SEC Chairman Gensler Issues Crypto Investment Warning Amid ETF Application Surge
Summary:
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler prompted concerns on investing in crypto assets via a recent post on social media platform X (formerly Twitter). This comes amid asset managers awaiting approval for their spot Bitcoin ETF applications. Gensler warned that several asset managers may not be abiding by federal securities laws in offering cryptocurrency investment options. His comments were posted shortly after numerous Bitcoin ETF issuers lodged revised applications with the SEC. Despite no certainty, multiple prominent applicants are awaiting a decision.
Gary Gensler, the Chairman of the U.S. Securities and Exchange Commission (SEC), has taken to social media platform X (previously Twitter) to share some thoughts. This comes at a time when asset managers are eagerly awaiting a final decision on the sanctioning of their spot Bitcoin (BTC) exchange-traded fund proposals. On January 8, Gensler posted an implicit warning for those investing in cryptocurrency without explicitly referring to a Bitcoin ETF. He suggested that asset managers offering cryptocurrency investment options might not be abiding by federal securities laws. Furthermore, he emphasized that cryptocurrencies are inherently risky and prone to sharp fluctuations. He pointed to fraudulent activities such as sham initial coin offerings, Ponzi schemes, pyramid frauds, and outright robberies where schemers abscond with investors' funds, which are exploiting the increasing attention on digital assets.
Gensler's comments were posted around 3:40 pm UTC, roughly two hours after numerous Bitcoin ETF issuers lodged revised S-1 applications with the SEC, a key step towards potential approval in the US. While it's unclear at present, whether all or any of these will be approved at once, Valkyrie, WisdomTree, BlackRock, VanEck, Invesco and Galaxy, Grayscale, ARK Invest, 21Shares, Fidelity, Bitwise, and Franklin Templeton are among the applicants. Gensler has faced criticism for the SEC's reluctance to approve a spot crypto ETF, despite numerous applications over recent years. Canadian regulators, in contrast, began giving the green light to list spot Bitcoin ETFs on their exchanges in 2021.
The S-1 submissions made on January 8 were anticipated as part of a deadline enforced by the SEC, following multiple Form 19b-4 filings made on January 5. Although these actions suggest progress towards the acceptance of cryptocurrency ETFs on American exchanges, they do not confirm approval. The SEC retains the right to reject applications, which would likely be based on different grounds than earlier ETF denials. In August, a federal judge instructed the SEC to reconsider a spot Bitcoin ETF application from Grayscale, alleging that the SEC's rejection of this financial instrument had been "arbitrary and capricious.
Published At
1/8/2024 7:31:33 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.