Introduction
The former head of internet enforcement at the U.S. Securities and Exchange Commission (SEC), John Reed Stark, has issued warnings about spot bitcoin exchange-traded funds (ETFs). Stark believes that these ETFs will create a massive investor scam and highlights their centralized nature. This article explores Stark's concerns and the current state of spot bitcoin ETF applications.
Spot Bitcoin ETF Warnings from Ex-SEC Official
John Reed Stark, currently the president of cybersecurity firm John Reed Stark Consulting, took to social media platform X to express skepticism about spot bitcoin ETFs. In his post, Stark stated that he does not view the approval of a spot bitcoin ETF as a positive development. He further warned that these ETFs would not only serve as fee-sucking scams but also represent the epitome of centralization within the crypto industry.
Current State of Spot Bitcoin ETF Applications
The SEC is currently reviewing 13 applications for spot bitcoin ETFs. Recently, the regulator held meetings with several applicants and requested them to file amendments to their filings by the end of the week. Additionally, the SEC asked these applicants to use the cash-creation method instead of the in-kind creation method. Blackrock, the world's largest asset manager, initially advocated for the in-kind model but failed to persuade the SEC. Consequently, the firm has now adopted the cash method.
Stark's View on Potential Approval
Citing reports of meetings between SEC officials and spot bitcoin ETF issuers, as well as discussions on the cash creation method, Stark believes that the SEC is likely to approve some form of spot bitcoin ETF. He finds it perplexing that the approval of such an ETF could become a significant aspect of SEC Chair Gary Gensler's legacy, as it goes against the sentiment within the crypto community.
Conclusion
Former SEC official John Reed Stark has voiced concerns about spot bitcoin ETFs, warning that they could lead to a major investor scam and represent a highly centralized form of crypto. The SEC is currently reviewing multiple applications for spot bitcoin ETFs, and Stark believes that the regulator is likely to approve some iteration of these ETFs. The final decision will have significant implications for the crypto industry and SEC Chair Gary Gensler's legacy.
What are your thoughts on John Reed Stark's statements regarding spot bitcoin ETFs? Share your opinions in the comments section below.
Frequently Asked Questions
What are the pros & con's of a golden IRA?
An Individual Retirement Account is a more beneficial option than regular savings accounts. You don't pay taxes on any interest earned. This makes an IRA a great choice for people who are looking to save money but don’t want to pay any tax on the interest earned. However, there are disadvantages to this type investment.
For example, if you withdraw too much from your IRA once, you could lose all your accumulated funds. Also, the IRS may not allow you to make withdrawals from your IRA until you're 59 1/2 years old. If you do decide to withdraw funds from your IRA, you'll likely need to pay a penalty fee.
The downside is that managing your IRA requires fees. Many banks charge between 0.5% and 2.0% per year. Others charge management fees that range from $10 to $50 per month.
If you prefer to keep your money outside a bank, you'll need to purchase insurance. In order to make a claim, most insurers will require that you have a minimum amount in gold. You might be required to buy insurance that covers losses up to $500,000.
If you are considering a Gold IRA, you need to first decide how much of it you would like to use. Some providers limit the number of ounces of gold that you can own. Others let you pick your weight.
Also, you will need to decide if you want to buy physical gold futures contracts or physical gold. The price of physical gold is higher than that of gold futures. Futures contracts offer flexibility for buying gold. Futures contracts allow you to create a contract with a specified expiration date.
Also, you will need to decide on the type of insurance coverage you would like. The standard policy doesn’t provide theft protection or loss due fire, flood, or earthquake. It does include coverage for damage due to natural disasters. You may consider adding additional coverage if you live in an area at high risk.
You should also consider the cost of storage for your gold. Storage costs will not be covered by insurance. Banks charge between $25 and $40 per month for safekeeping.
A qualified custodian is required to help you open a Gold IRA. A custodian helps you keep track of your investments, and ensures compliance with federal regulations. Custodians aren't allowed to sell your assets. They must instead keep them for as long as you ask.
After you've determined which type of IRA is best for you, fill out the paperwork indicating your goals. Information about your investments such as stocks and bonds, mutual fund, or real property should be included in your plan. The plan should also include information about how much you are willing to invest each month.
After filling out the forms, you'll need to send them to your chosen provider along with a check for a small deposit. After receiving your application, the company will review it and mail you a confirmation letter.
You should consult a financial planner before opening a Gold IRA. A financial planner can help you decide the type of IRA that is right for your needs. They can help you find cheaper insurance options to lower your costs.
How to open a Precious Metal IRA
First, you must decide if your Individual Retirement Account (IRA) is what you want. You must complete Form 8606 to open an account. For you to determine the type and eligibility for which IRA, you need Form 5204. This form should be completed within 60 days after opening the account. Once this has been completed, you can begin investing. You could also opt to make a contribution directly from your paycheck by using payroll deduction.
You must complete Form 8903 if you choose a Roth IRA. Otherwise, the process will look identical to an existing IRA.
To be eligible to have a precious metals IRA you must meet certain criteria. The IRS says you must be 18 years old and have earned income. You cannot earn more than $110,000 annually ($220,000 if married filing jointly) in any one tax year. Additionally, you must make regular contributions. These rules are applicable whether you contribute through your employer or directly from the paychecks.
An IRA for precious metals allows you to invest in gold and silver as well as platinum, rhodium, and even platinum. But, you'll only be able to purchase physical bullion. This means you won't be allowed to trade shares of stock or bonds.
You can also use your precious metallics IRA to invest in companies that deal with precious metals. This option is offered by some IRA providers.
However, investing in precious metals via an IRA has two serious drawbacks. First, they are not as liquid or as easy to sell as stocks and bonds. It's also more difficult to sell them when they are needed. Second, they are not able to generate dividends as stocks and bonds. So, you'll lose money over time rather than gain it.
Is the government allowed to take your gold
The government cannot take your gold because you own it. It is yours because you worked hard for it. It belongs to your. But, this rule is not universal. You could lose your gold if convicted of fraud against a federal government agency. If you owe taxes, your precious metals could be taken away. However, even if you don't pay your taxes, your gold can be kept as property of the United States Government.
Statistics
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- 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)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
External Links
forbes.com
- Gold IRA: Add some sparkle to your retirement nest egg
- Understanding China's Evergrande Crisis – Forbes Advisor
bbb.org
wsj.com
- Saddam Hussein's InvasionHelped Uncage a Bear in 1990 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Legal – WSJ
cftc.gov
How To
The best way online to buy gold or silver
First, understand the basics of gold. It is a precious metal that is very similar to platinum. It's very rare, and it is often used as money for its durability and resistance. It's hard to use, so most people prefer buying jewelry made out of it to actual bars of gold.
There are two types today of gold coins. One is legal tender while the other is bullion. Legal tender coins are designed for circulation in a country. They often have denominations like $1 or $5 or $10.
Bullion coins are only minted to be used for investment purposes. Their value increases over time because of inflation.
They are not exchangeable in any currency exchange system. If a person purchases $100 worth of gold, 100 grams of the gold will be given to him/her. The $100 value is $100. Each dollar spent by the buyer is worth 1 gram.
When you are looking to purchase gold, the next thing to know is where to get it. There are a few options if you wish to buy gold directly from a dealer. First, your local currency shop is a good place to start. You might also consider going through a reputable online seller like eBay. You can also look into buying gold online from private sellers.
Individuals who sell gold at wholesale and retail prices are called private sellers. Private sellers will charge you a 10% to 15% commission for every transaction. A private seller will usually return less money than a coin shop and eBay. This option can be a good choice for investing in gold because it allows you to control the price.
Another option for buying gold is to invest in physical gold. Physical gold is much easier to store than paper certificates, but you still have to worry about storing it safely. To ensure that your physical gold remains safe, you need to secure it in an impenetrable container such as a vault or safety deposit box.
A bank or pawnshop can help you buy gold. A bank can give you a loan up to the amount you intend to invest in Gold. The pawnshop is a small business that allows customers to borrow money to buy items. Banks tend to charge higher interest rates, while pawnshops are typically lower.
You can also ask for help to purchase gold. Selling gold is simple too. Contact a company such as GoldMoney.com, and you can set up a simple account and start receiving payments immediately.
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By: Kevin Helms
Title: Former SEC Official Raises Concerns Over Spot Bitcoin ETFs
Sourced From: news.bitcoin.com/former-sec-official-warns-spot-bitcoin-etfs-will-create-wall-street-fee-sucking-scam-of-epic-proportions/
Published Date: Thu, 28 Dec 2023 00:30:10 +0000
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