“Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto,” he said in his statement.
Gensler’s message arrived loud and clear.
There should be no doubts that the majority of the commission remains hostile to digital assets and that Gensler views Bitcoin as a speculative, volatile asset often used for illegal activities, said Howard Fischer, a partner at the law firm Moses Singer who previously worked as a senior trial attorney at the SEC.
“By stressing that the commission’s hands were essentially tied, I think he is in effect washing his hands if there is any collapse on the price” of Bitcoin, Fischer said.
Coy Garrison, a partner at the law firm Steptoe and former counsel to SEC Commissioner Hester Peirce, said the approval of Bitcoin ETFs doesn’t necessarily mean the agency will start allowing products tracking other cryptocurrencies.
“I really believe that the agency’s going to be reluctant to expand its analysis beyond Bitcoin,” Garrison said.
Ark Investment Management’s Cathie Wood was taken aback by Gensler’s statement.
“He just denigrated the whole crypto space,” Wood said in a Bloomberg Radio interview aired on X, the social network formerly known as Twitter. “I couldn’t believe it.”
Over the last year, the agency has brought one enforcement action after another against crypto companies — suing them for everything from outright fraud to registration violations. The industry has pushed back, claiming the agency is regulating by enforcement when it should be writing rules to clarify how securities laws apply to digital assets.
Despite the contentious relationship, Gensler may have just handed the sector one of its biggest wins to date — just one he won’t be celebrating.
This article was provided by Bloomberg News.