When you think things are going well in crypto, someone spoils everyone else’s mode. While the crypto market certainly doesn’t operate on what anyone says, if you are influential, like the one we will discuss here, you certainly notice what they say. This time, The person in question is not SEC’s chair, Gary Gensler, who has recently made another revelation on X (formerly Twitter).
Gary Gensler said that most crypto influencers and news media outlets usually tell you that cryptocurrency can be exceptionally risky and volatile.
The SEC’s chair posted a thread on his social media account on X, in which he warned the community about the risks associated with cryptocurrency. The timing of this post makes it exciting news since the awaited spot Bitcoin ETf approval or denial from the SEC is anticipated to be just around the corner.
Meanwhile, the current sentiment in the market is leaning towards approval, which can also be seen from today’s performance of Bitcoin on the daily chart. Bitcoin made a recent high when this article was being written and went above $47k for the first time after quite some time.
The spike in Bitcoin’s recent performance is associated with the forecast that the SEC will approve the first of eleven spots for Bitcoin ETF applications on January 10, and people are investing heavily in Bitcoin because once the approval is given, everyone is expecting Bitcoin’s price to skyrocket with some anticipating Bitcoin to make new all-time highs.
However, amidst all the optimism, Gensler has taken his duty as a party spoiler to keep everyone on their toes. In his 8th January X post, Gensler reminded crypto investors that the SEC is closely monitoring asset managers offering crypto as investment vehicles. These firms may not comply with federal securities laws; therefore, investing in crypto can be a precarious endeavor, especially considering the volatile nature of the crypto market.
He also tried to warn the population about the potential scams that are taking place in the crypto market and referred to the pyramid schemes and Ponzi schemes, along with fraudulent ICO programs that have been used as an excuse on many occasions by critics of crypto to persuade others to stay away from it.
Gary Gensler’s remarks on potential crypto scams
Gansler said: “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.”
As mentioned earlier, the timing of this tweet couldn’t have come at an exciting time because just about 2 hours after he posted his thoughts on social media, several spot Bitcoin ETF issuers submitted their amended form S-1 application to the SEC, which was the last opportunity for all the ETF issuers to comply with the SEC’s guidelines and revamp their proposals to the guidelines defined by SEC.
Now the ball is in the SEC’s court, and so far, they have kept all their cards closed their chests when it comes to showing how much they are willing to approve these applications in one go or whether they will approve all 11 proposals in one go or delay approval for some while approving others.
The consensus in the general crypto community is that the SEC might not approve these applications for now. According to a survey conducted by Bitwise, which is one the applicants of spot Bitcoin ETF, only 39% voted in favor of SEC accepting these spot Bitcoin ETF proposals in the year 2024, which means that the rest of the 61% believe that they might not even see any applications being approved in 2024. It will be in 2025 or after we see the SEC giving the green light to spot Bitcoin ETFs.
Gary Gensler has come under heavy consideration from the crypto community for showing reluctance in approving spot crypto ETFs, even though Canada got a head start when they allowed firms to approve list spot Bitcoin ETFs on exchanges in 2021.
Canada was the first to approve a spot Bitcoin ETF in February 2021. Several spot Bitcoin ETFs are available in Canada, including Purpose Bitcoin ETF and CI Galaxy Bitcoin ETF.
Many believe that the United States Securities and Exchange Commission hasn’t approved many applications till now because Gensler hasn’t been convinced of their regulatory clearance or whether his harsh stance on crypto is the reason why we haven’t seen the U.S. approving most of the applications from asset managers getting approved in the past years.
The S-1 filings on January 8 were anticipated, marking a deadline set by the SEC following numerous 19b-4 filings on January 5. While both filings indicated a potential advancement for the SEC in permitting the listing of crypto ETFs on U.S. exchanges, approval is not guaranteed.
The SEC retains the authority to reject applications, although such decisions would likely need distinct justifications compared to those used for previous ETF denials. In August, a federal judge mandated the SEC to reevaluate a Grayscale spot BTC ETF application, asserting that the commission’s denial was deemed “arbitrary and capricious.”
