SEC chair hints at no spot Bitcoin ETFs yet, but cites ‘careful consideration’ for future

Gary Gensler is the chair of the U.S. Securities and Exchange Commission. He has replied to a letter calling the regulator’s refusal to approve Bitcoin spot exchange-traded funds “unacceptable”.

Gensler, in a Tuesday letter to Tom Emmer, Minnesota Representative, suggested that the SEC chair was not closer to approval of a Bitcoin spot ETF in the United States. This would allow the regulator to prevent “fraudulent or manipulative acts and practices”. Gensler reiterated that he was technology neutral, but said he would “carefully consider” the November concerns raised by Emmer.

To our 11/3/21 email regarding BTC spot ETFs, we received a response by SEC Chair Gensler. This is a matter of high priority and we will continue to monitor the SEC’s mission to ensure fair and orderly markets, capital formation, and to facilitate capital formation.
— Tom Emmer (@RepTomEmmer), February 17, 2022

Gensler took over three months to reply to a letter by Emmer and procrypto Representative Darren Soto. Both advocates for approval of Bitcoin spot ETFs by the SEC. Soto called crypto “a driver for economic growth in the U.S.” and said it was “crucial that we clearly regulate it in an effort to maximize its potential benefits and minimize any risks.”

Emmer stated in a November letter that “The SEC’s approach to cryptocurrency regulation was unacceptable.” “While trading Bitcoin futures ETFs represents a significant step forward for millions of American investors, it doesn’t make sense that Bitcoin spot ETFs can’t also begin trading.”

Despite industry leaders and lawmakers criticizing the SEC’s inaction regarding holding back the United States from developing innovative investment vehicles, the SEC has yet to approve any Bitcoin spot ETF application submitted by a financial institution. Many companies submitted crypto strategy ETF applications to the SEC after Gensler suggested in August 2021 that they would accept ETFs based upon crypto futures and not through direct exposure. Since then, the commission approved ETFs that are linked to BTC futures of Valkyrie and VanEck.

Related: SEC Advisory Committee member calls for agency to open for public comments on crypto regulation

Companies are still submitting applications for crypto spot ETFs. The SEC has recently rejected those submitted by WisdomTree, SkyBridge, and Fidelity. In March, the regulatory body will likely make a decision about NYDIG’s spot Bitcoin ETF application.