US SEC Approves First Bitcoin ETF: Gensler's Unexpected Move Sparks Debate
Summary:
On January 10, the US SEC, under Chair Gary Gensler, approved a spot Bitcoin ETF for the first time. This unprecedented move raised queries on Gensler's future plans, who has often warned about crypto investment risks. In a voting session, Gensler, alongside Commissioners Hester Peirce and Mark Uyeda, favored the offerings, indicating a pivotal shift in decision-making. Despite the ETF approval, Gensler remains critical of cryptocurrency. The decision was deemed a "significant improvement" by some representatives. The potential impact on ongoing SEC lawsuits against crypto firms is still unclear.
After a preceding delay, the United States Securities and Exchange Commission (SEC), under the leadership of chairperson Gary Gensler, sanctioned a spot Bitcoin (BTC) exchange-traded fund for the initial time on January 10. This remarkable authorization of a spot cryptocurrency investment medium by the SEC sparked inquiries about Gensler’s prospective plans. Since assuming his position, Gensler has frequently highlighted the potential risks associated with crypto investments, linking digital assets to fraudulence and deceptive activities. However, during the SEC voting session on the spot Bitcoin ETF, he was among the three commissioners favoring the offerings. Along with Gensler, Commissioners Hester Peirce and Mark Uyeda cast their votes for the proposition while Caroline Crenshaw and Jaime Lizárraga expressed their disagreement. The 3-2 vote outcome indicated Gensler could have played a pivotal role in the decision. Post the exposure of this historic approval on January 10, Gensler maintained his essentially skeptical view of cryptocurrency, labeling BTC as a "speculative, unstable asset", and emphasizing that the approval of the ETF did not equate to an endorsement of Bitcoin by the SEC.
Following this, Cointelegraph tried to connect with Gensler’s office, but to no avail. While some internet users implied that the SEC chairperson "sided with Wall Street" as the surge in crypto products was anticipated to attract investment funds, others proposed that the SEC’s approval of a spot Bitcoin ETF was inevitable, considering the commission's mandate to reassess Grayscale’s offering had been issued by a federal court. Associated with this, Grayscale achieved success in its appeal in August, with the court concurring that the SEC had acted unreasonably in turning down the fund manager's ETF application. Answering this, if a spot Bitcoin ETF had been rejected by the SEC after the lawsuit resolution, it would have required stronger grounds, for instance, it could not merely cite risks of market manipulation and investor protection.
House Financial Services Committee representatives Patrick McHenry and French Hill described the SEC's decision as a "substantial step forward" compared to its previous method of regulating cryptocurrency through enforcement. The possible impact of the ETF's approval on ongoing lawsuits filed by the SEC against crypto companies, including Ripple, Coinbase, Kraken, and Binance, where the commission alleged numerous cryptocurrencies to be unregistered securities, remains uncertain.
Published At
1/11/2024 11:00:00 PM
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