U.S.
Securities
and
Exchange
Commission
Chair
Gary
Gensler
released
this
statement
after
the
regulator
approved
spot
bitcoin
ETFs:
Jan.
10,
2024
Today,
the
Commission
approved
the
listing
and
trading
of
a
number
of
spot
bitcoin
exchange-traded
product
(ETP)
shares.
I
have
often
said
that
the
Commission
acts
within
the
law
and
how
the
courts
interpret
the
law.
Beginning
under
Chair
Jay
Clayton
in
2018
and
through
March
2023,
the
Commission
disapproved
more
than
20
exchange
rule
filings
for
spot
bitcoin
ETPs.
One
of
those
filings,
made
by
Grayscale,
contemplated
the
conversion
of
the
Grayscale
Bitcoin
Trust
into
an
ETP.
We
are
now
faced
with
a
new
set
of
filings
similar
to
those
we
have
disapproved
in
the
past.
Circumstances,
however,
have
changed.
The
U.S.
Court
of
Appeals
for
the
District
of
Columbia
held
that
the
Commission
failed
to
adequately
explain
its
reasoning
in
disapproving
the
listing
and
trading
of
Grayscale’s
proposed
ETP
(the
Grayscale
Order).
The
court
therefore
vacated
the
Grayscale
Order
and
remanded
the
matter
to
the
Commission.
Based
on
these
circumstances
and
those
discussed
more
fully
in
the
approval
order,
I
feel
the
most
sustainable
path
forward
is
to
approve
the
listing
and
trading
of
these
spot
bitcoin
ETP
shares.
The
Commission
evaluates
any
rule
filing
by
a
national
securities
exchange
based
upon
whether
it
is
consistent
with
the
Exchange
Act
and
regulations
thereunder,
including
whether
it
is
designed
to
protect
investors
and
the
public
interest.
The
Commission
is
merit
neutral
and
does
not
take
a
view
on
particular
companies,
investments,
or
the
assets
underlying
an
ETP.
If
the
issuer
of
a
security
and
the
listing
exchange
comply
with
the
Securities
Act,
the
Exchange
Act,
and
the
Commission’s
rules,
that
issuer
must
be
provided
the
same
access
to
our
regulated
markets
as
anyone
else.
Importantly,
today’s
Commission
action
is
cabined
to
ETPs
holding
one
non-security
commodity,
bitcoin.
It
should
in
no
way
signal
the
Commission’s
willingness
to
approve
listing
standards
for
crypto
asset
securities.
Nor
does
the
approval
signal
anything
about
the
Commission’s
views
as
to
the
status
of
other
crypto
assets
under
the
federal
securities
laws
or
about
the
current
state
of
non-compliance
of
certain
crypto
asset
market
participants
with
the
federal
securities
laws.
As
I’ve
said
in
the
past,
and
without
prejudging
any
one
crypto
asset,
the
vast
majority
of
crypto
assets
are
investment
contracts
and
thus
subject
to
the
federal
securities
laws.
Investors
today
can
already
buy
and
sell
or
otherwise
gain
exposure
to
bitcoin
at
a
number
of
brokerage
houses,
through
mutual
funds,
on
national
securities
exchanges,
through
peer-to
peer
payment
apps,
on
non-compliant
crypto
trading
platforms,
and,
of
course,
through
the
Grayscale
Bitcoin
Trust.
Today’s
action
will
include
certain
protections
for
investors:
First,
sponsors
of
bitcoin
ETPs
will
be
required
to
provide
full,
fair,
and
truthful
disclosure
about
the
products.
Investors
in
any
bitcoin
ETP
that
is
listed
and
traded
will
benefit
from
the
disclosure
included
in
public
registration
statements
and
required
periodic
filings.
While
these
disclosures
are
required,
it
is
important
to
note
that
today’s
action
does
not
endorse
the
disclosed
ETP
arrangements,
such
as
custody
arrangements.
Second,
these
products
will
be
listed
and
traded
on
registered
national
securities
exchanges.
Such
regulated
exchanges
are
required
to
have
rules
designed
to
prevent
fraud
and
manipulation,
and
we
will
monitor
them
closely
to
ensure
that
they
are
enforcing
those
rules.
Furthermore,
the
Commission
will
fully
investigate
any
fraud
or
manipulation
in
the
securities
markets,
including
schemes
that
use
social
media
platforms.
Such
regulated
exchanges
also
have
rules
designed
to
address
certain
conflicts
of
interest
as
well
as
to
protect
investors
and
the
public
interest.
Further,
existing
rules
and
standards
of
conduct
will
apply
to
the
purchase
and
sale
of
the
approved
ETPs.
This
includes,
for
example,
Regulation
Best
Interest
when
broker-dealers
recommend
ETPs
to
retail
investors,
as
well
as
a
fiduciary
duty
under
the
Investment
Advisers
Act
for
investment
advisers.
Today’s
action
does
not
approve
or
endorse
crypto
trading
platforms
or
intermediaries,
which,
for
the
most
part,
are
non-compliant
with
the
federal
securities
laws
and
often
have
conflicts
of
interest.
Third,
Commission
staff
is
separately
completing
the
review
of
registration
statements
for
10
spot
bitcoin
ETPs
simultaneously,
which
will
help
create
a
level
playing
field
for
issuers
and
promote
fairness
and
competition,
benefiting
investors
and
the
broader
market.
Since
2004,
this
agency
has
had
experience
overseeing
spot
non-security
commodity
ETPs,
such
as
those
holding
certain
precious
metals.
That
experience
will
be
valuable
in
our
oversight
of
spot
bitcoin
ETP
trading.
Though
we’re
merit
neutral,
I’d
note
that
the
underlying
assets
in
the
metals
ETPs
have
consumer
and
industrial
uses,
while
in
contrast
bitcoin
is
primarily
a
speculative,
volatile
asset
that’s
also
used
for
illicit
activity
including
ransomware,
money
laundering,
sanction
evasion,
and
terrorist
financing.
While
we
approved
the
listing
and
trading
of
certain
spot
bitcoin
ETP
shares
today,
we
did
not
approve
or
endorse
bitcoin.
Investors
should
remain
cautious
about
the
myriad
risks
associated
with
bitcoin
and
products
whose
value
is
tied
to
crypto.
