Gary Gensler, the U.S. Securities and Exchange Commission’s Chair, recently sparked discussions with a post on social media platform X, formerly known as Twitter. This comes at a crucial time, as numerous asset managers eagerly anticipate the SEC’s decision on their Bitcoin ETF applications.
Gensler’s January 8th post didn’t directly mention Bitcoin ETFs, but it contained a clear message for crypto investors. He warned that some asset managers offering crypto investments might not be fully adhering to federal securities laws. He emphasized the high risk and volatility inherent in crypto investments. “Beware,” he cautioned, “of the rampant frauds and scams in this sector, including fake coin offerings and Ponzi schemes.”
This statement came just hours after several Bitcoin ETF hopefuls, including big names like Valkyrie, WisdomTree, and BlackRock, updated their S-1 applications with the SEC.
2⃣ Investments in crypto assets also can be exceptionally risky & are often volatile. A number of major platforms & crypto assets have become insolvent and/or lost value. Investments in crypto assets continue to be subject to significant risk.— Gary Gensler (@GaryGensler) January 8, 2024
This step is seen as pivotal in the potential approval of these investment vehicles in the U.S. The list of applicants is extensive, featuring Grayscale, ARK Invest, and even Fidelity.
There’s a notable backdrop of frustration with the SEC. Many have criticized Gensler’s SEC for its hesitance in approving a crypto ETF, despite years of applications from various asset managers. This contrasts with Canada’s more open stance, where spot Bitcoin ETFs have been listed since 2021.
Bitcoin ETF Filings
The January 8 S-1 filings, following the 19b-4 filings earlier on January 5, signal a possible shift. They hint at the SEC’s readiness to consider crypto ETF listings in U.S. markets. However, this doesn’t guarantee a green light.
The SEC retains the power to reject these applications, though it would need new grounds for denial. This requirement comes after a federal judge’s ruling in August, which challenged the SEC’s rejection of Grayscale’s Bitcoin ETF application as “arbitrary.” This ruling adds a twist to the narrative, suggesting that the SEC’s previous reasons for denying ETFs may no longer hold water.
As the crypto and financial worlds wait with bated breath, Gensler’s cryptic message adds layers to an already complex and evolving saga of cryptocurrency regulation and acceptance in the mainstream financial world.