Bitcoin ETFs “Will Eventually Happen,” Says Cornell Computer Science Professor

Omar Faridi
  • Dr. Emin Gün Sirer, a well-known crypto personality, said technological advancements will eventually lead to the approval of crypto ETFs.
  • Sirer blamed crypto market manipulators for the SEC’s rejection of Bitcoin ETFs.

Cornell professor Emin Gün Sirer, a well-known crypto personality, recently stated that technological advancements in the crypto industry will likely lead to the SEC’s approval of a Bitcoin ETF.

According to Dr. Sirer, there are a couple of ways the US Securities and Exchange Commission (SEC) could be persuaded to green light crypto ETFs. One way, the Turkish-American professor suggests, is to request the SEC to re-evaluate its stance, given Commissioner Hester Peirce’s dissenting opinion against its recent rejection of another Bitcoin ETF.

Dr. Sirer noted that chances are slim the SEC will reconsider Bitcoin ETF applications based on Peirce’s dissenting opinion. This, the professor says, is because “it’s not like the agency didn’t already know” that Peirce didn’t agree with its ruling.

A better could be directly addressing the SEC’s objections regarding a Bitcoin ETF, he suggested. Notably, Sirer, who cited concerns about the DAO on the Ethereum network prior to its hack, is known for keeping a fairly objective point of view. In this particular case, he revealed he thinks the SEC might have rejected Bitcoin ETF applications so far because of its genuine concern for investor protection.

Blaming Market Manipulation

Dr. Sirer went on to allege that those who are critical of the SEC’s ruling often take part in abusive crypto market manipulation tactics. Due, in part, to their harmful activities, the professor believes the federal regulator may have not approved crypto ETF applications at this time.

Despite the presence of pump-and-dump schemes in cryptocurrency markets, Sirer believes the SEC will eventually approve Bitcoin ETFs. However, he stressed that blockchain developers will have to make substantial technological improvements to cryptocurrency platforms, before the regulator reconsiders its current stance.

Sirer added:

“There are technological solutions being developed for building trustworthy exchanges, for adding liquidity, and for doing secure public audits. The answers to the problems cited in SEC's report lie in technology. Tech brought us all the way to this point and it can/will lead us out of here. Rest assured that the ETFs will eventually happen.”

Emin Gün Sirer

Israel Bitcoin Association Petitions Banks to Reveal Crypto Policy

Neil Dennis

A number of Israel's bitcoin traders have already filed lawsuits against the country's banks and on Monday traders lodged a formal petition demanding that the financial industry explains its cryptoasset policy.

Israel's banks have barred the country's crypto investors from depositing the returns on their bitcoin and other digital currency investments due to the nation's strict laws on money laundering and the financing of terrorism.

In recent months banks have even blocked investors who are known to trade cryptoassets from opening accounts, according to a report by Israeli business journal Globes.

Central Bank Warning

Israel has seen strong growth in digital currency investment in recent years and in 2014 the Bank of Israel, the nation's central bank, issued a warning - in co-operation with the Tax Authority and several regulatory agencies - about the dangers associated with the use of virtual currency, including fraud and money laundering.

Taking aim directly at financial services providers, the statement said:

As the use of virtual currencies enables their anonymous transfer, in many cases evading the need to use financial institutions that are subject  to an anti-money laundering and terror financing prohibition regime, this is an activity with a high risk co-efficient in terms of money laundering and terror financing. Therefore, financial institutions must take this into account within the framework of their risk management policy.

Injunction

Israel's top legal authority is well aware a problem exists. In February 2018, the Supreme Court issued a temporary injunction prohibiting a bank from blocking activities in an account held by a company that engaged in bitcoin trading.

The bank, however, countered the Supreme Court's injunction, citing the 2014 Bank of Israel warning regarding the risks of bitcoin trade. The bank alleged that activities exposing the bank to such unlawful acts might "harm its reputation and public trust in the bank".

While the injunction stood, it did not affect the bank's right to examine individual activities in the account, nor did it affect the bank's ability to take steps to minimize risks associated with the business activities of the company.

Freedom of Information

The freedom of information petition filed in the Jerusalem District Court on Monday by the Israel Bitcoin Association demands that commercial banks make public their policies on cryptoassets.

Jonathan Klinger, legal adviser to the Bitcoin Association, told Globes:

Under the Banking (Licensing) Law, it is the duty of a bank to state to the Bank of Israel the policy under which it refuses to conduct transactions. We therefore contacted the Bank of Israel and asked for this information, but the Bank of Israel did not agree to disclose this policy to us. We therefore decided to petition the court to force the Bank of Israel to provide us with a copy of the policy submitted to it by the banks.

Lawsuits

Last week the Tel Aviv District Court received a petition for approval of a 75 million shekel ($21.3 million) class action suit against Bank Hapoalim that alleges the bank refused a customer seeking to deposit money from the sale of digital currencies.