Gary Gensler, the newly appointed chairman of the U.S. Securities and Exchange Commission (SEC) has recently hinted at the possibility of a Bitcoin exchange-traded fund (ETF). A bitcoin ETF has been much awaited in the United States with the crypto community waiting for a long.
Gensler’s comments came during his first major briefing on crypto regulations on Tuesday, August 3. The SEC Chairman noted that a Bitcoin ETF which can comply with the regulator’s strict rules for mutual funds can provide necessary investor protection.
Gary Gensler showed his openness towards a Bitcoin ETF that focuses exclusively on bitcoin futures offered by the Chicago Mercantile Exchange (CME). Gensler said:
“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”.
There have been multiple Bitcoin ETF applications currently pending SEC’s approval. Besides, the regulator has also rejected dozens of applications in the past. Time and again, the SEC has cited issues regarding transparency of this product along with issues of investor protection.
The laws with mutual funds have much stronger investor protection mechanisms. It requires the funds’ boards to have stricter oversight over the investments.
Will Cryptocurrencies Be Treated As Securities?
Gensler’s recent comments about Bitcoin ETF lead us into thinking about whether if cryptocurrencies will; be treated as securities. This is because the existing ETFs tracking currencies and commodities aren’t regulated under any mutual fund rules. As per the brokerage regulators in the U.S. Bitcoin already enjoys the commodity status.
It will be interesting to see how the SEC chairman proceeds with this! On Tuesday, August 3, the SEC chairman called for stricter regulations of digital currencies. Speaking before the Aspen Security Forum, Gensler said:
“Right now, we just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West. This asset class is rife with fraud, scams, and abuse in certain applications. If we don’t address these issues, I worry a lot of people will be hurt”.