Summary and key points from the "Statement on the Approval of Spot Bitcoin Exchange-Traded Products" by Chair Gary Gensler on January 10, 2024:
1. **Approval of Bitcoin ETPs**: The Commission approved the listing and trading of several spot bitcoin exchange-traded product (ETP) shares.
2. **Historical Context**: Previously, under Chair Jay Clayton from 2018 through March 2023, the Commission disapproved over 20 exchange rule filings for spot bitcoin ETPs. This included a filing from Grayscale to convert its Bitcoin Trust into an ETP.
3. **Change in Circumstances**: A recent court ruling found that the Commission did not adequately justify its disapproval of Grayscale’s proposed ETP. This led to a re-evaluation of similar filings, resulting in the current approval.
4. **Regulatory Criteria**: The Commission assesses filings based on their consistency with the Exchange Act and regulations, focusing on investor protection and public interest. The approval does not indicate a bias towards any companies or investments.
5. **Scope of Approval**: The current action is limited to ETPs holding bitcoin only and does not indicate a willingness to approve listing standards for other crypto asset securities.
6. **Investor Protections**: Bitcoin ETP sponsors must provide full, fair, and truthful disclosures. The ETPs will be traded on registered national securities exchanges with strict regulations against fraud and manipulation.
7. **Compliance and Fairness**: Approved ETPs must comply with existing rules and standards. The Commission is reviewing registration statements for 10 spot bitcoin ETPs to promote fairness and competition.
8. **Commission's Experience and Stance**: The Commission has overseen non-security commodity ETPs since 2004. However, they emphasize that bitcoin is a speculative, volatile asset, often associated with illicit activities, and their approval of bitcoin ETPs does not equate to an endorsement of bitcoin. Investors are cautioned about the risks associated with bitcoin and related products.
Source: https://www.sec.gov/news/statement/gensler-statement-spot-bitcoin-011023