Despite the mounting pressure to approve a Bitcoin Exchange-Traded Fund (ETF) for trading on public markets, Securities and Exchange Commission (SEC) chairman Gary Gensler is keeping the agency’s next course of action under wraps.
On Monday, the SEC was ordered by the Court of Appeals to review Grayscale’s Bitcoin ETF application. Grayscale, the owner of the world’s largest Bitcoin fund, has plans to convert it into a spot ETF as soon as possible. Gensler indicated that he would wait for the SEC staff to make recommendations before making any decisions. “Those are things that are in front of staff,” he stated at the Securities Enforcement Forum event in Washington, as reported by CoinDesk. “Let that play out” and not prematurely judge the situation.
When questioned about the order in which the SEC would handle similar applications, Gensler did not provide a clear answer. Currently, the agency is reviewing a dozen spot Bitcoin ETF applications from prominent fund managers such as BlackRock, Fidelity, Franklin Templeton, and others. Grayscale has now re-entered the mix after the court’s order, following its previous legal victory against the SEC in August, with the agency choosing not to appeal the case. This victory has given the market confidence that approval for a spot ETF may be on the horizon.
Grayscale’s GBTC share discount has already narrowed to 14%, contributing to the bullish sentiment as Bitcoin reached a yearly high of $35,000 this week. Meanwhile, the SEC is simultaneously involved in an ongoing case against Ripple for its unregistered securities sale of XRP. The agency seeks a $770 million fine from Ripple for its institutional sales. However, earlier this month, the SEC dropped similar charges against Ripple’s co-founders.
Additionall, the SEC is pursuing lawsuits against major cryptocurrency exchanges Coinbase and Binance for alleged violations of securities laws. Gensler refrained from commenting on the ongoing cases, stating that he would let the legal process play out accordingly. Speaking at the event, Gensler emphasized the importance of SEC enforcement and criticized the crypto industry for being “rife with non-compliance.” He compared the trillion-dollar capital market to the relatively small crypto market, emphasizing that it accounts for less than one percent of the U.S. capital markets.
