- The U.S. Securities and Exchange Commission chair, Gary Gensler, signaled a path to approve the exchange-traded dollar of bitcoin, a move that crypto enthusiasts say is crucial for taking tokens to the mainstream.
Gensler said that an SEC-compliant ETF could provide investors with necessary protections that they can trust. Speaking in his first major speech on cryptocurrencies, Gensler also signaled an openness to an ETF with a focus on Bitcoin Futures, provided exclusively by CME Group Inc. and require that investors put down substantial margin to trade
'Given these important protections, I look forward to the staff's review of such filings, particularly if those are limited to these CME-traded Bitcoin futures, he said in Tuesday remarks prepared for the Aspen Security Forum.
The SEC under Gensler and his predecessor Jay Clayton has repeatedly balked at pursuing green lighting a crypto ETF, with the agency raising concerns over transparency and potential for manipulation in Bitcoin cash market.
More Crypto Oversight by SEC Chairman Gensler to Protect Investors?
Almost all pending ETF applications have been filed under the 1930 s laws that allow stock exchanges to list goods. Gensler is hinting that he'd like to see a filing seeking approval through a 1940 law that govern mutual funds.
The distinction is not just academic. The law for mutual funds calls for far better shareholder protections and requires funds' boards to oversee investments closely, lawyers said. The additional demands include a mandate that funds have affiliated boards and a restriction on independent people trading shares in the ETF.
The added strictures can be a benefit for those hoping to list a product, but some may find them too burdensome, said David Grim, a partner in Stradley Ronon in Washington who had previously led the SEC's investment management division.
'It comes with costs, he said. If you have your kind of business model and your financing, maybe that's too much or that's not what you want to do.
Gensler's indices could add to a debate over whether cryptocurrencies are securities. That is because some existing ETFs that track commodities or currencies aren't regulated by brokerage regulators under the mutual fund rules. U.S. officials classify Bitcoin as commodity.
There are now at least half a dozen Bitcoin ETF applications before the SEC. In his speech, Gensler said that while he is interested in Blockchain technology and sees potential value in crypto, he plans to aggressively protect investors in the space.
'We just don't have enough investor protection in crypto, he said. It's more like the wild West.
The worries mirror concerns that Gensler laid out with Bloomberg Businessweek in an exclusive interview, where the SEC chief said he would not compromise on protecting investors in setting down a regulatory framework.