Binance’s recent $4.3-billion settlement with the United States is seen by many as the final hurdle standing in the way of the country’s securities regulator approving spot Bitcoin exchange-traded funds (ETFs).
This significant development involved Binance agreeing to have Justice Department and Treasury compliance monitors oversee its operations for a period of up to five years.
These monitors will have the authority to ensure Binance’s compliance with Anti-Money Laundering (AML) and sanctions regulations, among other requirements.
The U.S. Securities and Exchange Commission (SEC) has previously cited concerns about market manipulation as a reason for denying spot Bitcoin ETFs.
To gain approval for these ETFs, Binance’s market dominance needed to be addressed.
Travis Kling, the chief investment officer of Ikigai Asset Management, emphasized this point in a June tweet, asserting that the ETF approval was unlikely with Binance’s current level of market dominance.
Kling’s prediction prompted discussions about the relationship between BlackRock and the U.S. government in obtaining a favorable position in the spot Bitcoin ETF market.
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Some speculated whether Binance’s settlement was a strategic move by BlackRock to acquire Bitcoin at a lower cost or to eliminate competition from U.S. markets before the ETFs launch.
Furthermore, the fact that BlackRock and its competitor Vanguard collectively own 11.5% of Coinbase, a major competitor to Binance, raised suspicions about the timing of the action against Binance.
BlackRock recently met with the SEC on November 20 to present its proposal for a spot BTC ETF, outlining how it could utilize either an in-kind or in-cash redemption model for the iShares Bitcoin Trust.
Other firms like Grayscale, Fidelity, WisdomTree, Invesco Galaxy, Valkyrie, VanEck, and Bitwise are also awaiting SEC approval for their spot Bitcoin funds, indicating the growing interest in this financial product.
Mike Novogratz, the CEO of Galaxy Digital, expressed optimism about the Binance settlement, deeming it “super bullish” for the cryptocurrency industry.
However, not everyone is fixated on speculating about the implications of the Binance settlement on spot BTC ETF approvals.
Piper Alderman partner Michael Bacina suggested that it might be wise to let the speculation run its course rather than jump to conclusions about the outcome.
The future of spot Bitcoin ETFs in the United States remains uncertain, but these recent developments have undoubtedly added intrigue to the regulatory landscape.
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