- A recent court decision was the driving force behind the Bitcoin Spot ETF approval, according to SEC's Gensler.
- The SEC has previously denied over 20 applications and the court’s decision is currently limited to Bitcoin.
- Gensler directs investors to remain cautious about risks associated with Bitcoin.
The Securities and Exchange Commission's (SEC) Chair Gary Gensler shed light on the body’s decision to approve Bitcoin Spot ETFs. Gensler explained that between 2018 and May 2023, the Commission denied nearly 20 applications for Bitcoin ETPs.
A US District of Columbia’s court decision, however, was the key factor that influenced his approval for Bitcoin Spot ETFs.
Also read: Elon Musk open to using Bitcoin on X, fueling hope among market participants
SEC Chair says courts interpretation of the law drove BTC Spot ETF approval
The SEC’s approval of the Bitcoin Spot ETF, on Wednesday, January 10, marks a watershed moment for crypto market participants. In a recent statement on the SEC website, Chair Gensler said that the Commission acts within the law and how the courts interpret the law.
The DC Circuit Court of Appeals put an end to the dispute between the US SEC and Grayscale in October of last year, and ordered the financial regulator to revisit its rejection of the asset manager's spot Bitcoin ETF application.
For Gensler this court ruling was a driving force for Spot Bitcoin ETF approval. Chair Gensler felt that the most sustainable path forward after the ruling was to approve the listing and trading of spot Bitcoin ETF shares.
Gensler reminded investors that the Commission is “merit neutral” and does not take a view on particular companies, investments, or the assets underlying an ETP. Therefore, the SEC does not endorse or support Bitcoin per se.
The Bitcoin ETF approval does not signal anything about the Commission’s views as to the status of other crypto assets under the federal securities laws. This is a key piece of information when considering the SEC’s decision on the Ethereum Spot ETF, lined up for May.
Chair Gensler asked investors to remain cautious about the myriad risks associated with Bitcoin, in his statement.
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