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SEC's Tentative Nod To Bitcoin ETFs
SEC approves first-ever spot bitcoin ETFs, revealing internal divisions and industry's mixed reactions.
The Securities and Exchange Commission (SEC) granted a historic yet hesitant approval to the first-ever US spot bitcoin exchange-traded funds (ETFs) yesterday, highlighting deep-seated divisions and skepticism within the agency over cryptocurrencies.
This week marked the beginning of trading for 11 spot bitcoin ETFs, including those sponsored by industry stalwarts like Fidelity and BlackRock, and digital-centric firms such as Grayscale and Ark Invest.
SEC's Decision: A Product Of Legal Compulsion
The SEC's decision, influenced by a US federal appeals court ruling last year, was delivered on the self-imposed final deadline of Wednesday. Gary Gensler, chair of the SEC, has been vocal about his view of the crypto market as a "Wild West" laden with non-compliance and misconduct. Despite the approval, Gensler was explicit in clarifying that the SEC's decision does not equate to an endorsement of bitcoin or crypto trading platforms, which he considers largely non-compliant with federal securities laws.
Mixed Reactions Within The Commission And Beyond
This groundbreaking move has sparked varied reactions. While the SEC's two Republican commissioners supported the decision, Hester Peirce criticized the SEC's delay and approach, and Mark Uyeda questioned the distinct standards applied to these ETFs compared to bitcoin futures ETFs. Conversely, Democratic commissioner Caroline Crenshaw opposed the approval, citing concerns over investor protection. Even industry giants like BlackRock expressed caution, emphasizing the offering as a means of quality access rather than a specific investment recommendation.
The Political And Financial Landscape Post-Approval
The SEC's approvals have also accentuated differences in the US Congress regarding crypto policy, with Democratic Senator Elizabeth Warren expressing strong disapproval. Meanwhile, Republican lawmakers, including House financial services committee chair Patrick McHenry, lauded it as a historic milestone. Despite this approval, a significant shift in the SEC's stance towards crypto seems unlikely, with ongoing enforcement actions and Gensler's insistence on the adequacy of existing laws for digital assets.
A Cautious Step Forward
In essence, while the approval of bitcoin spot ETFs marks a significant moment for the crypto sector, it does not signal a warming of the SEC's overall stance towards cryptocurrencies. The agency's actions and the varied responses from different stakeholders reflect a complex and evolving regulatory and investment landscape for digital assets in the US.
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