In a media briefing on Wednesday, Securities and Exchange Commission (SEC) Chair Gary Gensler clarified that the agency’s recent approval of spot bitcoin exchange-traded products (ETFs) exclusively applied to bitcoin and not other cryptocurrencies. Addressing speculation about the potential approval of spot Ethereum ETFs, Gensler emphasized that the decision was specific to Bitcoin and should not be interpreted differently.
Bitcoin ETF Approval and Improved Disclosure
The SEC’s approval of Bitcoin ETFs on January 10 followed a D.C. court directive to re-review Grayscale’s spot Bitcoin ETF application. Gensler highlighted enhanced investor disclosure for Bitcoin funds, emphasizing the move to stock exchanges from over-the-counter markets, leading to increased competition and lower fees.
Crypto experts have been divided on the prospects of a spot Ethereum ETF, with some optimistic about a possible SEC approval as early as May. Major financial players like Fidelity and BlackRock have submitted spot Ethereum ETF applications in recent months.
Meanwhile, the SEC is actively involved in legal battles against crypto exchanges Binance and Coinbase. The agency accused Binance Holdings and its former CEO, Changpeng Zhao, of various offenses, including lying to customers and operating as an unregistered exchange. The SEC also asserted that 12 tokens on the platform, including BNB and BUSD, qualify as securities.
Coinbase, too, faced SEC litigation for allegedly functioning as an unregistered exchange, broker, and clearing agency. Gensler refrained from commenting on ongoing court proceedings, deferring to enforcement staff and litigators. However, he urged caution among investors, warning that crypto security tokens might lack proper disclosures, particularly from non-compliant operators.
In a separate development, the SEC recently implemented stringent regulations for Special Purpose Acquisition Companies (SPACs) with a 3-2 commission vote. These regulations aim to enhance legal responsibilities for SPACs, often criticized as “blank-check companies.” SPACs, designed to raise capital for acquiring private entities, have faced scrutiny for sidestepping traditional IPO regulatory standards.
The SEC’s latest moves underscore a growing focus on regulating various aspects of the cryptocurrency and financial markets, reflecting a commitment to investor protection and market integrity.
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