CRYPTOCURRENCY US regulator approves spot Bitcoin ETFs in major boost to crypto sector
The US Securities and Exchange Commission has approved the country’s first spot-trading of Bitcoin exchange-traded-funds.
The regulator approved 11 ETFs, including Grayscale, Bitwise and Hashdex. It also approved ETFs from BlackRock,
Fidelity, ARK Invest, Invesco and others. Trading in the Bitcoin ETFs could begin soon, allowing everyday investors to financially benefit from the Bitcoin cryptocurrency without directly holding it.
“We did not approve or endorse Bitcoin,” SEC chairman Gary Gensler said. “Investors should remain cautious about the myriad risks associated with Bitcoin and products whose value is tied to crypto.”
The approval is a dramatic shift for the SEC, which for years rejected applications due to market manipulation fears.
Those fears were reignited on Tuesday when the SEC said its X account was compromised after a “post” said it had approved Bitcoin ETFs. The unauthorised post was later deleted, but not before the price of Bitcoin rose by more than 2.5 per cent.
The SEC will have to investigate itself for market manipulation after the hacked post, Fox Business reported.
The US regulator’s approval of Bitcoin ETFs would allow people to buy the cryptocurrency without using a crypto exchange or broker, making it easier for traders to invest in the digital token.
Mr Gensler has repeatedly warned about the risks of investing in cryptocurrency.
“Fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams,” he said.
Mr Gensler said that these investments continue to be replete with fraud or bogus coin offerings, Ponzi and pyramid schemes, and “outright theft”.
US President Joe Biden’s administration launched a cryptocurrency framework in 2022 for the SEC and Commodities Futures Trading Commission to investigate and enforce action against unlawful deeds in the digital assets market. The SEC has since focused on major crypto exchange platforms, Coinbase and Binance.
In separate filings, the US regulator accused the two of operating unregistered exchanges.
In November, Binance founder Changpeng Zhao pleaded guilty to failing to put in place an effective anti-money laundering programme.
Binance also agreed to pay $4.3 billion in penalties.