• Tue. Apr 23rd, 2024

SEC Chair Gensler Signals Fresh Approach to Bitcoin Spot ETF Applications

Walter Swift

ByWalter Swift

Dec 17, 2023
The US Government Is Targeting Crypto And Crypto Firms

Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), stated in a CNBC interview that the SEC is taking a fresh look at the applications for Bitcoin Spot Exchange-Traded Funds (ETFs). This new approach, discussed at the SEC headquarters, hints at a potential shift in the regulatory landscape for cryptocurrency, especially regarding the long-debated Bitcoin Spot ETFs.

SEC Revisits Bitcoin ETF Decisions Following Key Court Ruling

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Gary Gensler recently explained that the SEC’s renewed examination of Spot Bitcoin ETF applications is largely due to a pivotal court ruling in the Grayscale case.

In this case, the court agreed with the asset manager’s argument that there is a significant correlation between the spot and futures markets. This decision has compelled the SEC to reconsider its previous rejections of such applications, which were initially based on concerns of fraud and manipulation.

Gensler took this opportunity to reiterate his concerns about the cryptocurrency industry. He pointed out the widespread issues of noncompliance with securities laws, which are designed to protect investors. Furthermore, he emphasized the prevalence of fraudulent activities and the presence of bad actors within the crypto space, underlining the challenges the SEC faces in regulating this evolving industry.

Despite his reservations, SEC Chair Gary Gensler’s acknowledgment that the pending Spot Bitcoin ETF applications are actively undergoing a review process has sparked optimism among those awaiting their potential approval. Recent developments indicate a positive trend in this process, heightening the anticipation of a favorable outcome.

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A notable recent event in this saga is the meeting between four issuers and the two SEC divisions responsible for the approval of these funds. This interaction is seen by many as a sign of the Commission’s openness to approving these ETFs, provided that the issuers adhere strictly to compliance regulations. This development marks a significant step in the ongoing journey towards the possible approval of Spot Bitcoin ETFs.

BlackRock and SEC Deliberate on ETF Models in Key Meeting

BlackRock’s latest engagement with the SEC marks a significant moment in the ongoing discussions around the approval of a Spot Bitcoin ETF. Eric Balchunas, a Bloomberg analyst, shared on his X (formerly Twitter) platform that this wasn’t just another routine meeting. Unlike previous occasions, this time, it involved public policy staff from BlackRock engaging with members of Gensler’s team at the SEC.

The focus of this meeting is believed to have revolved around BlackRock’s preference for an in-kind model for their Spot Bitcoin ETF, as opposed to the cash-creation model favored by the SEC. The Commission’s stance leans towards the latter, with an expectation for all issuers of Spot Bitcoin ETFs to adhere to this model. Balchunas suggested that the SEC might only greenlight ETFs that comply with this specific requirement, indicating a critical juncture in the approval process of such financial products.

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Walter Swift

Walter Swift

Walter Swift is an adept crypto writer, known for his deep insights into the decentralized world. His pieces artfully break down complex blockchain topics, making them accessible to a broad audience. With a passion for emerging technologies, Walter's articles are a beacon for crypto enthusiasts and novices alike.

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