• 29 May, 2024

SEC Chairman’s Past Critique Resurfaces Amidst Crypto ETF Debate

In a twist of fate, a resurrected video from 2019 has brought to light the SEC Chairman Gary Gensler’s previous criticism of the agency’s “inconsistent” stance on spot Bitcoin ETF approvals, a position he now oversees. The timing couldn’t be more pertinent as discussions surrounding the credibility and potential of cryptocurrency ETFs reach a boiling point.

The resurfaced footage showcases Gensler, in his pre-SEC days, addressing blockchain regulation during the 2019 MIT Bitcoin Expo in a candid conversation with United States Securities and Exchange Commission Commissioner Hester Peirce. In the video, Gensler stated:

Bitcoin futures, and I think Ethereum futures and so forth, will exist, and Bitcoin ETFs have not, and that feels a little inconsistent to me. It feels a little inconsistent.

On X (formerly known as Twitter), the cryptocurrency community wasted no time juxtaposing Gensler’s past comments with his present stance on spot Bitcoin exchange-traded funds (ETFs). Market pundits and crypto fans seized the opportunity to underscore the divergence between Gensler’s prior and current viewpoints. In a recent X post, Noted market analyst Zack Voell wryly said, “Gary Gensler says Gary Gensler is wrong.”

Regulatory inconsistency remains a significant hurdle for the approval of crypto ETFs. However, the recent resurgence of Chairman Gensler’s 2019 statements might prompt the SEC to revisit its policy regarding crypto ETFs. Currently, there are 8-10 spot Bitcoin ETF applications awaiting review. Recent remarks from Chairman Gensler have ignited hope that the U.S. could soon experience its inaugural sanctioned Bitcoin ETF.

The SEC has maintained its tradition of rejecting spot Bitcoin ETF applications since as early as 2017, a stance that Gensler has continued. He has consistently denied, postponed, or deferred recent spot Bitcoin ETF submissions, citing concerns over inadequate safeguards against market manipulation.

Notably, Gensler’s SEC was embroiled in a legal battle with asset manager Grayscale after rejecting its proposal to convert its existing Bitcoin trust into a spot ETF. A court ultimately determined that the SEC’s rejection was “arbitrary and capricious,” and the SEC opted not to contest the ruling.

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