SEC Approves Bitcoin ETPs, Ethereum ETFs Await Decision
SEC’s Gensler and the Possibility of an Ethereum ETF
Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), recently approved a series of Spot Bitcoin Exchange-Traded Product (ETP) shares. However, this decision may not necessarily apply to Ethereum Exchange-Traded Funds (ETFs).
The Limits of SEC Approval
According to Gensler, the commission’s approval is limited to ETPs that hold Bitcoin, a non-security commodity, and should not be understood as a general endorsement of cryptocurrencies or their underlying technology. Gensler stated in a media briefing that the SEC’s decision is solely related to Bitcoin and should not be extended to the entire crypto market.
Approval of Bitcoin ETFs
On January 10, the agency approved 11 Spot Bitcoin ETFs following a decision by a D.C. court panel of three judges. This panel forced the SEC to reevaluate Grayscale’s application for a Spot Bitcoin ETF. Gensler also commented on this, emphasizing that there is now better disclosure. The ETFs are now listed on exchanges instead of being traded in the Over-the-Counter market.
Gensler’s Skepticism Towards Crypto
Despite the approval, Gensler made it clear that the SEC’s action should not be seen as an endorsement of Bitcoin. He highlighted the risks associated with Bitcoin and crypto products, emphasizing the speculative nature of Bitcoin and its use in illegal activities such as ransomware, money laundering, sanction evasion, and terrorism financing.
The Future of Crypto Regulation
Gensler’s cautious tone also reflects the SEC’s commitment to protecting investors and the integrity of the market. He emphasized the importance of full, fair, and truthful disclosure by the sponsors of Bitcoin ETPs. These products are traded on registered national securities exchanges that have rules to prevent fraud and manipulation.
With major companies like Fidelity and BlackRock applying for a Spot Ethereum ETF, there is a glimmer of hope. In particular, there is speculation that Ethereum ETFs could be approved by May 2024.