Gensler Cautions on Crypto with Spot Bitcoin ETF Approval Looming

Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), recently posted a thread on X, directed towards asset managers eagerly awaiting a verdict on their applications for spot Bitcoin exchange-traded funds (ETF).

On January 8th, Gensler advised those invested in cryptocurrency to be mindful of certain factors, without directly referencing a spot Bitcoin ETF.

He underscored that asset managers who are providing opportunities for crypto investment might be operating outside the scope of federal securities regulations. Gensler also emphasized the inherent risks and frequent fluctuation in value associated with crypto investments.

Fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams. These investments continue to be replete w/ fraud- bogus coin offerings, Ponzi & pyramid schemes, & outright theft where a project promoter disappears w/ investors’ money.

The SEC Chair delivered these remarks a few hours after various issuers of spot Bitcoin ETFs submitted their revised S-1 applications to the commission.

This step is among the final ones in the potential approval process for these investment vehicles in the United States. 

While it remains unclear whether the SEC will greenlight one or several applications simultaneously, submissions have been made by a range of entities including Valkyrie, WisdomTree, BlackRock, VanEck, Invesco and Galaxy, Grayscale, ARK Invest and 21Shares, Fidelity, Bitwise, and Franklin Templeton.

The S-1 filings made on January 8th were anticipated as they followed the SEC's deadline after several 19b-4 filings on January 5th.