” offshore platforms, such as FTX, which he describes as “one of the largest financial frauds in modern history.”

“Perhaps the SEC will reflect on its abysmal track record, and instead of exceeding its statutory authority and attempting to act as the gatekeeper of economic life, it will concentrate on fulfilling its investor protection mandate,” he opined.

BlackRock, Fidelity, WisdomTree, Invesco, Valkryia, and ARK Invest, among others, have recently filed, renewed, or amended their filings for a spot Bitcoin ETF, prompting Winklevoss’s remarks.

Reportedly, the SEC has stated that some spot ETF filings are inadequate and not “sufficiently clear and comprehensive.”

The regulator has requested that the fund managers resubmit after revising the language of their filings.

In the meantime, Gemini is engaged in lengthy court mediation with Genesis, a subsidiary of Digital Currency Group (DCG), which also owns Grayscale, the GBTC manager. The exchange is also facing SEC charges in court.