In a Wednesday morning interview with CNBC, SEC Chair Gary Gensler once more emphasized that the January approval of the Bitcoin ETF did not signify an endorsement of the digital asset itself.
The U.S. Securities and Exchange Commission greenlit approximately a dozen spot Bitcoin ETFs last month. While enthusiasts of cryptocurrency viewed this as a surrender, Gensler clarified that this interpretation was inaccurate.
“We’ve seen analogous products in gold and silver ETFs, which are technically Exchange Traded Products (ETP). We’ve approved a batch of around 11 simultaneously before; this wasn’t the inaugural method to acquire or hedge risk associated with Bitcoin.”
“As we often say, we remain neutral on merit,” he elaborated. “This approval does not endorse the existing form of Bitcoin; it simply addresses the means of trading it through these Exchange Traded products.”
The SEC chair reaffirmed his position that most cryptocurrencies are unregistered securities, underscoring the agency’s duty to safeguard investors from fraudulent activities and market distortions.
“At the SEC, we bear the responsibility of educating investors, particularly regarding investments that fail to comply with securities or other commodity regulations,” Gensler stated. “In this context, we have a vast asset class of 15 to 20,000 crypto tokens, many of which—without making prejudgments—qualify as investment contracts or securities.”
Gensler countered the notion that trading stocks poses a similar risk to investing in cryptocurrency, asserting that regulations have mitigated much of that risk.
“This domain has been rampant with fraud and manipulation,” Gensler emphasized. “Just observe the multitude of bankruptcies; it’s not isolated to a single entity but a string of entities, leaving investors stranded in bankruptcy proceedings.”
While acknowledging the distributed technology supporting Bitcoin, Gensler emphasized the cryptocurrency’s involvement in illicit activities such as ransomware and money laundering.
Regarding the approval of Bitcoin ETFs by the SEC, Gensler cautioned that this doesn’t automatically guarantee approval for other cryptocurrency-based ETFs.
“What we did in January was specific to a particular set of filings,” he remarked. “We have additional filings under consideration, but I won’t speculate on the outcome. This is a matter for discussion and review by the five-member commission,” he concluded.
