In a recent CNBC interview, Securities and Exchange Commission (SEC) Chair Gary Gensler discussed the agency’s reconsideration of spot bitcoin exchange-traded fund (ETF) applications, emphasizing the influence of recent court rulings.
Historically, the SEC has consistently rejected applications for spot bitcoin funds. However, a pivotal moment occurred when a panel of judges, responding to a legal challenge from Grayscale Investments, mandated the SEC to reassess its denial of Grayscale’s bid for a spot bitcoin ETF. This development appears to have prompted the SEC to revisit its stance on spot bitcoin ETFs, with Gensler acknowledging the impact of the court rulings.
Gensler revealed that the agency is currently evaluating over a dozen applications from major asset managers, such as BlackRock and Fidelity, signaling a potential shift in the SEC’s approach to spot bitcoin ETFs.
“We had, in the past, denied a number of these applications, but the courts here in the District of Columbia weighed in on that,” Gensler stated during the CNBC interview. “So we’re taking a new look at this based upon those court rulings.”
The U.S. Court of Appeals for the D.C. Circuit played a crucial role in this reconsideration, ruling in August that the SEC must re-review Grayscale’s application for a spot bitcoin ETF. The court specifically addressed the SEC’s disparate treatment of spot bitcoin ETFs compared to funds based on futures contracts, the latter of which the regulator has previously approved.
Gensler also reiterated his concerns about noncompliance and fraudulent activities within the crypto industry. He emphasized the need for adherence to existing securities laws, as well as other regulations related to anti-money laundering. The SEC Chair acknowledged the prevalence of fraud and bad actors in the crypto space, emphasizing the importance of protecting the public.
Regarding anti-money laundering (AML), Gensler highlighted its increased significance within the crypto industry, particularly in response to calls from Congress and the Treasury Department. Last month, the Treasury Department submitted recommendations to lawmakers, seeking enhanced authority and sanctions tools to combat illicit activities in the crypto sector.
