Gensler Refuses to Confirm Ethereum ETFs, Cites BTC Approval as Best Move After Legal Defeat

SEC Chair Gary Gensler has refused to commit to Ethereum exchange-traded funds (ETFs), saying that the approval of Bitcoin ETFs was simply the “most sustainable thing to do” after losing in court. The US Securities and Exchange Commission (SEC) approved the first Bitcoin ETFs on January 10, marking a significant milestone for the cryptocurrency industry. However, Gensler’s comments suggest that the approval of Ethereum ETFs may not be imminent.

 

Gensler stands firm on Ethereum ETFs, citing Bitcoin's sustainability

 

Gensler’s comments came during a pair of interviews on Wednesday, where he remained tight-lipped about the possibility of approving spot Ethereum ETFs. When asked about the timeline for approval, Gensler stated that the process would follow the same approach as Bitcoin ETFs. The SEC’s deliberate delay on multiple Ethereum ETF applications has frustrated investors and industry insiders alike, who argue that the SEC is stifling innovation and growth in the cryptocurrency market.

 

Key Takeaways

  • Gensler’s refusal to commit to Ethereum ETFs suggests that approval may not be imminent.
  • The SEC’s deliberate delay on multiple Ethereum ETF applications has frustrated investors and industry insiders.
  • The approval of Bitcoin ETFs marks a significant milestone for the cryptocurrency industry.

Regulatory Landscape and Court Decisions

 

Gensler stands firm on Bitcoin approval, hesitant on Ethereum ETFs. Court decisions and regulatory landscape in focus

The Role of SEC in Crypto Regulation

The Securities and Exchange Commission (SEC) is responsible for regulating the securities industry, which includes cryptocurrencies. The SEC has been closely monitoring the crypto industry and has taken several actions to regulate it, including filing lawsuits against companies that violate securities laws.

Gary Gensler, the current SEC Chair, has expressed concerns about the lack of oversight in the crypto industry. He has stated that he believes that the SEC should have more authority to regulate the industry and protect investors.

Impact of Court Rulings on ETF Approvals

The SEC has faced several lawsuits related to its approval of Bitcoin and Ethereum ETFs. In one recent case, Grayscale v. SEC, the court ruled against the SEC, stating that the agency had not provided sufficient evidence to support its decision to reject a Bitcoin ETF.

Gary Gensler has cited court rulings as a reason for his hesitation to approve Ethereum ETFs. He has stated that the SEC’s approval of Bitcoin ETFs was the “most sustainable thing to do” after losing in court.

One notable court ruling that impacted the SEC’s decision-making process was the decision by Judge Neomi Rao in the Grayscale v. SEC case. Judge Rao stated that the SEC had not provided sufficient evidence to support its decision to reject a Bitcoin ETF. This ruling has been cited by proponents of Ethereum ETFs as evidence that the SEC should approve these products.

Despite these court rulings, the SEC has continued to take a cautious approach to approving ETFs. Gary Gensler has stated that the agency will follow the same approach for approving Ethereum ETFs as it did for Bitcoin ETFs. This includes a thorough review of the product and its potential impact on investors.

Market Dynamics and ETF Implications

 

Gensler discusses market dynamics, no commitment to Ethereum ETFs. Bitcoin approval seen as most sustainable

Bitcoin ETFs Versus Ethereum ETFs

The SEC’s approval of spot Bitcoin ETFs has raised questions about the prospects of Ethereum ETFs. While Gary Gensler, the SEC chair, has not committed to approving Ethereum ETFs, he has stated that the approval of Bitcoin ETFs was the most sustainable thing to do after the regulator lost in court. This has led some investors to speculate that Ethereum ETFs may also receive approval in the near future.

However, there are some key differences between Bitcoin and Ethereum that could impact the approval of ETFs. For example, Bitcoin has a larger market share and more established use cases than Ethereum. Additionally, concerns over market integrity and investor protection have been raised in relation to Ethereum, as the market is more volatile and has a higher risk of fraud or manipulation.

Concerns Over Market Integrity and Investor Protection

The SEC has expressed concerns over the potential for fraud or manipulation in the Bitcoin market, which is why it has taken a cautious approach to approving ETFs. The regulator is likely to take a similar approach to Ethereum ETFs, given the market’s reputation for volatility and illicit activity.

Investors also have concerns over the potential risks associated with investment vehicles such as ETFs. Bankruptcies, money laundering, and fraud or manipulation are all potential risks that investors need to be aware of. Additionally, the use of Bitcoin futures products in ETFs could increase the risk of market manipulation.

Overall, while the approval of Bitcoin ETFs is a positive development for the crypto market, it remains to be seen whether Ethereum ETFs will receive approval in the near future. The SEC’s cautious approach to approving investment vehicles such as ETFs is driven by concerns over market integrity and investor protection, which are likely to remain a key consideration going forward.

By Jastra Kranjec

Jastra is an author at CryptoPresales. Over the years, she has worked in different fields of journalism and public relations, including politics, economy, crypto, and financial markets.