Washington, D.C. Gary Gensler, the chair of the US Securities and Exchange Commission, declined on Thursday to provide a sneak peek at his organization’s ruling regarding ether (ETH) exchange-traded funds (ETFs), but he did encourage viewers to “stay tuned.” When queried by CoinDesk on Thursday about what the agency is planning to do in response to the specific applications on this much-anticipated crypto judgment, he mostly avoided answering the question, even though he had underlined that the court decision on ETFs had forced his agency to “pivot” in its thinking.
“I don’t have anything on this particular filing,” Gensler said outside an Investment Company Institute event in Washington.
“We do it within the law and how the courts interpret the law, and that’s what I’m deeply committed to,” he said, after having noted on stage at the event that the agency had responded to the D.C. Circuit Court of Appeals decision rejecting the SEC’s approach toward spot bitcoin (BTC) ETFs earlier this year.
This week, the SEC requested that exchanges that accept applications for spot ether ETFs resubmit their 19b-4 forms using universal language, following weeks of minimal communication. By Tuesday, those forms were turned in to the SEC, and that evening the exchanges started posting them online. As evidenced by the amended S-1 forms filed this week by organizations like Fidelity and Grayscale, the SEC also seems to have started interacting with the potential issuers. By the end of business on Thursday, the SEC must reach a final decision on at least one spot ether ETF application.
These forms suggest that the SEC is not happy with issuers of ether ETFs potentially staking any kind of asset. Industry insiders have told CoinDesk that although this week’s actions by the SEC increase the likelihood that the ETFs will be approved, they do not ensure it.
“[The] DC Circuit took a different view, and we took that into consideration and pivoted,” Gensler said on Thursday.
Additionally, Gensler reaffirmed on Thursday that his organization would continue to oppose the cryptocurrency measure that was approved by the House of Representatives the previous Wednesday.
“We’ll continue to engage,” he said. “It’s just a field where the token operators – without prejudging any one of them – aren’t making the disclosures that investors really could benefit from and are required by law.”
“We’ve seen leaders in this field find themselves on a pathway to jail or extradition,” he added.
In response to a question concerning Congress’s attempt to overturn his agency’s crypto accounting policy, Staff Accounting Bulletin No. 121 (SAB 121), he stated that the regulation was intended only as guidance during a period when failing cryptocurrency companies were being forced to treat their customers’ assets in bankruptcy on an equal footing with their own.
“The crypto that these companies have said they took as custody actually because part of the bankruptcy estate,” Gensler said. “That’s what we were addressing back in 2022,” he added, saying it was “just” an accounting bulletin.