Bitcoin ETF Greenlit; SEC Chair Warns Crypto Is Still Risky

• SEC approves trading of first-ever spot Bitcoin exchange-traded funds (ETFs).
• SEC Chair Gary Gensler emphasizes non-endorsement of Bitcoin, calling it a “speculative, volatile asset” used for illicit activities.
• Gensler votes for approval alongside Republican commissioners, while Democratic commissioners Crenshaw and Lizárraga vote against.

The Securities and Exchange Commission (SEC) today approved the trading of the first-ever spot Bitcoin exchange-traded funds (ETFs). However, SEC Chair Gary Gensler, emphasized that this “does not approve or endorse Bitcoin,” calling it a “speculative, volatile asset” used for illicit activities.

Gensler’s approval comes after a years-long regulatory battle with the crypto industry. For years, the SEC has rejected attempts to list spot bitcoin ETFs, citing concerns about market manipulation and investor protection. 

However, a recent court ruling that criticized the SEC for rejecting Grayscale Investments’ ETF application prompted a re-evaluation of its stance. In an official statement, Gensler said:

I feel the most sustainable path forward is to approve the listing and trading of these spot bitcoin ETP shares.

Gensler, however, expressed clear reservations about the underlying asset. He contrasted Bitcoin’s “primarily speculative, volatile” nature with the “consumer and industrial uses” of precious metals like gold and silver, already traded through ETPs. In stark terms, he highlighted Bitcoin’s association with illicit activities including ransomware, money laundering, and terrorism.

Furthermore, the SEC isn’t throwing open the crypto doors despite the approval. Gensler emphasized, distancing the SEC from any endorsement of the cryptocurrency itself. “While we [SEC] approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin.”

Gensler reiterated that the Commission remains skeptical about most crypto assets, believing them to be securities subject to federal regulations. He also warned about the non-compliant nature of many crypto trading platforms, urging investors to exercise vigilance.

Despite being a prominent crypto skeptic and a Democrat, Gensler voted for approval alongside Republican commissioners Mark Uyeda and Hester Peirce. In contrast, Democratic commissioners Caroline Crenshaw and Jaime Lizárraga voted against the decision.

Crenshaw dissented on the spot Bitcoin ETF approval, citing concerns about market manipulation and investor protection. In contrast, Uyeda, though agreeing with the decision, raised three significant issues with the approval order. Meanwhile, “Crypto Mom” Pierce criticized the SEC’s delayed approval, highlighting the wasted opportunity for earlier acceptance.