Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
The SEC boss has doubled down on support for a Bitcoin futures ETF despite not yet approving multiple applications that had been already submitted.
Chairman of the securities and exchange commission (SEC), Gary Gensler, is reiterating his support for a Bitcoin futures exchange-traded fund (ETF). The SEC is currently reviewing ETF filings for several Bitcoin and Bitcoin futures products. So far, the agency is yet to make any approvals. Gensler made his support known on Wednesday in remarks prepared for a Financial Times conference. The conference was titled “Future of Asset Management North America Conference.”
The Commission head also noted some open-end mutual funds’ investments. According to Gensler, these funds’ investments are in Bitcoin futures traded on the Chicago Mercantile Exchange (CME). Furthermore, he also made reference to a 1940 law which states “significant investor protection” for mutual funds and ETFs.
Last month, Gensler first revealed his intention to support Bitcoin futures ETF if approved under the 1940 law. There, the regulatory chairman suggested that Bitcoin funds could come to the market under certain prescribed conditions. This stance apparently did not sit well with several Bitcoin fund managers. Their grievance was that futures ETFs have a worse performance even though they tend to be more expensive.
The SEC Support for Bitcoin ETFs Comes amid Agency’s Repeated Calls for More Crypto Oversight
The Commission’s wariness to the digital assets is well documented. It has repeatedly called for increased oversight over the crypto space, even going as far as lobbying members of Congress. The SEC’s concern over digital assets is that it can be a breeding ground for all manner of financial impropriety without adequate supervision. These include money laundering, embezzlement, to name a few. In addition, it also exposes classified details of users to crypto hackers who might attempt to use it for unsavory purposes. Gensler also particularly mentioned stablecoins as a potential medium by users to circumvent traditional banking rules. Some of these said rules include anti-money laundering, tax compliance, sanctions, and others. His argument is that because stablecoins tie directly to assets like fiat money, it is the preferred choice for many users in crypto-to-crypto trades.
Gensler believes that all virtual products are subject to securities laws. He further explains that any products providing synthetic exposure to underlying securities should come under institutional regulation.
The SEC Has a Long-running History of Locking Horns with Crypto Exchanges
The SEC also recently had disputes with a few crypto exchanges over information submitted. The most identifiable of such disputes is with Ripple over its network’s employee communications history on Slack. The Commission filed a motion last month in court alleging that Ripple is yet to submit further Slack information. The regulatory agency further stated it received insufficient information from Ripple and that the exchange is withholding further data.
Another example of the SEC locking horns with a crypto exchange, was with Coinbase. Earlier this month, the regulatory agency threatened to sue Coinbase over its proposed crypto lending scheme. The SEC served Coinbase with a Wells Notice, a document signifying the Commission’s intent to sue. Coinbase, in its own defense, stated they did not receive adequate governing guidelines from the SEC.