SEC Commissioner Caroline A. Crenshaw Raises Concerns About Investor Protection and Market Integrity
SEC Commissioner Caroline A. Crenshaw has expressed her dissent against the commission's approval of spot bitcoin ETFs, citing the risks of market manipulation, concentration of bitcoin ownership, and inadequate regulatory measures to protect investor interests.
Concerns about Global Spot Markets and Market Manipulation
Commissioner Crenshaw's primary concern revolves around the underlying global spot markets for bitcoin, which she believes are plagued by fraud and manipulation. She highlights instances such as the alleged bitcoin price manipulation by the former CEO of FTX to keep its price under $20,000 for personal gain. Crenshaw also points to the recent hacking of an SEC social media account and the subsequent false announcement of spot bitcoin ETFs, which led to volatile bitcoin prices, as evidence of potential market manipulation.
Concentration of Bitcoin Ownership
Crenshaw also raises concerns about the concentration of bitcoin ownership. She argues that the concentration of ownership among spot bitcoin holders leaves investors vulnerable to the trading practices of a few individuals. Analysis shows that mining and holdings of bitcoin are highly concentrated, further exacerbating this issue.
Inadequate Oversight and Investor Protection
The Commissioner argues that the susceptibility of spot bitcoin markets to manipulation, coupled with the lack of adequate oversight, undermines the effectiveness of the approved rule changes in protecting investors. She questions the correlation analysis used to justify the approval of spot bitcoin ETPs, highlighting the significant differences in investor protection between futures and spot bitcoin ETPs. Crenshaw suggests that spot bitcoin ETPs resemble an unregulated, global free-for-all, with limited recourse for investors in cases of fraud or manipulation.
Recreating the Financial System and Inflation of Investment Product Prices
Crenshaw also voices broader concerns about the cryptocurrency ecosystem's tendency to recreate the existing financial system with less regulation and more risk. She questions the deviation from Bitcoin's original ideals as a peer-to-peer, censorship-resistant digital currency. The Commissioner fears that closely linking Bitcoin to the traditional financial system may not serve the interests of investors but rather inflate the prices of these investment products.
What are your thoughts on Commissioner Crenshaw's concerns? Feel free to share your opinions in the comments section below.
Frequently Asked Questions
What are the advantages of a IRA with a gold component?
A gold IRA has many benefits. It can be used to diversify portfolios and is an investment vehicle. You decide how much money you want to put into each account, and when you want it to be withdrawn.
You can also rollover funds from other retirement accounts to a gold IRA. This is a great way to make a smooth transition if you want to retire earlier.
The best part? You don’t need to have any special skills to invest into gold IRAs. They're available at most banks and brokerage firms. Withdrawals are made automatically without having to worry about fees or penalties.
That said, there are drawbacks too. Gold is known for being volatile in the past. It's important to understand the reasons you're considering investing in gold. Are you looking for safety or growth? Do you want to use it as an insurance strategy or for long-term growth? Only when you are clear about the facts will you be able take an informed decision.
If you plan on keeping your gold IRA alive for a while, you may want to consider purchasing more than 1 ounce of pure gold. A single ounce will not be sufficient to meet all your requirements. Depending upon what you plan to do, you could need several ounces.
You don't have to buy a lot of gold if your goal is to sell it. You can even manage with one ounce. However, you will not be able buy any other items with those funds.
Should You Invest in gold for Retirement?
How much money you have saved, and whether or not gold was an option when you first started saving will determine the answer. If you're unsure about which option to choose then consider investing in both.
You can earn potential returns on your investment of gold. It is a good choice for retirees.
Although most investments promise a fixed rate of return, gold is more volatile than others. Because of this, gold's value can fluctuate over time.
This does not mean you shouldn’t invest in gold. It just means that you need to factor in fluctuations to your overall portfolio.
Another advantage of gold is its tangible nature. Gold is much easier to store than bonds and stocks. It's also portable.
You can always access gold as long your place it safe. You don't have to pay storage fees for physical gold.
Investing in gold can help protect against inflation. Because gold prices tend to rise along with other commodities, it's a good way to hedge against rising costs.
It's also a good idea to have a portion your savings invested in something which isn't losing value. When the stock market drops, gold usually rises instead.
Gold investment has another advantage: You can sell it anytime. You can also liquidate your gold position at any time you need cash, just like stocks. You don’t even need to wait until retirement to liquidate your position.
If you do decide to invest in gold, make sure to diversify your holdings. You shouldn't try to put all of your eggs into one basket.
Do not buy too much at one time. Start with just a few drops. Then add more as needed.
Don't expect to be rich overnight. Instead, the goal is to accumulate enough wealth that you don't have to rely on Social Security.
Even though gold is not the best investment, it could be an excellent addition to any retirement plan.
Can I keep physical gold in an IRA?
Not just paper money or coins, gold is money. Gold is an asset people have used for thousands years as a place to store value and protect their wealth from economic uncertainty and inflation. Gold is a part of a diversified portfolio that investors can use to protect their wealth from financial uncertainty.
Many Americans now invest in precious metals. While owning gold doesn't guarantee you'll make money investing in gold, there are several reasons why it may make sense to consider adding gold to your retirement portfolio.
Another reason is that gold has historically outperformed other assets in financial panic periods. Between August 2011 to early 2013, gold prices rose close to 100 percent while the S&P 500 fell 21 per cent. During these turbulent market times, gold was among few assets that outperformed the stocks.
Another advantage of investing in gold is that it's one of the few assets with virtually zero counterparty risk. Even if your stock portfolio is down, your shares are still yours. Gold can be worth more than its investment in a company that defaults on its obligations.
Gold provides liquidity. You can sell your gold at any time without worrying about finding a buyer, which is a major advantage over other investments. Gold is liquid and therefore it makes sense to purchase small amounts. This allows one to take advantage short-term fluctuations within the gold price.
Can I own a gold ETF inside a Roth IRA
Although a 401k plan might not provide this option, you should still consider other options like an Individual Retirement Account (IRA).
Traditional IRAs allow for contributions from both employees and employers. An Employee Stock Ownership Plan (ESOP) is another way to invest in publicly traded companies.
An ESOP is a tax-saving tool because employees have a share of company stock as well as the profits that the business generates. The money you invest in the ESOP will be taxed at a lower rate than if it were directly held by the employee.
Also available is an Individual Retirement Annuity. You can make regular payments to your IRA throughout your life, and you will also receive income when you retire. Contributions to IRAs do not have to be taxable
How does a gold IRA work?
People who wish to invest in precious metals can use Gold Ira accounts as a tax-free investment vehicle.
You can purchase physical bullion gold coins at any point in time. You don't have a retirement date to invest in gold.
Owning gold as an IRA has the advantage of allowing you to keep it forever. You won't have to pay taxes on your gold investments when you die.
Your heirs can inherit your gold and avoid capital gains taxes. It is not required that you include your gold in the final estate report because it remains outside your estate.
To open a Gold IRA, you'll need to first set up an Individual Retirement Account (IRA). Once you've done so, you'll be given an IRA custodian. This company acts as an intermediary between you and IRS.
Your gold IRA custodian can handle all paperwork and submit necessary forms to IRS. This includes filing annual reporting.
Once your gold IRA is established, you can purchase gold bullion coins. The minimum deposit required for gold bullion coins purchase is $1,000 However, you'll receive a higher interest rate if you put in more.
Taxes will be charged on gold you have withdrawn from an IRA. You'll have to pay income taxes and a 10% penalty if you withdraw the entire amount.
If you only take out a very small percentage of your income, you may not need to pay tax. There are exceptions. There are some exceptions. For instance, if you take out 30% or more from your total IRA assets, federal income taxes will apply plus a 20 percent penalty.
It's best not to take out more 50% of your total IRA investments each year. You'll be facing severe financial consequences if you do.
Statistics
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
External Links
wsj.com
- Saddam Hussein’s InvasionHelped Uncage a Bear In 1989 – WSJ
- Do you want to keep your IRA gold at home? It's not exactly legal – WSJ
finance.yahoo.com
cftc.gov
bbb.org
How To
The History of Gold as an Asset
From the very beginning of time, gold was a currency. It was universally accepted due to its purity and divisibility, beauty, scarcity, and durability. Aside from its inherent value, it could be traded internationally. Because there were no internationally recognized standards for measuring and weighing gold, the different weights of this metal could be used worldwide. One pound sterling in England was equivalent to 24 carats silver, while one livre tournois in France was equal 25 carats. In Germany, one mark was equivalent to 28 carats.
The United States started issuing American coins in the 1860s made of 90% copper and 10% zinc. This led to a decrease of demand for foreign currencies which in turn caused their prices to rise. The United States began minting large quantities gold coins at this time, which led to a drop in the price. Due to the excessive amount of money flowing into the United States, they had to find a way for them to repay some of their debt. To do this, they decided that some of their excess gold would be sold back to Europe.
Since most European countries were not confident in the U.S. dollar they began accepting gold as payment. However, many European nations stopped using gold to pay after World War I and started using paper currency instead. Since then, the price of gold has increased significantly. Even though gold's price fluctuates, it is still one of the most secure investments you could make.
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By: David Sencil
Title: SEC Commissioner Critiques Approval of Spot Bitcoin ETFs
Sourced From: news.bitcoin.com/sec-commissioner-crenshaw-dissents-from-spot-bitcoin-etf-approval/
Published Date: Fri, 12 Jan 2024 09:00:57 +0000
