The U.S. Securities and Exchange Commission (SEC) has been reluctant to approve spot Bitcoin exchange-traded funds (ETFs), but according to Barnea & Co..Dr Zvi Gabbay, partner at law firm and head of capital markets, said giants such as BlackRock must have the "right advisor" to guide their spot Bitcoin ETF applications.。

In the second part of the discussion with Dr. Gabby, an expert in financial regulation and law enforcement, we learned about the different attitudes of the European Union towards cryptocurrencies, whether cryptocurrency companies are still willing to do business in the United States, the need to build bridges between the cryptocurrency industry and the traditional financial industry, but also about political influence and the possibility of spot Bitcoin ETFs being approved.。

In stark contrast to the US, the EU has taken a markedly different approach and is implementing the newly created Crypto Asset Market (MiCA) framework for cryptocurrency regulation, which Dr Gabbay hails: "The EU is in the right order.。The learning process to develop the MiCA was impressive and when you see the work they do, the research, the interviews, talking to market participants, understanding the pitfalls, understanding the challenges, I think it's the right way to handle things.。Their analytical ability is very strong。"

EU Supports Cryptocurrency Regulation, US Limits

Meanwhile, crypto businesses based outside the US appear to be actively avoiding the US market.。

"Other jurisdictions are developing their financial regulation (to include cryptocurrencies) to the extent that the regulatory uncertainty created by the SEC will push major cryptocurrency players away from the United States."。Because if you can thrive as a legitimate, fully regulated business in Europe, but risk a lawsuit in the United States that will cost you millions and ruin your business, naturally don't.。"

As Dr. Gabbay is in private practice in this field, he is able to use his experience to address these issues。"We have a good blockchain crypto practice, and the last time we had a customer who was no longer in the US for some reason, but didn't directly block the US and do business elsewhere.。"

This suggests that cryptocurrency is a global, digitally anonymous business that sometimes annoys regulators, and the ability to bypass geographic restrictions on transactions almost instantly is one of its main advantages.。"The United States is not an aquarium, it is part of the global economy, and you cannot isolate the United States from the global economy, much less from the blockchain / cryptocurrency world, which is completely indifferent to the geographical order."。

At the same time, there seems to be a growing desire to meaningfully connect the cryptocurrency world with the traditional financial world, as evidenced by the creation of Bitcoin ETFs and the growing interest in blockchain integration by businesses.。

"The cryptocurrency industry needs to mature, and my clients are developing real products."。We have meta-universes, we have cryptocurrencies, these are alternative universes。And what we're seeing now is that the bridge between the meta-universe and the traditional system is getting more and more developed.。However, to build these bridges, there must be regulation。"

Many analysts believe the much-anticipated spot Bitcoin ETF approval filings by BlackRock and others with the SEC are the main driver of the recent rise in bitcoin prices, but that's not a foregone conclusion yet.。However, the SEC may have shown that such products are viable。

"You can have informal conversations with regulators, and in many cases, as a former regulator, in having those conversations, I can judge whether the other person is willing to listen to my arguments and may approve a product or whether there is no chance at all."。BlackRock, I think, definitely has the right advisers who will hear the nuances and be able to sort of gauge whether there's a real open mind on the part of the SEC, and that's probably why they applied。"

"What they heard was not going to be, 'No problem, we'll approve,' but my guess is that in these informal conversations, they hit the pain points and thought of ways to solve these problems, and I think the response was, 'We're not going to say it's stupid, why don't you submit it, let's continue the conversation.'"。"

Still, Dr. Gabbay added an important caveat to the speculation, namely that other entities, such as Coinbase and Telegram, reported prior "contact with the SEC, where they talked and communicated, back and forth, and it was a productive conversation."。Then, at one point, the SEC stopped taking their calls, and a few months later, they got a complaint。Therefore, in this case, the regulator should not conduct business in this way。"

SEC, Politics and Cryptocurrencies

As the cryptocurrency industry moves closer to the mainstream and people complain about the SEC's ultra vires enforcement, politicians and political lobbying have become increasingly important in the discussion.。However, even as next year's U.S. presidential election approaches, it's unclear whether the political parties are completely clear on the issue of cryptocurrencies.。

"The last administration was Republican, and under the Trump administration, Jay Clayton was the chairman of the SEC, and enforcement regulation started then and continues to this day, and I didn't see them step in and regulate cryptocurrencies."。"

On the other hand, though, Dr. Gabbay described Republican frustration in a reference to a congressional hearing with SEC Chairman Gary Gensler earlier this year: "To hear Republican representatives out there was a serious criticism of the SEC."。They are not at all polite, friendly or polite。They are pro-business and are very clear that neither Gensler's approach nor the SEC's approach is pro-business and does not provide relevant clarity. "。

This illustrates the need for coherence, calm analysis and an open mind when it comes to the involvement of politicians。

"Right now, the cryptocurrency industry is maturing, and I think this is also an opportunity for politicians (certainly more proactive and visionary politicians) to step in and start offering solutions, because this is a vital component."。"

As Dr. Gabbay says, some of the gridlock in the U.S. may also be down to this: "The SEC did not listen to the criticism with the right mindset, and may learn from it and take responsibility."。You can't just be righteous, regulators have this tendency。"

In addition to cryptocurrencies, a New Jersey court is currently hearing a high-profile case in which the assets of the MyForexFund founder were released after the US Federal Trade Commission (CFTC) filed retail fraud charges, while MFF entered a plea to the charges.。

On the case, Dr Gabby said: "Zhongfu Financial sold 'simulated transactions', as the judge correctly pointed out, 'the environment may be simulated, but the transactions are real."。In fact, customers have the opportunity to trade, sometimes successful, sometimes unsuccessful, and in fact, Zhongfu Financial is always the counterparty。Financial regulation is designed to protect customers precisely in these circumstances, and I think the judge is right to point out that the fact that the transaction is not actually performed on a real stock exchange is irrelevant.。"

"Nonetheless, I think the underlying philosophy behind the MFF business is valuable and people can build a legitimate business on that, but to do so requires proper disclosure and regulatory protection for customers where required by law."。"

The SEC declined to comment on Zvi Gabbay's remarks, but took a look at Gensler's comments during the testimony, as well as his reiteration in the speech that the cryptocurrency market should be subject to securities regulation.。