Bitcoin Spot ETF: Why SEC Boss Gary Gensler Is Taking A ‘New Look’ At Applications

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In a recent interview with CNBC, the Securities and Exchange Commission (SEC) Chair Gary Gensler mentioned that the Commission is taking a “new look” at the pending Spot Bitcoin ETF applications. His comment suggests that the SEC may be looking to do things the right way now despite any reservations Gensler or the Commission might have about the crypto industry. 

Gensler’s Comment Suggests That SEC’s Hands Are Tied

Gensler stated that the SEC was taking a “new look” at these Spot Bitcoin ETF applications because of the court’s decision in the Grayscale case. He alluded to the fact that the Commission had, in the past, rejected similar applications but has had to reconsider its stance following the court’s intervention. 

The Court in the Grayscale case had adopted the asset manager’s argument that the spot and futures market are correlated. As such, this has forced the SEC to take another look at Grayscale’s application (and others possibly), as it can no longer reject these applications on the grounds of fraud and manipulation.

Gensler once again used the opportunity to elucidate his reservations about the crypto industry. According to him, there is a lot of noncompliance in the industry. This includes noncompliance with the securities laws, which he says are there to protect the interest of investors. The SEC Chair also mentioned that there is a lot of fraud and bad actors in the crypto field. 

Irrespective of his reservations, those hoping for a Spot Bitcoin ETF to be approved in January will, however, be buoyed by Gensler mentioning that these pending applications were currently going through a process. Recent developments suggest that this process seems to be going well as optimism continues to heighten. 

One of the most recent developments happens to be how four issuers met with the two SEC divisions responsible for approving these funds. Many believe that such a thing means that the Commission is more open to approval as far as there is strict compliance on the part of these issuers. 

Bitcoin price chart from Tradingview.com

BTC price rises above $42,000 | Source: BTCUSD on Tradingview.com

BlackRock Meets With The SEC For The Fourth Time For Bitcoin ETF

In a post on his X (formerly Twitter) platform, Bloomberg analyst Eric Balchunas highlighted the fact that the world’s asset manager, BlackRock, met again with the SEC regarding its Spot Bitcoin ETF application. This meeting was, however, different as it wasn’t the “normal crew.” Instead, it was more public policy staff from the asset manager meeting with Gensler’s staff. 

There is the belief that the discussion could have centered around BlackRock’s insistence on offering an in-kind model rather than a cash-creation model. The Commission seems to be in favor of the latter and is looking to get every issuer of a Spot Bitcoin ETF to comply with this. The analyst had even hinted that the Commission may only approve those that abide by this requirement. 

Featured image from Bankrate, chart from Tradingview.com



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