Crypto Mania

Gary Gensler’s Inconsistent Bitcoin ETF View

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During a panel discussion at the 2019 MIT Bitcoin Expo, Gary Gensler publicly criticized the United States securities regulator for its “inconsistent” approach to approving spot Bitcoin ETFs. This critique emerged from a resurfaced video of Gensler from 2019, which has recently regained traction on social media. In the video, Gensler, who was not yet the SEC Chair, engaged in a fireside chat with Hester Peirce, a United States Securities and Exchange Commission Commissioner, discussing blockchain regulation.

Gensler expressed his concerns, stating, “Bitcoin futures, Ethereum futures, and others will exist, but Bitcoin ETFs have not, and that feels a bit inconsistent to me. Even though the laws governing them aren’t exactly the same, they are quite similar.” This statement garnered attention, particularly on Twitter, where the crypto community highlighted the contrast between Gensler’s past views and the SEC’s current stance on spot Bitcoin exchange-traded funds (ETFs).

To date, the SEC has exclusively granted approval for Bitcoin and Ether futures ETFs. Since as far back as 2017, the SEC has consistently rejected applications for spot Bitcoin ETFs, a tradition that has persisted during Gensler’s tenure. Gensler has cited concerns about market manipulation protections as the reason for denying, delaying, or pushing back recent spot Bitcoin ETF applications. Notably, Gensler’s SEC faced legal action from asset manager Grayscale for rejecting its request to convert its existing Bitcoin trust into a spot ETF. The court ultimately ruled that the SEC’s rejection was “arbitrary and capricious,” a decision the SEC chose not to appeal.

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