Court Rulings: A Game-Changer?
Gary Gensler, Chair of the Securities and Exchange Commission (SEC), revealed on Thursday that the agency’s examination of spot bitcoin ETF applications now incorporates recent court decisions.
Despite the SEC’s historical denial of spot bitcoin fund applications, a panel of judges had instructed the regulator to reassess an unsuccessful bid from Grayscale Investments, potentially tilting the scales.
According to Gensler, “We had in the past denied a number of these applications, but the courts here in the District of Columbia weighed in on that…So we’re taking a new look at this based upon those court rulings.”
In August, the circuit court ruled that the SEC must reevaluate Grayscale’s spot bitcoin ETF bid after the asset management firm filed a lawsuit against the agency. The court specifically addressed the differential treatment of spot bitcoin ETFs and similar funds based on futures contracts, which the SEC has already approved.
Gensler informed lawmakers in September that he was reviewing the court’s decision while considering numerous filings related to bitcoin exchange-traded products.
A Plethora of Fraudulent Activities
Addressing concerns in the crypto industry, Gensler emphasized the prevalence of fraud and bad actors, citing noncompliance with securities laws, anti-money laundering regulations, and protection against malicious entities.
Gensler shared his views in an interview with CNBC, stating, “There’s been far too much fraud and bad actors in the crypto field…There’s a lot of noncompliance, not only with the securities laws, but other laws around anti-money laundering and protecting the public against bad actors there.”
In response to the ongoing issues, the Treasury recently proposed recommendations, urging lawmakers to provide enhanced authority and sanctions tools to combat illicit activities within the crypto industry.