GAO Recommends Three Key Strategies to SEC for Spot Bitcoin ETF Approval
Summary:
The U.S. Government Accountability Office (GAO) has suggested three operational strategies to the SEC before approving a spot Bitcoin ETF. The recommendations encompass creating a new workforce plan, documenting procedures for the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub), and establishing measurable goals for the hub. The GAO stressed the need for a new workforce strategy since the SEC hadn't updated its plan since 2019-2022 and found that the FinHub lacks documented procedures. Post-review, the GAO offered three execution plans and launched a live status feature to highlight the SEC's actions regarding the suggestions. The SEC then approved 11 spot Bitcoin ETF applications, leading to record trading volumes.
The United States Government Accountability Office (GAO), a neutral audit institution affiliated with the U.S. federal government, has suggested three primary operational strategies for the Securities and Exchange Commission (SEC) to adopt before authorizing a spot Bitcoin exchange-traded fund (ETF) on January 10. These recommendations relate to managing human resources for the digital asset market and the agency's forthcoming approach to the evolving sector.
The GAO publicized the recommendations that were sent to the SEC on December 15 on January 16. The report encourages the SEC to compile a fresh workforce design, lay out policies and measures for the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub) internal operations, and set performance objectives and standards for the said hub. Regarding the SEC's preparedness to handle the emerging crypto industry, the GAO indicated that the SEC employs 116 individuals primarily involved with crypto asset affairs. They underscored that the SEC hadn't developed a new workforce plan since its 2019-2022 strategy, and updating the strategy would better equip the SEC in fulfilling the future needs of the workforce and executing oversight and policymaking duties over crypto assets.
The GAO review also identified that the SEC's FinHub, which coordinates oversight of emerging technology within the agency, doesn't possess recorded policies, operations, or performance aims. While some operating routines are in place within FinHub, no documented outline supports its internal control systems.
After the analysis, three key operational plans were suggested by GAO:
1. The SEC leader should work with the chief human capital officer to devise a new workforce plan compatible with the agency’s strategic and performance plans for 2022-2026.
2. The SEC leader should ensure the director of the Strategic Hub for Innovation and Financial Technology produces the supporting documentation for its policies and procedures for internal controls.
3. The SEC chair should ensure the Strategic Hub for Innovation and Financial Technology director creates measurable, objective performance goals and measures.
The GAO has also introduced a live status feature against each suggestion to signpost whether suitable actions have been taken by the SEC concerning the recommendations.
On January 10, the SEC approved 11 spot Bitcoin ETF applications in a historic ruling, with an internal document revealing approval was secured by three votes to one. Notably, SEC chief Gary Gensler cast the defining vote that led to the first US spot BTC ETF approval following approximately five years of refusals.
Peter Schiff, a known Bitcoin critic, has stated that the SEC chief was cornered regarding the approval of the spot Bitcoin ETF. He also cautioned that Gensler might "soon introduce new burdensome crypto regulations that will substantially increase the cost of Bitcoin transactions, further undermining its ‘use ’ case, resulting in a sharp price drop.”
The day following the approval, all spot BTC ETFs commenced public trading, raking in unprecedented volumes surpassing $2 billion on the debut day.
Published At
1/17/2024 12:14:53 PM
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