SEC Chair Gary Gensler Accused of Being an Authoritarian Regulator
In the recent Grayscale vs. SEC case, the District of Columbia Court of Appeals judges ruled in favor of Grayscale, describing the SEC’s behavior as „arbitrary“ and „capricious“. Felix Shipkevich, a New York-based corporate regulatory lawyer, believes that this decision is a significant win for the crypto industry, and it is unlikely that the SEC will appeal.
The Future of Bitcoin Spot ETFs
Shipkevich suggests that the SEC will now be more likely to allow Bitcoin spot ETF products to proceed, although possibly only for BlackRock and Fidelity applications. This is due to the strong wording used in the court’s decision, which raises questions about the SEC’s reasoning in denying Grayscale’s request to convert its trust into an ETF.
Delay in SEC’s Decision
It is worth noting that all seven pending ETF applications were recently delayed for another 45 days. However, there is an anomaly where the delay notice for BlackRock’s iShares Bitcoin Trust was posted separately from the others, and on a different section of the SEC’s website. The reason for this has not been explained yet.
Gensler’s Approach and Future Moves
Gary Gensler, the SEC Chair, has been criticized for his authoritarian approach and lack of engagement with the crypto community. Shipkevich compares Gensler to Putin, suggesting that he does not forget those who go against him. In light of the recent court decision, Gensler is more likely to approve the BlackRock and Fidelity Bitcoin Spot ETFs, potentially disregarding Grayscale.
The Impact of Gensler’s Past Actions
Shipkevich points out that Gensler’s previous role as the Chair of the CFTC already led to the destruction of many small and mid-size financial institutions. Dodd-Frank legislation, spearheaded by Gensler, favored large companies, making big banks even bigger while smaller institutions struggled to comply with the regulatory requirements. Shipkevich believes that Gensler aims to replicate this attitude with the crypto market.
Support for Crypto Regulation
While critical of Gensler’s approach, Shipkevich acknowledges the need for regulation in the crypto industry due to the presence of fraud and deceit. However, he believes that well-established companies like Grayscale, with a large stake in Bitcoin, should not face major issues given their significant capitalization and track record.
BlackRock and Fidelity as Safe Bets
Shipkevich suggests that the SEC is likely to approve BlackRock and Fidelity’s Bitcoin Spot ETF applications. These well-established institutions provide a sense of safety and reputation for the SEC. Approving an application from a newer company without a long-standing history could be seen as risky for the regulatory body.
In conclusion, the recent court decision in the Grayscale vs. SEC case is seen as a significant win for the crypto industry. It is anticipated that the SEC will allow Bitcoin spot ETFs to proceed, potentially favoring applications from BlackRock and Fidelity. Despite criticism of Gary Gensler’s regulatory approach, there is an understanding of the need for regulation in the crypto market to combat fraud.
