SEC Chair Gensler Labels Approval of Spot Bitcoin ETFs as ‘Historic Irony’ in Clash with Decentralized Principles

In a recent interview on CNBC’s “Squawk Box,” Securities and Exchange Commission (SEC) Chair Gary Gensler expressed his reservations about the historic significance attributed to the approval of spot Bitcoin exchange-traded funds (ETFs). He termed the event ironic, emphasizing the centralized nature of these ETFs, which he believes contradicts the decentralized vision laid out by Bitcoin’s pseudonymous creator, Satoshi Nakamoto.

Gensler pointedly stated, “Think about the irony of those who say this week is historic. This [the approval] was about centralization and traditional means of finance.” The SEC Chair’s comments shed light on the regulatory perspective surrounding the recent green light given to 11 spot Bitcoin ETFs.

SEC Chair Gensler

During the interview, Gensler addressed the rationale behind the SEC’s decision, citing a recent court ruling in the regulator’s lawsuit against Grayscale. The court determined that the SEC lacked legitimate grounds to reject a spot Bitcoin ETF, especially considering its prior approvals of products based on futures contracts for the flagship cryptocurrency.

Gensler underscored the SEC’s commitment to upholding the law and reiterated the agency’s intention to abide by court directives concerning cryptocurrency regulation. He emphasized that approving the ETFs does not translate to an endorsement of Bitcoin itself, and he maintained a critical stance toward the digital asset.

“BItcoin itself we did not approve, we do not endorse,” Gensler clarified. “This is a product called an exchange-traded product that investors can invest in the underlying non-security commodity asset.” According to the SEC Chair, Bitcoin remains a “volatile store of value” and is not currently utilized for legitimate payments. Despite this skepticism, Gensler acknowledged the promising nature of the underlying blockchain technology, suggesting that approving the ETFs was the “most sustainable path forward.”

In a bid to provide further context to the SEC’s stance, Gensler emphasized that Bitcoin is the sole cryptocurrency considered a non-security commodity, drawing parallels to precious metals like gold and silver. He reiterated the regulator’s prevailing view that the majority of other cryptocurrency tokens fall under the classification of securities.

The approval of spot Bitcoin ETFs has sparked both enthusiasm and criticism within the cryptocurrency community. While some applaud the move as a step toward mainstream adoption, others, including Gensler, caution against losing sight of Bitcoin’s original decentralized vision in the pursuit of regulatory approval and acceptance within traditional financial systems.

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