The United States Securities and Exchange Commission (SEC) has again postponed its decision concerning spot Bitcoin ETFs. This time, the deferred applications belong to investment management behemoth Blackrock. Moreover, Invesco, Valkyrie, and Bitwise have also seen their crypto initiatives put on hold.
Most of these firms had initiated their applications for a spot Bitcoin ETF in June 2023. The first postponement from the SEC surfaced in late August 2023. In their recent declaration, the SEC mentioned, “The Commission is instituting proceedings… to determine whether the proposed rule change should be approved or disapproved.” The SEC emphasized that this move doesn’t imply any predetermined conclusions.
Interestingly, this announcement came on the heels of a robust interrogation of Gary Gensler, the SEC Chairman, during a Congressional hearing. At the Wednesday (27 September) session, Gensler maintained his cautious perspective on the crypto arena. The SEC chief also took a critical stance on crypto firms, highlighting concerns over managing client funds. He noted the mingling of funds as a precarious approach, potentially leading to undesired outcomes.
Such remarks are particularly resonant, given the impending court appearance of Sam Bankman-Fried, ex-CEO of the now-defunct FTX crypto exchange. After revelations in November 2022 about FTT, its exchange token, constituting a substantial part of its balance sheet, the exchange declared bankruptcy. Subsequent revelations about funds commingling between Alameda and FTX further fueled controversies.
Furthermore, Gensler confirmed Bitcoin [BTC] isn’t classified as a security. However, he refrained from labeling it as a commodity. He also touched upon the SEC’s noncompliance with the court’s directive regarding its Grayscale verdict.
Grayscale had aimed to transform its GBTC into a spot Bitcoin ETF, a move that faced rejection. This decision faced legal scrutiny, with a Judge branding the refusal as “arbitrary and capricious.”
Addressing this, Gensler remarked, “It’s still an active consideration of the commission,” and professed the SEC’s profound respect for the judicial system.
