| > One of the main reasons this ETF was rejected is because many of the major exchanges like Bitfinex, BitMEX, Binance, and Kraken are alleged to be manipulators The fact that the price is being manipulated is indeed an issue, but the solution is not to reject the ETF but rather to implement an exchange that has proper audit mechanisms in place (as in: prevent wash trading that will make the SEC happy). This concern was already the main factor that led to the previous rejection. Gemini seems to have worked hard to implement such audit mechanisms, but apparently still failed to meet the SEC's bar. That point was actually made in the dissenting opinion article. The real question of course is if such an exchange, doing the right thing in a room full of offshore-based bad actors exchanges will actually manage to survive. >>Bitcoin are interchangeable
> That is no longer true Actually, that was never true. Bitcoin's lack of fungibility has been a problem from day one, and to address it, half-baked measures have been tried (mixers), new protocols have been discussed and implemented (coinjoin, coinshuffle, bulletproofs, ... https://medium.com/@nopara73/tumblebit-vs-coinjoin-15e5a7d58... has a summary). The full solution is ZKP-based protocols as implemented by some alts {ZCash, Monero, ...} However, I'm actually not sure that this is a problem when it comes to gaining SEC approval. The traceability of Bitcoin , which many see as a weakness of Bitcoin might end up being a very pleasing aspect for the regulator. >This is a naive and incorrect risk assessment. It's unclear what amount of correlation - if any at all - exists between miner control and BTC market price.
One thing that's always been true is that if a miner goes above 51% and starts to misbehave (as in, e.g. selectively mining transactions he likes, or more ham-fistedly, doing a 51% attack) this will deeply tank the price, and he'd be shooting himself in the foot. In short, there is a built-in economic incentive feedback mechanism to "encourage" miners to behave, and that's a much stronger argument than the "geographically unlimited" one. |
The solution is for the SEC to run an exchange? How does that make sense? They should keep rejecting the ETF until such an exchange exists.