ETF Industry’s Spiderwoman Spins New Web To Advance Bitcoin ETF blog post courtesy of extract from and Christopher Condon

Tyler and Cameron Winklevoss are fighting for approval from regulators for their proposed bitcoin exchange-traded fund. They stand a chance because Spiderwoman is on the case.

So nicknamed for her work on State Street Corp.’s “Spider,” the first ETF when it came to market in 1993, Kathleen Moriarty is the lawyer attempting to shepherd the Winklevoss Bitcoin Trust through the U.S. Securities and Exchange Commission. The twins, famous for their dispute with Facebook Inc. founder Mark Zuckerberg, aim to roll out the first ETF that invests in a virtual asset, an idea that has its skeptics.

“She brings instant credibility to a less-than-credible investment product,” Todd Rosenbluth, director of mutual fund and ETF research at S&P Capital IQ.

Moriarty, 61, who is 5-feet-1-inch tall with a silver bun of hair, has spent more than 20 years breaking ground in the fastest-growing segment of the money-management industry, guiding products to market such as the first hedge-fund replicator, the first physical commodity ETF and the first leveraged offering. She has built a reputation as the go-to lawyer for anyone seeking to sell an innovative ETF that regulators may scrutinize closely.

I’ve represented most everybody who’s done an unusual ETF,” Moriarty, a partner at New York law firm Katten Muchin Rosenman LLP, said in an interview at her office in Manhattan.

The Bitcoin Trust has already had an unusual journey. Katten Muchin’s executive committee initially rejected the idea of taking on the project because they believed bitcoins might be a Ponzi scheme. Moriarty asked the committee for four weeks to investigate. She came back convinced the virtual currency was “not an inherently fraudulent scheme,” and won their assent.

The world’s smartest investors are divided about bitcoins. While billionaire investor Warren Buffett, 83, has said he’ll be surprised if bitcoins last 10 or 20 years, Legg Mason Inc. stock picker Bill Miller and Michael Novogratz at private-equity firm Fortress Investment Group LLC have both said they’ve bought the virtual currency.

Moriarty declined to say exactly where the Bitcoin Trust stands with regulators beyond indicating the SEC staff is still reviewing and commenting on the proposal.

For any ETF, she said, the SEC first seeks to determine how to categorize its underlying assets, whether they are securities, a commodity, a currency or something else. It’s not clear to many where, exactly, bitcoins should fall.

“We think the closest thing is commodity money, like shells or deerskin,” Moriarty said.