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 Looks Forward to Staff’s Review of Bitcoin Futures ETF Filings
SEC Chairman Gary Gensler talked about crypto regulation and bitcoin exchange-traded funds (ETFs) at the Financial Times’ Future of Asset Management North America conference 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’ve started to see filings under the Investment Company Act [’40 Act] with regard to exchange-traded funds (ETFs) seeking to invest in CME-traded bitcoin futures,” 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 similarly said he looked forward to the staff’s review of ETF filings, “particularly if those are limited to these CME-traded bitcoin futures.”
He also emphasized at the conference on wednesday the need for investor protection. “This crypto space is now certainly of a size that without those investor protections of banking, insurance, securities laws, [and] market oversight, I do think somebody is going to get hurt. A lot of people are likely to get hurt,” Gensler was quoted by the Financial Times as saying.
The chairman has been urging crypto companies to come in and discuss whether they 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 lending product that the SEC threatened to sue over if it is launched. CEO Brian Armstrong called the securities watchdog’s behavior “sketchy.” The Nasdaq-listed company subsequently abandoned its plan to launch the product.
Gensler said Wednesday:
There are going to be times that people come in and we say: ‘Register.’ It’s not going to be everybody comes in and says: ‘Can you please tell us we are not a security.’
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