Securities and Exchange Commission (SEC) Chairman Gary Gensler on Wednesday declined to describe the agency’s plans for spot Bitcoin exchange-traded funds (ETFs), although his agency must now decide how to proceed after that the courts asked him to erase his objection to Grayscale Investments’ application.
“These are things that are before the staff,” he said in response to questions from CoinDesk at a Securities Enforcement Forum event in Washington. He said he would “let this play out” and would not prejudge the situation until the SEC staff makes recommendations to the five-member commission.
When asked to provide guidance on the timeline or order in which the requests might be considered, Gensler demurred.
Grayscale and the rest of the industry now await the outcome of a court order that overturned the SEC’s rejection of the company’s efforts to convert GBTC into an ETF. Large financial firms such as Fidelity and BlackRock are in the same boat, eager to know how the regulator will approach pending applications for spot ETFs. Grayscale is owned by Digital Currency Group, which is the parent company of CoinDesk.
Gensler also declined Wednesday to comment on other legal cases his agency is pursuing against crypto companies.
“I’m going to let each of these cryptocurrency exchange cases speak for themselves, and they will be presented to legal experts,” he said. “They will be played where they will be played.”
The president came to the event to deliver a speech on SEC enforcement, and those remarks were heavily tied to criticism of the crypto industry which he said – in a frequently repeated phrase – is “plagued to non-conformities”. When it came time to answer questions, the moderator started with this topic, on which Gensler explained how crypto has become a consumer topic despite its relative scale.
“We have a $110 trillion capital market,” he said. “There may be a trillion in the world, but in the United States it’s less. So by that alone, it’s well under one percent of the U.S. capital markets.”
In the hallway outside the event’s ballroom, Gensler chatted with Zeke Faux, the author of the recent book about FTX’s collapse, “Number Go Up.” Faux inscribed a copy to Gensler, including a common crypto world jibe, “Have fun staying poor.”
UPDATE (October 25, 2023, 6:43 p.m. UTC): Adds comments from Gensler.