Gary Gensler, chair of the U.S. Securities and Exchange Commission, has responded to a letter from lawmakers calling the regulator denying approval of Bitcoin spot exchange-traded funds “unacceptable.”
In a Tuesday letter from Gensler addressed to Minnesota Representative Tom Emmer, the SEC chair hinted that the regulatory body was no closer to approving a Bitcoin (BTC) spot ETF in the United States capable of preventing “fraudulent and manipulative acts and practices” by the standards of the Exchange Act. Gensler reiterated his stance of being technology-neutral, but that he would give “careful consideration” to the concerns Emmer raised in November.
We received a response from SEC Chair Gensler to our 11/3/21 letter regarding BTC spot ETFs. This issue remains a priority for us and we will continue to oversee the SEC in its mission to maintain fair and orderly markets and facilitate capital formation. pic.twitter.com/WbgSDj7o0T
— Tom Emmer (@RepTomEmmer) February 17, 2023
Gensler took more than three months to respond to a letter from Emmer and pro-crypto Representative Darren Soto. The pair advocated for the SEC to approve Bitcoin spot ETFs, with Soto calling crypto “a driver of economic growth” in the U.S. and “crucial for us to clearly regulate it in order to maximize the potential benefits and mitigate any risks.”
“The SEC’s approach to cryptocurrency regulation has been unacceptable,” said Emmer in the November letter. “While the trading of Bitcoin futures ETFs is a great step forward for the millions of American investors who have been demanding regulatory clarity, it does not make sense that Bitcoin spot ETFs cannot also commence trading.”
To date, the SEC has not approved any Bitcoin spot ETF application from a financial institution despite some lawmakers and industry leaders criticizing the commission’s inaction for holding the United States back on innovative investment vehicles. However, after Gensler hinted in August 2023 that he would be more open to accepting ETFs based on crypto futures rather than through direct exposure, many companies filed crypto “strategy” ETF applications with the SEC. The commission has since approved ETFs linked to BTC futures from Valkyrie, ProShares, and VanEck.
Companies continue to put forth crypto spot ETF applications, with the SEC recently rejecting those from Fidelity, SkyBridge, and WisdomTree. The regulatory body is expected to reach a decision on NYDIG’s application for a spot Bitcoin ETF in March.