U.S. Senators Jack Reed and Laphonza Butler have called on the Securities and Exchange Commission (SEC) to refrain from approving further crypto exchange-traded products (ETPs), particularly those linked to cryptocurrencies other than Bitcoin.
In a letter to SEC Chair Gary Gensler dated March 11, the senators highlighted the lack of sufficient trading volumes and integrity in cryptocurrencies like Ethereum, which they believe could expose retail investors to risks of fraud and market manipulation.
The senators’ concerns follow the launch of ten spot Bitcoin ETFs in the U.S. in January, which contributed to the resurgence of the cryptocurrency market with Bitcoin surging as high as US$73,737.
The senators’ letter comes amid ongoing SEC considerations for spot Ethereum ETFs.
Bloomberg analysts have reduced the likelihood of a spot Ethereum ETF approval to 35%, and the SEC has delayed its ruling on several proposed Ethereum ETFs.
The agency is expected to announce its decision in May.
Institutional interest in Bitcoin has been growing, with the approval of US spot Bitcoin ETFs contributing to this trend.
However, experts warn that challenges within the crypto industry, such as security and compliance issues, may slow down institutional adoption.
