By George Ward
Gensler’s 2019 Stance
The current chairman of the United States Securities and Exchange Commission (SEC), Gary Gensler, criticized the agency for its “inconsistent” handling of spot Bitcoin (BTC) products in a video that was recently discovered to be from 2019. The video, which has been trending again on social media, shows Gensler talking about blockchain regulation with SEC Commissioner Hester Peirce at a fireside chat during the 2019 MIT Bitcoin Expo.
In the discussion, Gensler underlined the need for a unified regulatory framework for newly emerging digital assets, especially concerning spot Bitcoin products. He also raised concerns about the non-uniform set of rules and guidelines that had been followed, emphasizing the possible dangers associated with this disjointed strategy.
Given that Gensler is currently the head of the SEC and has enormous influence over cryptocurrency regulation in the US, his remarks from 2019 have gained significance.
Gensler’s Contrasting Positions
In the video, the SEC chair voiced concerns about the disparity in approving different cryptocurrency investment products. Gensler also expressed his displeasure with the approval of Bitcoin futures products, given that Bitcoin exchange-traded funds (ETFs) are still awaiting approval.
Gensler noted that the scenario is disjointed, emphasizing the need for a more cohesive regulatory strategy. While he concedes that the legal systems governing these products may differ, he argues that there are enough similarities to justify a more unified regulatory approach.
However, observers have pointed out the disparity between Gensler’s present stance and his earlier comments on spot Bitcoin ETF approvals. Another X user expressed the need for a more relaxed regulatory framework, aligning with Gensler’s 2019 stance.
Meanwhile, the SEC has already approved Bitcoin and Ether (ETH) futures ETFs, while spot Bitcoin ETFs are still awaiting regulatory approval.
Court Challenges SEC’s Bitcoin ETF Stance
The SEC has been rejecting applications for spot Bitcoin exchange-traded funds (ETFs) over the past six years. This tradition has continued under the leadership of Gensler, who has continued to deny, delay, or postpone fresh spot Bitcoin ETF approval requests, saying that it is worried about inadequate market manipulation safeguards.
Recall that Grayscale Asset Management recently attempted to transform its existing Bitcoin trust into an ETF, which the regulator declined. Grayscale took legal action following the SEC’s rejection, which resulted in a recent court ruling that deemed the SEC’s decision “capricious.”
According to many industry analysts, the court’s decision represents a significant challenge to the SEC’s previous stance on spot Bitcoin ETFs. It is making the regulator reconsider its approach to the approval of these investment products. It also underscores the growing pressure on the SEC to establish more explicit guidelines and criteria for approving such funds.
Remarkably, the SEC declined to appeal the court’s decision, indicating a possible shift in its approach to performing oversight functions over Bitcoin ETFs. This development has attracted the interest of market participants in the cryptocurrency and traditional financial sectors, who now anticipate an updated regulatory policy.