John Reed Stark, a former investigator with the U.S. Securities and Exchange Commission (SEC), has strongly opposed the approval of spot Bitcoin exchange-traded funds (ETFs). He believes that cryptocurrencies have no inherent value and are primarily used for criminal activities.
Stark, who previously served as the chief of the SEC Office of Internet Enforcement, expressed his views in a lengthy post on social media on January 7. He painted a grim picture of Bitcoin and other cryptocurrencies, stating that their only proven utility is in facilitating illegal activities.
In his post, Stark referred to the pending approval of a Bitcoin spot ETF as a “fee-suck” and compared it to a Ponzi scheme. He also shared a tweet in which he argued that cryptocurrencies have no cash flow, yield, employees, management, balance sheet, product, or service, and lack a history of operations.
Stark’s criticism comes amid reports that the SEC may approve a Bitcoin spot ETF as early as January 10. He believes that this is just another scheme to benefit billionaire financial magnates at the expense of investors.
According to Stark, Bitcoin ETFs are a means of creating more opportunities for investors to experience financial ruin while lining the pockets of the wealthy. He described the crypto ecosystem as a toxic combination of computational blather, affinity fraud, and the “Greater Fool Theory.” He also accused Bitcoin spot ETF applicants of using the concept of “financial inclusion” to hide a massive Ponzi scheme.
Stark concluded his post with a warning that the approval of a Bitcoin spot ETF would expose millions of American investors to the risks associated with investing in digital assets. He urged the SEC not to facilitate the widespread dissemination of a financial product that he believes is a “socially worthless gambling chip.”
In a similar submission, Better Markets CEO Dennis M. Kelleher addressed the SEC in an official letter on January 5, urging the regulator to reject the ongoing applications for a Bitcoin ETF. Kelleher warned that approving the financial instrument could pose a significant risk to investors and have no societal value. He also cautioned that this could set a concerning precedent and make it harder for the SEC to secure victories in future legal disputes.
Kelleher’s sentiments were met with criticism from some members of the crypto community. Bloomberg ETF analyst James Seyffart argued that dismissing ETF applications at this stage would be a “criminal move,” given the time and effort invested by both the SEC and potential issuers.
Others, like FOX News journalist Eleanor Terrett, called out Kelleher for his history of anti-crypto statements and his alleged close relationship with Senator Elizabeth Warren, who often scrutinizes the crypto industry.
In conclusion, while the debate over the approval of a Bitcoin spot ETF continues, it is clear that there are strong opinions on both sides. Only time will tell what decision the SEC will make and how it will impact the future of cryptocurrencies. For now, it is important to stay informed and make educated decisions when it comes to investing in digital assets.
