No Clarity On Crypto Bill From SEC Chair Gary Gensler

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Key takeaways:

  • Gary Gensler Opposes FIT21 Act Amid Anticipation for Spot Ethereum ETF Approval
  • Major financial firms, including BlackRock and Fidelity, have updated their ETF filings in anticipation of potential approval.

In a significant statement, U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler expressed his opposition to the Financial Innovation and Technology for the 21st Century Act, or FIT21 Act. 

This announcement comes at a critical time when the White House has reiterated its eagerness to develop new digital asset policies aimed at protecting investors. 

Gensler, a key regulator appointed by President Joe Biden, insists that existing laws already provide the SEC with ample authority to oversee the crypto market, contradicting other U.S. regulatory bodies and the Treasury Department.

Investors are keenly watching this decision, especially after the agency pivoted on Bitcoin ETFs following a court’s recommendation to reconsider Grayscale’s request to convert GBTC to a spot Bitcoin ETF. 

Gensler has also emphasized the SEC’s successful enforcement actions against major crypto companies like Binance, Coinbase, and Kraken, which have faced allegations of violating securities laws.

Lawmakers have hinted at the possibility of extending ETF considerations to other digital assets beyond Ethereum, potentially including Solana (SOL). Analysts predict that a spot Solana ETF could attract significant demand, trailing only Bitcoin and Ethereum.

Earlier this year, the launch of a Bitcoin ETF spurred increased interest in a spot Ethereum ETF. The SEC’s impending decision on this matter is generating buzz within the crypto community, with some analysts projecting that an ETF approval could boost Ethereum’s price by 60%.

Gensler’s main argument against the FIT21 Act centers on his belief that it would undermine the classification of crypto assets as investment contracts, thus removing them from the SEC’s oversight and hindering investor protection efforts. 

While federal courts have often sided with the SEC on crypto matters, they have yet to provide a consistent framework for determining whether tokens should be treated as securities. 

In the midst of this regulatory and legal uncertainty, major players in the financial industry, including BlackRock Inc., Fidelity, VanEck, Invesco/Galaxy, Ark Invest, and Franklin Templeton, have amended their ETF filings with the SEC in anticipation of potential approval. 

As the deadline for the SEC’s decision on the spot Ethereum ETF approaches, all eyes are on how these regulatory developments will unfold and impact the broader crypto market. The outcome will not only influence Ethereum but could also set a precedent for the approval and regulation of other digital assets in the future.

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Aadrika Sharma
Aadrika Sharma

I enjoy writing and try to learn new things every passing day!

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