United States Securities and Exchange Commission (SEC) Chair Gary Gensler has maintained the SEC’s cautious stance on Bitcoin (BTC), reiterating that the agency does not endorse the leading cryptocurrency despite recently approving 11 spot Bitcoin exchange-traded funds (ETFs) on January 10.
In a statement released just an hour after the historic approvals, Gensler emphasized that the SEC’s approval was specific to the listing and trading of certain spot Bitcoin ETF shares and did not constitute an endorsement of Bitcoin itself. He underscored the agency’s commitment to being “merit neutral,” refraining from taking a position on individual companies, investments, or the assets underlying an exchange-traded product.
Gensler drew attention to what he perceives as Bitcoin’s “speculative” nature, drawing a sharp contrast with precious metals like gold, silver, and platinum, which he views as having inherent utility. Despite acknowledging the regulator’s merit-neutral stance, Gensler pointed out his concerns regarding Bitcoin being frequently associated with illicit activities, such as ransomware, money laundering, sanction evasion, and terrorist financing. However, there is growing evidence countering these claims.
While cautioning investors about the myriad risks associated with Bitcoin and crypto-related products, Gensler reiterated the SEC’s perspective that the “vast majority” of crypto assets are essentially investment contracts, falling within the regulatory purview of the SEC. This view is reflected in the SEC’s ongoing lawsuits against major cryptocurrency exchanges Binance and Coinbase, where a total of 68 crypto assets are deemed by the regulator to be securities.
The SEC’s approval of 19b-4 applications from prominent entities, including ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton on January 10, marks a significant development in the regulatory landscape for crypto-related financial products. Despite this approval, Gensler’s remarks emphasize the SEC’s cautious approach toward Bitcoin and its classification as a speculative asset with potential risks that investors should carefully consider.