Bitcoin ETF Rivalry Could Promote Transparency By Spurring Issuers to Disclose Addresses, Samson Mow

Author Avatar

Staff Writer

Joined: Nov 2016

More expert opinions keep pouring in as the race for Bitcoin exchange-traded funds (ETFs) gets stiffer among the potential issuers. A prominent industry activist and Jan3 CEO, Samson Mow, draws out the need for transparency amid the competition among issuers.

Mow noted that the issuers would have to reveal the on-chain addresses for their underlying BTC volumes to help them stand out among competitors. Such disclosures will help to circumvent situations where an issuer violates set rules to fake BTC volumes, according to Mow.

Disclosing On-chain Addresses Could Add A Competitive Edge and Encourage Transparency for Bitcoin ETFs
In an exclusive interview with Cointelegraph, Samson Mow said revealing such verifiable on-chain proofs indicates the issuers’ BTC reserves. Also, it could serve as a guarantee for their holdings before the public, helping them gain investors’ trust.

Additionally, Mow acknowledged that none of the present 14 spot Bitcoin ETF applicants have reflected moves to disclose on-chain proofs. He drew attention to the possibility of issuers creating an ‘unbacked’ spot BTC ETF. This means hypothetically, an issuer could violate the rules.

Mow stated:

Technically, it should not be possible for an ETF to issue unbacked shares as they are tightly regulated, but regulation doesn’t necessarily mean that issuers play by the rules.

Also, the Jan3 CEO pointed out that transparency would be a competitive advantage to issuers in the spot BTC ETF race. 

Mow said:

As the ETF arm race escalates, I believe we will see one or more funds disclose their addresses in a bid to be viewed as the most transparent and reliable issuer.

Controversies Surrounding Spot Bitcoin ETF And Self Custody
Before now, many crypto observers have indicated a high level of skepticism regarding the underlying holdings of a spot Bitcoin ETF. Moreover, some project executives think a spot in Bitcoin ETF will give rise to millions of unbacked BTC. 

The argument maintained that the ETF product contradicts the concept of self-custody, where users are completely responsible for owning and holding the actual tokens.

Conversely, Bloomberg ETF analyst Eric Balchunas suggested that the actual holding of Bitcoin would favor ETF issuers.

This is because by not holding the asset, the issuers could lose their reputation and the public’s confidence. Meanwhile, the growing rivalry in the spot Bitcoin ETF race is taking a different dimension.

While waiting for the next move from the Securities and Exchange Commission (SEC), some asset managers revealed their pricing for the product.

The new development could be part of their strategies to attract early investors. Fidelity Investments set the charge of its Wise Origin Bitcoin Trust at 0.39% per annum. However, Galaxy/Invesco revealed a yearly fee of 0.59% for its BTCO fund.

Also, the firm plans to offer a waiver on the fee for the first six months once the fund becomes operational.

The SEC has not released any notification regarding the expected approval of spot BTC ETF. However, the entire crypto community is earnestly waiting for its decision that could transform approaches to investing in Bitcoin in the long run.


0 %

User Score

0 ratings
Rate This

Leave your comment

Your email address will not be published. Required fields are marked *