Cryptocurrency and ETF's - Regulatory Challenges - A Case for Progressive Regulators

Abstract

Ever since their introduction in 1989 in the USA, Exchange Traded Funds (ETF's) have gained wide popularity and Asset Management Companies (AMCs) have been using innovative nomenclature for them to entice potential investors. Among a host of theme-based ETFs which offer varied investment strategies and returns, Blockchain ETF's are of relatively recent origin and have caught investors' attention as a substitute for investment in blockchain technology directly or through listed companies. Since 2018, blockchain ETFs have appeared on the horizon designing products backed by companies investing in or developing blockchain based solutions. Parallel to this, there is a growing class of unregulated Bitcoin ETF, Trusts and other financial products that track the value of Bitcoin and trade on traditional market exchanges rather than cryptocurrency exchanges. The instant paper attempts to examine the fundamentals of blockchain technology, the factors throwing up block chain and Bitcoin ETFs in to prominence and their legal recognition by the regulators. It also attempts to study whether the blockchain ETF is just a proxy for Bitcoin/Bitcoin ETFs or a radically different product requiring fresh regulatory oversight.11The contents of this research are personal views of the authors.