Gary Gensler's Begrudging Bitcoin ETF Concession: 'We Did Not Approve or Endorse Bitcoin'

The SEC chair said a court forced his hand and that the agency's decision to greenlight a spot bitcoin ETF doesn't signal support of that or any other digital asset.

AccessTimeIconJan 10, 2024 at 10:07 p.m. UTC
Updated Mar 8, 2024 at 7:41 p.m. UTC
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U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler conceded that the regulator's loss in court over rejecting Grayscale's application for a spot bitcoin exchange-traded fund (ETF) left it little recourse but to approve about a dozen such proposals Wednesday.

Gensler called the approvals "the most sustainable path forward" in a statement issued just after the agency issued the decisions eagerly awaited by the crypto industry and investors.

For full coverage of bitcoin ETFs, click here.

"We did not approve or endorse bitcoin," Gensler said. "Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto."

In fact, he said that bitcoin "is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion and terrorist financing."

And Gensler sought to make it clear that these ETF sign-offs don't pave the way for any further action from the U.S. securities regulator.

"It should in no way signal the commission’s willingness to approve listing standards for crypto asset securities," he said. "Nor does the approval signal anything about the commission’s views as to the status of other crypto assets under the federal securities laws or about the current state of non-compliance of certain crypto asset market participants with the federal securities laws."

Bitcoin is the only digital asset that Gensler routinely acknowledges is not a security, maintaining that the vast majority of other tokens fit the legal definition of securities that are rightfully under the SEC's jurisdiction.

Crenshaw's Dissent: 'A wayward path'

Another of the five SEC commissioners, Caroline Crenshaw, dissented from the approvals.

"They put us on a wayward path that could further sacrifice investor protection," she said in a statement. "I cannot agree that these actions serve either our statutory or foundational investor protection mandates."

Commissioner Hester Peirce, a steady supporter of the crypto industry over the years, praised the decisions as "the end of an unnecessary, but consequential, saga." She said that "the only material change since we last denied a similar application was a judicial rebuke," referring to the SEC's loss against Grayscale in the U.S. Court of Appeals for the District of Columbia.

Edited by Marc Hochstein.


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Jesse Hamilton

Jesse Hamilton is CoinDesk's deputy managing editor for global policy and regulation. He doesn't hold any crypto.

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