Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), commented on pending spot Bitcoin ETF filings on December 14.
When CNBC host Sara Eisen asked about the likelihood that these applications would be approved, Gensler responded:
‘We have… between eight and a dozen [spot Bitcoin ETF] files… And as you may know, we had denied some of these applications in the past, but the courts here in the District of Columbia have reconsidered that. And so we are looking at this again based on those court decisions.”
Eisen noted that the ruling in question involved Grayscale Investments, which earlier in 2023 won the right to have the SEC review an application through which it plans to convert its GBTC fund into a spot Bitcoin ETF.
Eisen added that many market participants see the Grayscale ruling as an indication that a spot Bitcoin ETF “could finally happen.” However, Gensler declined to comment on the likelihood of such an approval, stating today that he “cannot prejudge anything” as chairman of the SEC.
In addition to the Grayscale ruling described above, recent meetings between the SEC and several ETF applicants, plus applicants’ submissions of amendments during comment periods, have led to widespread optimism. Bloomberg ETF analysts Eric Balchunas and James Seyffart estimate that there is a 90% chance that the SEC will approve a spot Bitcoin ETF by January 10, 2024.
Gensler warns against non-compliance
Furthermore, Gensler highlighted high levels of non-compliance in the crypto industry, highlighting issues that are of major concern to regulators around the world. He claimed that there is “far too much fraud and bad actors in the cryptocurrency space,” noting that this includes non-compliance with securities laws, as well as non-compliance in other areas such as money laundering and public protection.
Gensler noted that his office has handled or litigated between 150 and 175 cryptocurrency cases. Explaining the extent of the impact, Gensler stated:
“This is a small part of our U.S. capital markets. But it can undermine confidence when so many people have been injured… This is something that is reflected in much of this field worldwide. And it’s hard for the actors who are in good faith to even compete because they’re there [are] so many challenges elsewhere.”
Gensler made similar comments to Bloomberg on December 13. At the time, he downplayed the significance of the crypto market while introducing new regulations for the larger U.S. Treasury market on the same day.