SEC Chair Gary Gensler stays mum on prospects for a spot bitcoin ETF, says he won't 'pre-judge' matter

Securities and Exchange Commission Chair Gary Gensler stayed mum on Wednesday when asked by journalists if the industry could soon see any action surrounding the applications for spot bitcoin ETFs the agency is reviewing. 

Gensler, who spoke at a Healthy Markets Association conference on Wednesday, said he would not "pre-judge" the matter. He's previously called the agency's review process a "time-tested process." 

The crypto industry has been waiting with bated breath for agency to approve what would be the first spot bitcoin ETF. Multiple applications have been filed over recent months from asset managers including BlackRock and Fidelity, but they have so far all been delayed. 

"When an asset manager is seeking to take something public, these exchange traded products need to register with the SEC, and they go through a filing, somewhat similar to going public, like an IPO," Gensler said in an interview with Bloomberg TV last month. 

"And so it's really the work of our Division of Corporation Finance that gives feedback, our Division of Trading and Markets of course looks at the filings," he continued. "This is a time tested process that goes back decades. The staff of the SEC, it's called the Disclosure Review Team, but in that group, they respond and give feedback to potential issuers."

The SEC on Tuesday held fresh meetings with representatives from Invesco and BlackRock to discuss a potential approach to resolve concerns around "balance sheet impacts and risks." The agency also met with Grayscale and BlackRock last week, according to a memo published by the SEC. 

Gensler reiterates his stance on crypto

In the Wednesday remarks, Gensler reiterated his stance that bitcoin is considered a commodity, while voicing concern about the crypto industry as a whole. 

The SEC has brought enforcement actions against crypto firms over the past year, including ones against U.S.-based Coinbase and the world's largest crypto exchange, Binance. 

When asked by a reporter how he felt about Commodity Futures Trading Commission Chair Rostin Behnam's comments on the need for more authority for the derivatives regulator to oversee crypto, Gensler said he is supportive of the CFTC getting more authority for bitcoin specifically. 

Gensler, who once chaired the CFTC, has said before that many cryptocurrencies are securities. 

Howey Test

In lawsuits, the SEC often cites the Howey Test, a 1946 U.S. Supreme Court case involving citrus groves to determine whether transactions are investment contracts and thus subject to securities laws. However, that approach has garnered criticism from some, including Coinbase, which has said the SEC stretched its arguments in Howey "beyond recognition." 

"It's kind of like common sense versus the hyperbole in this field," Gensler said. "This is a field that is rife with bad actors and rife with fraud and manipulation and money laundering."

Gensler cited a previous speech he made comparing the crypto industry's noncompliance to the 1920s, before federal securities laws were put in place. 

"That was being kind," Gensler said on Wednesday.

When asked what Gensler would say to crypto investors or those curious about crypto, the chairman said "beware, be cautious, be careful."