Gary Gensler, chair of the US Securities and Exchange Commission, met the cryptocurrency community where they are on X (previously Twitter), hours after numerous issuers submitted provisional registration statements for bitcoin exchange-traded funds. Monday, Gary Gensler, chairman of the U.S. Securities and Exchange Commission, issued a warning to investors against investing in cryptocurrencies, as at least eleven Bitcoin ETFs were awaiting approval by the agency.
Those offering crypto asset investments/services may not be complying w/ applicable law, including federal securities laws. Investors in crypto asset securities should understand they may be deprived of key info & other important protections in connection w/ their investment.
Gensler wrote on X
1⃣ Those offering crypto asset investments/services may not be complying w/ applicable law, including federal securities laws. Investors in crypto asset securities should understand they may be deprived of key info & other important protections in connection w/ their investment.
— Gary Gensler (@GaryGensler) January 8, 2024
Analysts report that Gensler issued its warning approximately three hours after Grayscale, ARK/21Shares, BlackRock, Bitwise, VanEck, Wisdomtree, Invesco/Galaxy, Fidelity, Valkyrie, and Franklin Templeton filed their amended S-1 forms on Monday morning. This is the final step before the SEC decides whether to approve or reject the products.
Without referencing a particular Bitcoin ETF by name in his January 8 X post, Gensler advised crypto investors to bear in mind the following. Asset managers offering cryptocurrency investment vehicles “may not be complying” with federal securities laws, according to the chair of the SEC. Moreover, cryptocurrencies “can be exceptionally risky” and “often volatile.”
Numerous individuals and asset managers have criticized Gensler for the SEC’s denial of approval for a spot cryptocurrency ETF, despite years of applications. Commencing in 2021, Canadian regulators permitted firms to list spot Bitcoin ETFs on exchanges.
The SEC had anticipated the S-1 filings on January 8 as part of a deadline following the submission of numerous 19b-4 forms on January 5. Although both parties proposed that the SEC permit crypto ETF listings on U.S. exchanges, approval is not assured. Although the commission retains the prerogative to reject applications, it would presumably be required to do so on the basis of factors unrelated to those it applied to prior ETFs. The denial of Grayscale’s spot BTC ETF application by the SEC was deemed “arbitrary and capricious” by a federal magistrate in August, who ordered the SEC to reconsider the application.
