Cameron Winklevoss, co-founder of Gemini, criticized US securities regulators, accusing them of forcing investors to purchase "toxic" and "unregulated" cryptocurrency products. On July 2, the Winklevoss twins expressed their dissatisfaction with the US Securities and Exchange Commission (SEC ) for consistently rejecting spot bitcoin exchange-traded funds (ETFs), emphasizing that it has been a decade since they first applied for their own ETF to be approved. Winklevoss claimed that the SEC's refusal has had detrimental effects on US investors and portrayed the regulatory agency as a failed regulator.
Without an approved spot bitcoin ETF, Winklevoss argued that US investors are compelled to invest in "toxic products" like the Grayscale Bitcoin Trust (GBTC), which trades at a significant discount to the actual bitcoin price and charges exorbitant fees. Current ly, GBTC's net asset value (NAV) is discounted by 30% compared to the price of Bitcoin. Moreover, Morningstar's research from July 2022 revealed that GBTC has an annual fee of 2%, much higher than the average annual fee of 0.40%. Winklevoss contended that the SEC's stance has pushed US investors towards unlicensed and unregulated offshore platforms, citing FTX as an example and labeling it as one of the greatest financial frauds in modern history.
Winklevoss suggested that the SEC should reflect on its unsatisfactory track record and focus on fulfilling its duty to protect investors instead of overreaching its statutory powers and acting as a gatekeeper of economic life. These remarks come as several firms, in including BlackRock, Fidelity, WisdomTree, Invesco, Valkryie, and ARK Invest, have recently filed or updated filings for spot bitcoin ETFs. However, the SEC reportedly deemed some of the filings inadequate and lacking clarity and comprehensiveness, leading the regulator to request fund managers to resubmit their filings with clearer language .
Gemini, the exchange co-founded by the Winklevoss twins, is currently involved in a prolonged court settlement with Genesis, a subsidiary of Digital Currency Group (DCG) that owns Grayscale, the management company of GBTC. Additionally, Gemini is facing legal proceedings over allegations made by the SEC.
