The United States Securities and Exchange Commission (SEC) Chairman, Gary Gensler, has once again renewed his support for the approval of Bitcoin Exchange-traded Funds (ETFs) in the country.
Gensler told the Financial Times’ Future of Asset Management North America conference that his main focus is on Bitcoin ETFs that invest in futures contracts and trade on the Chicago Mercantile Exchange under the 1940 Investment Company Act.
He disclosed that the Investment Act of 1940 offers significant protection for investors of mutual funds and ETFs, adding that those venturing into Bitcoin ETFs also deserve similar protection, especially against fraud and market manipulation.
Bitcoin ETF Approval Around the Corner
The SEC rejected numerous submitted Bitcoin ETF applications during the administration of Jay Clayton, but recent comments from Gensler gave applicants the notion that the regulator will soon approve such a product.
However, since Gensler disclosed that his administration would be open to seeing the first Bitcoin ETF go live in the U.S., none has yet been greenlighted by the commission.
While trying to keep applicants’ hopes alive, Gensler stated that he is looking forward to the agency’s “review of such [Bitcoin ETF] fillings,” which may likely be focused on applications that put the 1940 Investment Company’s Act into consideration.
The Long Wait for a Bitcoin ETF
Following the launch of Bitcoin ETFs in Canada and Brazil, the crypto space has been eager to see a similar product go live in the United States.
Although the SEC has received several applications in the past, including from VanEck, the agency has been reluctant to approve one due to concerns of potential market manipulation and fraud.
With Gensler’s appointment as SEC chair in April, many have hoped that there will be approval of a Bitcoin ETF in the United States.
Investors’ Protection is Paramount
While Gensler has always been open to Bitcoin ETFs, his main concern is on investors’ protection given the sad tales that have flooded the crypto market, which he believes can be avoided via the Investment Company Act of 1940.
“This crypto space is now certainly of a size that without those investor protections of banking, insurance[and] securities laws [and] market oversight, I do think somebody is going to get hurt. A lot of people are likely to get hurt,” he said.
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