SEC Head Gensler Shows Support for Futures-Based Bitcoin ETFs

SEC Chairman Gary Gensler said in a speech that the regulatory authority would look into supporting futures-based bitcoin exchange-traded funds (ETF).

United States Securities and Exchange Commission (SEC) Chairman Gary Gensler has offered some positive updates on ETFs. Speaking at The Future of Asset Management North America Conference, Gensler said he believes there is a place for bitcoin ETFs based on futures.

Gensler emphasizes that he does not speak on behalf of the SEC and that the views are his own. He notes that the agency has taken note of new technologies and practices — cryptocurrencies among them — and the regulatory authority must grow alongside them.

After going over some non-crypto market-related developments, Gensler last mentions investment vehicles that offer exposure to crypto-assets. He refers to the extensive number of mutual funds that have invested in the CME’s bitcoin futures. He believes that in combination with federal securities laws, the investment acts of past years could provide investor protection for these vehicles.

Gensler and the SEC are no strangers to such investment vehicles, as the agency has several ETF applications waiting for a decision. The general belief is that U.S. authorities are preparing a regulatory framework, after which the SEC will make a decision. In his speech, Gensler says that the staff will look into the filings of futures-based crypto ETFs.

Gensler all for innovation

Cryptocurrency ETFs could be a big boost for the market, giving exposure to the asset class without investing directly into it themselves. There are large swathes of retail investors who have been on the fence about investment because of the technical knowledge that it requires. Although exchanges and financial institutions are making it easier than ever to put capital into crypto, it remains abstruse for many.

But Gensler and others are worried about exposure to a volatile market that is also potentially vulnerable to market manipulation. The SEC Chairman, in particular, has reiterated the importance of investor protection, hence the redoubled efforts into regulation.

The U.S. is on the verge of announcing regulation for the market, which would put to bed doubts about investment. Stablecoins appear to be a key concern, and the U.S. Treasury is leading the charge on that matter.

The SEC’s focus on imposing oversight onto the market has led to a number of high-profile cases, most notably its lawsuit against Ripple. It also announced a probe into Uniswap in September 2021.

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