Connect with us

Cryptocurrencies News

FTX fiasco set back the approval of Bitcoin spot ETFs: Valkyrie investment chief

In episode 11 of Hashing It Out, Cointelegraph’s Elisha Owusu Akyaw speaks to Steven McClurg, the chief investment officer of Valkyrie Investments, about the state of Bitcoin (BTC) exchange-traded funds (ETFs) and the way forward.

Regulators in the United States have mounted stiff opposition against listing Bitcoin spot ETFs even though Canadian and European regulators have given the green light. McClurg points out that even for the Canadian and European markets, these approvals also took a long time. According to McClurg, the two biggest issues U.S. regulators have with Bitcoin spot ETFs are custody and market manipulation.

The chief investment officer believes that the custody issue would have largely been dealt with if not for the FTX fiasco, which caused regulators to take a step back to scrutinize whether custodians are safe before approving more Bitcoin investment products. On the second issue of market manipulation, McClurg believes that similar products in Canada have made a case for why such concerns are invalid.

Locally, companies like Valkyrie Investments are actively working with regulators to answer major questions surrounding the safety of Bitcoin Spot ETFs. McClurg says Valkyrie has been educating regulators on how custody works and sharing notes on due diligence done by the company on various custodians, which picked up red flags in some of the companies that went bust last year.

“We performed due diligence on Celsius, Voyager, BlockFi, and FTX, and we never onboarded with them. We decided that they were not safe platforms to be involved with.“