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Full text of SEC Chairman's approval statement for spot BTC ETF.

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Although we have approved the listing and trading of certain physically-backed Bitcoin ETPs today, we have not approved or endorsed Bitcoin.

Original author: Gary Gensler, SEC Chairman

Translated by: Odaily Star Daily

Today, the US SEC officially approved 11 spot Bitcoin ETFs, including VanEck, Bitwise, Fidelity, Franklin, Valkyrie, Hashdex, Ark Invest, Grayscale, BlackRock, WisdomTree, and Invesco Galaxy.

SEC Chairman Gary Gensler issued a statement on the SEC website approving Bitcoin spot ETFs. The statement indicates that the SEC has approved some Bitcoin spot ETFs, and the committee evaluates any rules submitted by national securities exchanges based on whether they are consistent with the Exchange Act and its regulations, including whether the rule is intended to protect investors and the public interest. The committee is neutral in the evaluation process and does not express opinions on specific companies, investments, or assets underlying exchange-traded products (ETPs).

Gensler further stated that this by no means indicates that the committee is willing to approve the listing standards for cryptographic asset securities, nor does approval indicate the committee's stance on the legal status of other cryptographic assets under federal securities laws or the status of certain cryptographic asset market participants violating federal securities laws.

Following is the full text of Gary Gensler's approval statement:

Today, the committee approved the listing and trading of some spot Bitcoin exchange-traded products (ETPs) stocks.

I often say that the committee acts in accordance with the law and the court's interpretation of the law. From Chairman Jay Clayton's term in 2018 until March 2023, the committee has rejected over 20 proposed Bitcoin ETPs. One of them was proposed by Grayscale, which planned to convert its Bitcoin Trust into an ETP.

We are now facing a new set of applications that are similar to the ones we have rejected in the past. However, the situation has changed. The US Court of Appeals for the District of Columbia Circuit has ruled that the Commission failed to adequately explain the reasons for rejecting the proposed listing and trading of Grayscale's ETP. As a result, the court has vacated the case and remanded it back to the Commission for further review. Based on these circumstances and the more thorough discussion in the approval order, I believe the most sustainable path forward is to approve the listing and trading of these spot Bitcoin ETP shares.

The committee evaluates whether any rules submitted by the national stock exchange comply with the Securities Law and its regulations, including whether they are intended to protect investors and public interests. The committee is neutral and does not express opinions on specific companies, investments, or ETP underlying assets. If the issuer of securities and the listed exchange comply with the Securities Law, the Trading Law, and the committee's rules, they must provide the same access to our regulated market as others.

It is important to note that today's committee action is limited to holding a non-security commodity Bitcoin ETP. It should in no way indicate the committee's willingness to approve listing standards for cryptocurrency securities. The approval also does not indicate the committee's view on the status of other cryptocurrencies regulated by federal securities laws or the current state of some cryptocurrency market participants not complying with federal securities laws. As I have said in the past, without prejudging any particular cryptocurrency, the vast majority of cryptocurrencies are investment contracts and therefore subject to federal securities laws.

Today's investors can buy or otherwise obtain exposure to Bitcoin through many brokerage firms, mutual funds, national securities exchanges, peer-to-peer payment applications, non-compliant cryptocurrency trading platforms, and of course, the Grayscale Bitcoin Trust. Today's actions will include certain protections for investors:

Firstly, the issuer of Bitcoin ETP will be required to provide complete, fair, and truthful disclosures about the product. Investors in any listed and traded Bitcoin ETP will benefit from disclosures in public registration statements and required periodic filings. While these disclosures are necessary, it is worth noting that today's action does not endorse the disclosed ETP arrangements, such as custody arrangements.

Secondly, these products will be listed and traded on registered national securities exchanges. Such regulated exchanges must establish rules aimed at preventing fraud and manipulation, and we will closely monitor them to ensure they enforce these rules. In addition, the commission will conduct a comprehensive investigation into any fraudulent or manipulative behavior in the securities market, including schemes involving the use of social media platforms. Such regulated exchanges also have rules in place to address certain conflicts of interest and protect the interests of investors and the public.

In addition, existing behavioral rules and standards will apply to the purchase and sale of approved ETPs. For example, this includes best interest regulation for broker-dealers recommending ETPs to retail investors and fiduciary obligations for investment advisers under the Investment Advisers Act. Today's action does not approve or endorse cryptocurrency trading platforms or intermediaries, which often conflict with federal securities laws and regulations.

Thirdly, SEC staff are simultaneously completing registration statement reviews for 10 spot Bitcoin ETPs, which will help create a fair competitive environment for issuers, promote fairness and competition, and benefit investors and the broader market.

Since 2004, our organization has had extensive experience in regulating non-securities commodity ETPs (such as ETPs holding certain precious metals). This experience is valuable for us to supervise Bitcoin ETP spot trading.

Although we are neutral, I must point out that the underlying assets in metal ETPs have consumer and industrial uses, while in contrast, Bitcoin is primarily a speculative and volatile asset, also used for illegal activities including ransomware, money laundering, evading sanctions, and financing terrorism.

Although we have approved the listing and trading of certain spot Bitcoin ETP stocks today, we have not approved or endorsed Bitcoin. Investors should exercise caution with regard to the numerous risks associated with products related to Bitcoin and its value and cryptocurrency.