There's good news and bad news for Bitcoiners waiting for the Securities and Exchange Commission to approve a spot Bitcoin ETF, BitGo CEO Mike Belshe said during an interview yesterday.

"We're all excited about the ETF," Belshe said, adding that signals from conversations between ETF applicants and the SEC hint at progress being made. That's the good news.

Now, the bad: "I think it's quite likely we have another round of ETF rejections before we get the positive news," Belshe added, attributing the delays to concerns over market structure. Belshe emphasized the SEC's stance on the separation of exchange and custody roles, a point of contention in several applications tied to Coinbase custody.

He told Bloomberg News the market structure issue has come up before: "You have to separate exchanges from custody—the CFTC market structure is already this way; you have to separate exchanges from custody. The equities markets are this way as well."


There's been growing anticipation and Bitcoin price rallies on the assumption that the SEC is close to approving one of several Bitcoin ETFs. In fact, today marks the end of a period when the securities regulator could have hypothetically approved 12 ETF applications all at once.

And to some extent, it seems the SEC would agree with Belshe about market structure. When the SEC filed its lawsuit against the San Francisco-based crypto exchange, it alleged the company should have separately registered its exchange, clearing house, and broker.

But Belshe went so far as to draw comparisons between Coinbase and its bankrupt former competitor, FTX.

"Fifteen months ago we had Sam Bankman-Fried marching all over Washington, DC advocating his seven key points of regulation where he basically said, let me take on all functions, it's going to be great. It's going to be efficient, we'll do that," he said. "Obviously, we have a very different thought process right now, but a lot of these applications are within Coinbase custody. Well, I am not trying to say that they're an FTX by any means. But they are taking on also kind of taking on that same playbook."


Coinbase didn't immediately respond to a request for comment from Decrypt.

Former BlackRock managing director Steven Schoenfield, now at MarketVector Indexes, said at a conference in London last moth that three to six months seems like a likely timeline for a Bitcoin ETF approval, noting the SEC's recent requests for public comments as a positive sign of engagement rather than outright rejections.

The market anticipates that traditional finance giants like BlackRock, with an impressive track record for ETF approvals, may lead the charge. However, Schoenfield predicted stiff competition from firms more deeply integrated into the crypto ecosystem.

Editor’s note: This article was written with the assistance of AI. Edited and fact-checked by Stacy Elliott.

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