Original author: Gary Gensler, SEC Chairman
Original compilation: Odaily Planet Daily
Today, the U.S. SEC officially approved 11 spot Bitcoin ETFs including VanEck, Bitwise, Fidelity, Franklin, Valkyrie, Hashdex, Ark Invest, Grayscale, BlackRock, WisdomTree, and Invesco Galaxy.
SEC Chairman Gary Gensler released a Bitcoin spot ETF approval statement on the SEC’s official website. The SEC has approved a number of Bitcoin spot ETFs, the statement said. The Commission evaluates any rule submission from a national securities exchange based on whether it is consistent with the Exchange Act and its subordinate regulations, including whether the rule is designed to protect investors and the public Benefit. The committee is neutral in its evaluation process and does not express views on specific companies, investments or assets underlying exchange-traded products (ETPs).
Gensler further stated that this does not in any way mean that the Commission is willing to approve listing standards for crypto asset securities, nor does the approval indicate the Commission’s views on the legal status of other crypto assets under federal securities laws or the current situation of certain crypto asset market participants violating federal securities laws.
Below is Gary Gensler's full statement of approval
Today, the Commission approved the listing and trading of a number of spot bitcoin exchange-traded products (ETPs).
I have often said that the Commission acts in accordance with the law and the courts’ interpretation of the law. From the beginning of Jay Clayton’s term as Chairman in 2018 until March 2023, the Commission rejected more than 20 proposals for spot Bitcoin ETPs. One of these was proposed by Grayscale, which planned to convert the Grayscale Bitcoin Trust into an ETP.
We are now faced with a new set of applications that are similar to those we have denied approval in the past. However, circumstances have changed. The United States Court of Appeals for the District of Columbia held that the Commission failed to adequately explain its reasoning for denying the listing and trading of Grayscale's proposed ETP. As a result, the Court vacated the case and remanded the matter back to the Commission for reconsideration. Based on these circumstances and those more fully discussed in the Approval Order, I believe the most sustainable path forward is to approve the listing and trading of these Spot Bitcoin ETP shares.
The Commission evaluates whether any rule submitted by a national securities exchange complies with the Exchange Act and its regulations, including whether it is intended to protect investors and the public interest. The Commission is neutral and does not express an opinion on a particular company, investment, or ETP underlying asset. If the issuer of a security and the exchange on which it is listed comply with the Securities Act, the Exchange Act, and the Commission's rules, that issuer must be afforded the same access to our regulated markets as others.
Importantly, today’s Commission action is limited to ETPs that hold bitcoin, a commodity that is not a security. It should in no way indicate the Commission’s willingness to approve listing standards for crypto-asset securities. Nor does the approval indicate the Commission’s views on the status of other crypto-assets under the federal securities laws or on the current state of noncompliance of certain crypto-asset market participants with the federal securities laws. As I have said in the past, without prejudging any one crypto-asset, the vast majority of crypto-assets are investment contracts and therefore subject to the federal securities laws.
Investors today can already buy, sell, or otherwise gain exposure to Bitcoin at many brokerage firms, mutual funds, national securities exchanges, peer-to-peer payment applications, non-compliant crypto trading platforms, and, of course, through the Grayscale Bitcoin Trust. Today’s action will include certain protections for investors:
First, issuers of Bitcoin ETPs will be required to provide full, fair, and true disclosures about the products. Investors in any listed and traded Bitcoin ETP will benefit from the disclosures in the public registration statement and required periodic filings. While these disclosures are required, it is important to note that today’s action does not recognize disclosed ETP arrangements, such as custodial arrangements.
Second, these products will be listed and traded on a registered national securities exchange. Such regulated exchanges must have rules designed to prevent fraud and manipulation, and we will monitor them closely to ensure that they enforce these rules. In addition, the Commission will fully investigate any fraudulent or manipulative practices in the securities markets, including schemes that exploit social media platforms. Such regulated exchanges also have rules designed to address certain conflicts of interest and protect investors and the public interest.
In addition, existing rules and standards of conduct will apply to the purchase and sale of approved ETPs. For example, these include best interest regulation when broker-dealers recommend ETPs to retail investors and the fiduciary duties imposed on investment advisers under the Investment Advisers Act. Today’s action does not approve or endorse cryptocurrency trading platforms or intermediaries, which are largely noncompliant with federal securities laws and often have conflicts of interest.
Third, SEC staff are simultaneously completing the registration statement review of 10 spot Bitcoin ETPs, which will help create a level playing field for issuers, promote fairness and competition, and benefit investors and the broader market.
The agency has extensive experience regulating spot non-security commodity ETPs, such as those holding certain precious metals, since 2004. This experience will be valuable in our oversight of spot trading in Bitcoin ETPs.
Although we are neutral, I would point out that the underlying assets in metal ETPs have consumer and industrial uses, while Bitcoin, in contrast, is primarily a speculative, volatile asset that is also used for illegal activities, including ransomware, money laundering, sanctions evasion, and terrorist financing.
While we have approved the listing and trading of certain spot Bitcoin ETP shares today, we have not approved or endorsed Bitcoin. Investors should remain cautious of the myriad risks associated with Bitcoin and products whose value is tied to cryptocurrencies.
Original link
