The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, explains that some laws provide “significant investor protections” for exchange-traded funds (ETFs), including those seeking to invest in bitcoin futures. He looks forward to seeing the SEC’s review of such filings.
SEC Chairman Eagerly Awaits Staff Review of Bitcoin Futures ETF Deposits
SEC Chairman Gary Gensler spoke about the regulation of crypto and bitcoin exchange-traded funds (ETFs) at the Financial Times Future of Asset Management North America conference on Wednesday.
In prepared remarks, he discussed “investment vehicles providing exposure to crypto assets,” noting that “Earlier this year, a number of open-end mutual funds launched that invested in Chicago Mercantile Exchange (CME)-traded bitcoin futures.”
Gensler added: “Subsequently, we started to see deposits under the Investment Companies Act [’40 Act] with regard to exchange-traded funds (ETFs) seeking to invest in bitcoin futures contracts traded on the CME ”, elaborating:
When combined with the other federal securities laws, the ’40 Act provides significant investor protections for mutual funds and ETFs. I look forward to staff’s review of such filings.
In August, Gensler also said it looked forward to staff review of ETF deposits, “especially if these are limited to those bitcoin futures contracts traded by CME.”
He also emphasized at the conference on wednesday the need for investor protection. “This crypto space is now certainly of a size that without these investor protections from banking, insurance, securities laws, [and] market watch, I think someone is going to be hurt. A lot of people are likely to get hurt,” Gensler was quoted by the Financial Times as saying.
The president urged crypto companies to come and discuss the need to register with the SEC. Without naming specific platforms, he said, some companies have “said things publicly about some of those conversations.” Recently, Coinbase took to Twitter to talk about its loan product which the SEC has threatened to sue if it goes live. CEO Brian Armstrong called the securities watchdog’s behavior “sketchy.” The Nasdaq-listed company subsequently abandoned its plan to launch the product.
Gensler said on Wednesday:
There will be times when people come in and we say, “Sign up”. It’s not going to be everybody comes in and says: ‘Can you please tell us we are not a security.’
