In this CoinShares report, learn about how Gary Gensler, the current chairman of the Securities and Exchange Commission (SEC), strategically manipulated the regulatory process to put the SEC in a complex Administrative Procedure Act (APA) maze. This SEO-friendly description covers the details of Gensler’s tactics and their implications for the SEC.
SEC Faces Pressure to Approve Bitcoin ETF, Despite Opposition
The US Securities and Exchange Commission (SEC) is currently under scrutiny as it grapples with the decision to approve a bitcoin exchange-traded fund (ETF). While there is mounting political pressure to give the green light, there are opposing voices that argue for maintaining the current regulatory stance. CoinShares, a leading cryptocurrency investment firm, believes that the SEC is entangled in a self-created predicament.
The Court’s Verdict
In a recent court case, three judges representing different political inclinations unanimously ruled that the SEC had violated the Administrative Procedures Act (APA). They ordered the SEC to reconsider its dismissal of the Grayscale proposal for a bitcoin ETF. This court decision has added weight to the argument within the cryptocurrency industry that the regulatory framework needs revision instead of aggressive enforcement actions.
Townsend Landing, the product head at CoinShares, expressed this viewpoint in a recent blog post. Landing believes that the SEC is a victim of its own attempts to find a compromise with the crypto industry.
Gensler’s Support for ETFs
Notably, SEC Chairman Gary Gensler had previously expressed support for futures-backed ETFs, citing their potential to provide significant investor protection. He had publicly stated that he looked forward to the SEC’s review of such filings. However, CoinShares argues that it was Gensler’s early support for these types of ETFs that led the SEC into its current predicament.
“Indeed, it was Commissioner Gensler’s early support, expressed in various public speeches back in 2021, of futures-backed ETFs that trapped the SEC in an APA maze of its own making.”
The Future for the SEC
Although the SEC has the option to appeal the court’s decision, the chances of winning through an appeal seem limited. The unanimous ruling against the SEC and the lack of evidence presented to counter Grayscale’s claim of a 99% correlation between spot and futures markets weigh heavily against the regulatory body.
Furthermore, there is political pressure for the SEC to continue blocking a spot Bitcoin ETF. However, considering the interest of heavyweight firms like Blackrock, which have faced rejection for only one product proposal out of nearly 600 attempts, there may be increased political motivation to approve a bitcoin ETF.
In conclusion, the SEC is currently under pressure from both political and industry forces to make a decision regarding a bitcoin ETF. While some argue for maintaining the current regulatory stance, others insist on revising the legal framework. The court’s recent ruling and the lack of supporting evidence have further complicated the SEC’s position. It remains to be seen how the SEC will navigate this complex situation and whether it will ultimately approve a bitcoin ETF.