According to Securities and Exchange Commission Chair Gary Gensler, the agency’s “new look” at applications for a spot bitcoin ETF has taken recent court rulings into account.
While the SEC has consistently denied previous applications for a spot bitcoin fund, a panel of judges ordering the regulator to reconsider a failed bid from Grayscale Investments may be tipping the scales. The agency is currently reviewing more than a dozen applications from major asset managers such as BlackRock and Fidelity.
“We had previously denied a number of these applications, but the courts here in the District of Columbia weighed in on that,” Gensler told CNBC on Thursday. “As a result, we’re taking a fresh look at this based on those court decisions.”
Three judges on the United States Court of Appeals for the District of Columbia Circuit ruled in August that the SEC must reconsider Grayscale’s bid for a spot bitcoin ETF after the asset management firm sued the agency last year after its plan to convert its flagship GBTC fund was rejected. The SEC’s differential treatment of spot bitcoin ETFs and similar funds based on futures contracts, which the regulator has approved, was specifically addressed by the court.
Gensler told lawmakers in September that he was reviewing the court’s decision as well as “multiple filings involving bitcoin exchange-traded products.”
According to Gensler, cryptocurrency is still rife with fraud
Gensler reiterated his belief that the crypto industry is rife with violations of existing securities laws.
“There’s been far too much fraud and bad actors in the cryptocurrency field,” Gensler told CNBC. “There’s a lot of noncompliance, not only with the securities laws, but other laws around anti-money laundering and protecting the public against bad actors there.”
Following calls in Congress and from the Treasury Department, the industry has focused on AML. Last month, Treasury recommended to lawmakers that it be given more authority and sanctions tools to go after illicit actors in the cryptocurrency industry.