Over the past decade, the United States Securities and Exchange Commission (SEC) has been at odds with the crypto industry, particularly when it comes to approving a spot Bitcoin exchange-traded fund (ETF). Gemini co-founder Cameron Winklevoss recently expressed his frustration, stating that the SEC’s constant refusal to approve a Bitcoin ETF has led to dire consequences for US investors. Winklevoss argued that investors have been forced into “toxic” and “unregulated” crypto products due to the lack of a regulated ETF option.

The Winklevoss twins have a personal stake in this matter, as they filed for their own Bitcoin ETF ten years ago, but have yet to receive approval from the SEC. Winklevoss criticized the SEC, calling it a “failed regulator” and highlighting the detrimental impact its refusal has had on US investors. Without a spot Bitcoin ETF, investors have been driven towards alternative products, such as the Grayscale Bitcoin Trust (GBTC), which trades at a significant discount to the price of Bitcoin and charges high fees.

According to YCharts, the GBTC currently has a net asset value discount of 30% compared to Bitcoin’s price. Furthermore, the GBTC imposes an annual fee of 2%, significantly higher than the industry average of 0.40% reported by Morningstar. Winklevoss believes that US investors have been subjected to these unfavorable conditions due to the SEC’s reluctance to approve a Bitcoin ETF.

Moreover, Winklevoss argues that the SEC’s stance has forced investors to seek opportunities on offshore platforms, which he deems as “unlicensed and unregulated.” He specifically calls out FTX, referring to it as “one of the largest financial frauds in modern history.” Winklevoss suggests that the SEC should reflect on its track record and focus on its core mandate of investor protection rather than overstepping its power.

While the SEC has been resistant to approving spot Bitcoin ETFs, a growing number of companies have recently filed, renewed, or amended their applications for such ETFs. BlackRock, Fidelity, WisdomTree, Invesco, Valkyrie, and ARK Invest are among the firms vying for SEC approval. However, the SEC has raised concerns about the adequacy and clarity of some of these filings, prompting the fund managers to revise and resubmit their applications.

In the midst of these regulatory challenges, Gemini, the cryptocurrency exchange co-founded by the Winklevoss twins, finds itself engaged in a court mediation with Genesis, a subsidiary of Digital Currency Group (DCG), which owns Grayscale. The exchange is also facing legal charges from the SEC, further highlighting the complex legal landscape surrounding the crypto industry.

As the battle between the SEC and the crypto industry continues, the fate of a regulated spot Bitcoin ETF hangs in the balance. The SEC’s decisions will undoubtedly shape the future of crypto investments in the United States and determine whether investors will have access to a regulated and transparent ETF option. Meanwhile, industry players like Gemini and proponents of Bitcoin ETFs are closely monitoring the regulatory developments and hoping for a favorable outcome that will benefit both investors and the broader crypto ecosystem.