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BitGo CEO Mike Belshe has expressed scepticism regarding the approval of spot Bitcoin ETF applications by the US Securities and Exchange Commission (SEC).Belshe’s concerns centre on the integration of exchanges and custody services in the crypto industry. He believes that the SEC is looking for a clear separation between these two functions to reduce the risk of market manipulation. This stance comes in the context of the SEC having already rejected over 20 Bitcoin ETF applications, primarily due to concerns about potential market manipulation and lack of adequate customer protection.Belshe points to risks associated with CoinbaseBelshe specifically pointed out risks associated with Coinbase, which has been chosen as a custody partner for several potential ETFs.He suggested that there are risks within Coinbase that are not well understood and that the SEC might require a full separation of exchange and custody functions before moving forward with any ETF approvals. Despite the general optimism in the industry and some analysts estimating high chances for ETF approval, Belshe’s remarks underscore the ongoing regulatory challenges and the SEC’s cautious approach to cryptocurrency-related products.Video Length: 00:01:57Belshe’s comments reflect broader concerns in the crypto industry about the regulatory landscape and the need for clearer guidelines and structures to gain regulatory approval for innovative financial products like Bitcoin ETFs. While some regulated crypto custody providers like Anchorage, BitGo, and Coinbase are independent of crypto exchanges, the debate continues on whether this separation is sufficient for the SEC’s approval of a Bitcoin ETF​.The persistent Bitcoin ETF rejectionsWhile some industry players are hopeful that regulated crypto custody providers like Anchorage, BitGo, and Coinbase, independent from exchanges, could pave the way for ETF approval, others remain sceptical. The scepticism stems from the SEC’s historical reluctance to approve crypto ETFs, even those based on assets traded on regulated exchanges.Despite growing industry optimism, over 20 Bitcoin ETF applications have faced rejection by the SEC. The primary reasons cited are potential market manipulation and insufficient customer protection, which resonates with Belshe’s view that the SEC is particularly wary of the dual role of exchanges as both trade facilitators and asset custodians.Belshe’s insights reflect the ongoing regulatory challenges in the crypto market. His comments underline the necessity for clear regulatory guidelines and structures, which are fundamental for the approval of innovative financial products like spot Bitcoin ETFs.More By This Author:Unionised Workers At Ford Have Ratified Its Deal With The UAWExpedia Vs Airbnb Stock: Mark Mahaney Picks A Side Nvidia Just Partnered With Dropbox On AI Tools