Better Markets, a non-profit focused on financial market integrity, has strongly criticized the recent approval of Spot Ethereum ETFs by the U.S. Securities and Exchange Commission (SEC). The organization's Director of Securities Policy, Benjamin Schiffrin, expressed serious concerns over the SEC's decision.

Better Markets Opposes Ethereum ETFs Approval

Schiffrin condemned the SEC's move as a "historic mistake," arguing it would increase risks for investors in the already volatile crypto industry. This critique follows the SEC’s approval of rule changes allowing national securities exchanges to list and trade Spot Ether ETPs.

The financial community has voiced significant worries about this decision. These concerns are largely due to recent fraud cases within the crypto space. Schiffrin noted that the SEC's approval of Spot Bitcoin ETPs had already been a mistake, and doubling down with Ethereum ETFs would only worsen the situation.

Schiffrin highlighted the dangers of investing in ETH, Ethereum’s native currency. He pointed to cases of fraud, such as the indictment of two brothers who manipulated the Ethereum blockchain to fraudulently gain millions in cryptocurrency.

In their comment letters, Better Markets outlined why the proposed rule changes for listing Spot Ether ETPs should have been denied. Schiffrin emphasized Ether's volatility and the Ethereum network's susceptibility to fraud and manipulation, warning that these ETFs could harm retail investors and the financial system.

Warnings Linked to Bankman-Fried & CZ

Schiffrin's concerns are further amplified by recent legal troubles involving high-profile crypto figures like Sam Bankman-Fried, founder of FTX, and Changpeng Zhao (CZ), founder of Binance. Bankman-Fried was convicted of stealing billions, receiving a 64-month prison sentence, while CZ pleaded guilty to money laundering, with a four-month prison sentence still pending.

Better Markets argues that Ethereum ETFs could introduce similar threats to the financial system, echoing the dangers posed by individuals like Bankman-Fried and CZ.

However, Better Markets' stance has faced backlash. Nate Geraci, host of ETF Prime, pointed out the dramatic shift in the SEC and Biden administration's approach to crypto. He sarcastically noted that Better Markets seemed unaware of this change in direction, saying, “Better Markets apparently didn’t get the memo from DC to shift stance on crypto.”

Conclusion

In conclusion, Better Markets has raised serious concerns about the approval of Spot Ethereum ETFs, citing significant risks to investors and the financial system. Despite facing criticism, their warnings highlight ongoing issues within the crypto industry and the potential dangers of expanding crypto-based financial products.