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"Tuttle Proposes Leveraged Crypto ETFs, Sparking SEC Scrutiny"

Coin WorldTuesday, Jan 28, 2025 1:39 am ET

1min read

Tuttle Capital Management, a U.S.-based investment advisory firm, has submitted a series of innovative exchange-traded fund (ETF) proposals to the Securities and Exchange Commission (SEC), sparking concerns over potential "casino-type" speculation in the crypto market. The filings, which include leveraged ETFs tied to popular cryptocurrencies like Chainlink (LINK), Cardano (ADA), and Polkadot (DOT), aim to offer investors a way to achieve 200% of the daily performance of their reference assets.

The proposed ETFs, which are designed to deliver twice the daily returns—or potential losses—of their underlying assets, utilize complex financial instruments including swaps, call options, and direct investments. While these high-risk, high-reward opportunities may appeal to some investors, they also raise concerns about the potential for excessive speculation and market volatility. Bloomberg Intelligence analyst James Seyffart noted that these unusual proposals are a test of the limits of what the SEC is willing to allow.

The SEC's review of these filings comes at a critical juncture, as the agency undertakes a reevaluation of its stance towards cryptocurrency-related financial products. The recent leadership changes within the SEC, most notably the appointment of pro-crypto Acting Chair Mark Uyeda, have sparked optimism within the crypto community regarding the potential approval of these pioneering ETFs. However, industry experts urge caution, as sectors like meme coins may face heightened skepticism from regulators compared to established cryptocurrencies.

The crypto market has shown strong interest in Tuttle's proposals, further underscoring the industry's commitment to innovating investment solutions. Saravanan Pandian, CEO and Founder of KoinBX, remarked on the industry's efforts to meet diverse market demands, stating, "If these ETFs get approved, they could pave the way for new participants in the market, but the SEC needs to ensure risk mitigation and transparency is in place." This sentiment reveals the careful balance between fostering innovation and maintaining regulatory oversight.

Tuttle's filings join a growing list of crypto ETFs awaiting SEC review. Last week, Osprey and REX Shares filed for products tied to Dogecoin (DOGE), BONK, XRP, and Solana. As the SEC continues to evaluate these proposals, market watchers suggest additional ETF filings could soon follow, expanding the

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