US lawmakers urge SEC’s Gensler to promptly approve spot Bitcoin ETF

US lawmakers urge SEC's Gensler to promptly approve spot Bitcoin ETF

The Path to Approval: Lawmakers Urge SEC to Embrace Bitcoin ETFs

The U.S. Securities and Exchange Commission (SEC) is facing mounting pressure from lawmakers to approve bitcoin exchange-traded funds (ETFs). Four members of the House Financial Services Committee, including Rep. Tom Emmer, the majority whip in the House leadership, have called on the SEC to move forward in granting ETF applications. They will have the opportunity to discuss this issue further in a hearing scheduled for this week[^1^].

The SEC’s repeated rejection of bitcoin ETFs has led to criticism and legal challenges. The agency recently lost a court battle over its decision to reject Grayscale’s spot bitcoin ETF application. As a result, lawmakers argue that the SEC should pay heed to the courts and abandon its efforts to block ETFs from regulatory approval[^1^].

In a bipartisan letter addressed to SEC Chair Gary Gensler, the lawmakers argue that a spot bitcoin ETF is essentially no different from the crypto futures ETFs that the agency has already approved. Thus, they contend that the SEC should grant approval to applicants such as Fidelity, BlackRock’s iShares, and Grayscale Investments[^2^].

“The SEC’s current posture is untenable moving forward,” stated the letter issued by Reps. Mike Flood (R-Neb.), Tom Emmer (R-Minn.), Wiley Nickel (D-N.C.), and Ritchie Torres (D-N.Y.)[^2^]. They assert that following the Court of Appeals’ decision, the SEC should no longer deny these applications under inconsistent and discriminatory standards[^1^].

Just last month, the D.C. Circuit Court of Appeals instructed the SEC to reconsider its stance on bitcoin ETFs. The court ruled that the SEC’s rejection in the Grayscale case had been “arbitrary and capricious” according to Circuit Judge Neomi Rao[^2^].

As Gensler prepares to appear in an SEC oversight hearing before the House Financial Services Committee, the lawmakers’ letter urges the SEC to immediately approve the outstanding ETF applications. This hearing presents an opportunity for committee members to question Gensler directly on this issue[^2^].

The approval of a bitcoin ETF would have significant implications for investors, as it would provide an easier and more accessible route to enter the cryptocurrency market. ETFs are designed to be simple to trade in and out of through brokerage accounts, facilitating wider participation and potentially driving greater liquidity in the market[^2^].

Rep. Emmer, Rep. Flood, and Rep. Torres are all members of the Congressional Blockchain Caucus in the House. This caucus focuses on advancing blockchain technology and understanding its impact on various industries and sectors[^2^].

In conclusion, the pressure is mounting on the SEC to approve bitcoin ETFs, with lawmakers advocating for a change in the agency’s stance. The recent court ruling in favor of Grayscale has further fueled the argument that the rejection of ETF applications is arbitrary and discriminatory. As the SEC Chair prepares to face questioning, the industry eagerly awaits a shift in policy that could open the doors to more widespread participation in the crypto market.

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