This historic and important development means that with the ETF, Bitcoin will now be able to be traded on the stock exchange just like normal stocks. We can say that cryptocurrencies that are not normally possible to be listed on the stock exchange have turned into stocks traded on the stock exchange.
In fact, the SEC has so far rejected all spot Bitcoin ETF requests, citing potential market manipulation, fraud concerns and illegal activities where Bitcoin is used as a means of payment. The SEC was forced to revisit the fate of spot bitcoins after Grayscale had its decision to reject Grayscale’s application to convert its Grayscale Bitcoin Trust into a spot Bitcoin ETF in August 2023 overturned in court.
SEC Chairman Gensler is a name that has always been at the centre of controversy with his attitude towards cryptocurrencies. However, this time there was a very surprising development that in the vote among the 5 committee members of the SEC, 3 people, including Gensler, voted yes in order to approve Spot Bitcoin ETFs.
So what is the curious ETF?
The term “Exchange-Traded Funds” stands for “exchange-traded fund” in Turkish. ETF, which is a type of security that can be traded on the stock exchange; any index, sector, commodity, etc. They are funds that can be traded on the stock exchange like a normal stock by monitoring assets. Another different definition is the abbreviation of exchange-traded funds, which are created to provide portfolio diversity and traded on stock exchanges.
As can be understood from the comment, with the Spot Bitcoin ETF approval, we can comment that traditional investors also took their place in the cryptocurrency exchange. There are many factors for investors to prefer. For example; It has low costs, offers tax efficiency and works like a security…
When the legal dimension of the development is considered, we can comment that with the approval of the ETF, it actually paves the way for the evaluation of crypto assets as securities. We lawyers have different views on how crypto assets will be evaluated. For some of us, it is only a means of payment, securities, securities, fiat money, dematerialised money, electronic money; for some of us, it is not considered as securities or other capital market instruments.
However, with this development and Gensler’s subsequent statement that “Most of the tokens are securities and will be evaluated within the framework of securities laws.” I think that it would be more accurate to evaluate cryptocurrencies as securities. Which was also my opinion in the light of Article 762 of the TMK before. However, there is not yet any legal article for crypto assets confirming this definition in our legislation.
Movable Property is regulated in Article 762 of the TMK as follows.
| CONTINENTAL PROPERTY – Subject Article 762 – The subject matter of immovable property shall be movable tangible things and natural forces which are favourable to acquisition and which are not covered by immovable property. |
Securities, on the other hand, are negotiable instruments that are acquired by individuals for investment purposes, which provide partnership or receivable rights and for the issuance of which permission is obtained from the Capital Markets Board.
WHAT HAPPENED BEFORE ETF APPROVAL FROM SEC;
Exactly one day before the SEC’s historically important approval announcement, the regulator’s Twitter account was hacked. While the approval has not yet come, a post was made that the spot Bitcoin ETF approval was given.
| “Today, the SEC is approving the listing of Bitcoin ETFs on all registered national securities exchanges. Approved Bitcoin ETFs will be subject to ongoing surveillance and compliance measures to ensure the continued protection of investors” |
With this statement, the Bitcoin price rose significantly in a short time. We would like to state that with the opening of the actual approval later, we would like to state that there was no major impact on prices as expected.
The real issue to be assessed is not this issue, but rather the issue of CYBER SECURITY VIOLATION.
The US Securities and Exchange Commission (SEC) suffered a cybersecurity breach when an unauthorised person gained access to the official @SECGov Twitter account. Hackers were able to take control of the phone number associated with the account and make unauthorised posts. The SEC Public Relations Office, however, took swift action as soon as they realised the situation and chose to inform the public about the post first.
Afterwards, the SEC immediately cooperated with X.com to prevent unauthorised access and coordinated with the FBI and other federal agencies regarding the hack.
So in a way, we can say that the SEC was subjected to social engineering attacks. Social engineering is one of the most widely used types of cyber-attacks today, used by cybercriminals to exploit people’s vulnerabilities. These attacks, which are usually carried out to access sensitive and confidential information such as user names, passwords, credit card information, network credentials, etc.
It was also noted that two-factor authentication was not enabled on the SEC’s X account at the time of the incident. Which, we regret to say, is a serious security weakness. It is deplorable that one of the most important regulatory agencies does not actively use two-factor authentication.US Senators J.D. Vance and Thom Tillis also expressed concern about the SEC’s internal cybersecurity procedures and demanded clarification.
As a matter of fact, even small measures that can be taken against cyber attacks prevent major disasters. Let’s take this opportunity to mention some measures that can be taken against phone hacks. For example, use a VPN and antivirus at the same time, download apps only from trusted sources, pay attention to and sensitise yourself to the app permissions you grant, watch out for spam and phishing emails, switch on two-factor authentication, use a difficult password that is not easily decrypted, and stay away from biometric security…etc
