The SEC chair has approved a bitcoin ETF, but the hostility towards cryptocurrency remains.

Gary Gensler, Securities and Exchange Commission Chair, has stated that the agency's approval of spot bitcoin ETFs is due to his ongoing hostility towards the cryptocurrency in general.

Gensler stated that the SEC's stance on bitcoin ETFs has been reversed due to changes in circumstances.

The SEC lost a key court case in August, as the U.S. Court of Appeals for the D.C. Circuit ruled that the commission had not provided sufficient explanation for its rejection of Grayscale's proposed bitcoin ETF.

Gensler was forced to give in, but not on all fronts.

He is currently involved in numerous legal disputes with the crypto community over his assertion that most cryptocurrencies are securities subject to SEC regulation.

Gensler did not suggest any alteration in his stance regarding this issue in his statement.

The Commission's approval of a particular crypto asset does not indicate its stance on the status of other crypto assets under federal securities laws or the level of non-compliance among crypto asset market participants with these laws. As I have previously stated, the majority of crypto assets are investment contracts and therefore subject to federal securities laws.

Will ETFs that invest in bitcoin encourage wirehouses and financial advisors to recommend the cryptocurrency and enable it to be traded on their platforms?

Gensler clarified that broker-dealers must follow existing rules.

The purchase and sale of approved exchange traded products will be subject to existing rules and standards of conduct. This includes Regulation Best Interest for broker-dealers recommending ETPs to retail investors and a fiduciary duty under the Investment Advisers Act for investment advisers.

Broker-dealers must act in the best interest of their retail customers and ensure that their investment recommendations are suitable for the client, as per Regulation Best Interest.

Bitcoin presents a potential investment minefield for advisors, which may discourage them from recommending it for some time.

Gensler couldn't resist taking a final jab at bitcoin as a whole.

Although we maintain a merit-neutral stance, it is worth noting that the underlying assets in metals ETPs have practical applications in both consumer and industrial sectors. In contrast, bitcoin is predominantly a speculative and volatile asset that is also used for illegal activities such as ransomware, money laundering, sanction evasion, and terrorist financing. Although we have approved the listing and trading of certain spot bitcoin ETP shares today, we have not endorsed or approved bitcoin itself.