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Bitcoin spot ETF approval timing? Former SEC enforcement office director: Not for now, need to wait for Republican victory

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Bitcoin spot ETF approval timing? Former SEC enforcement office director: Not for now, need to wait for Republican victory

Major asset management giant Blackrock announced in July this year that it applied for a Bitcoin spot ETF, attracting many institutions to join the application process, sparking hopes within the crypto community for the approval of a Bitcoin spot ETF. However, will it really be approved smoothly? How will next year's U.S. presidential election affect crypto regulation in the United States? Former SEC Cyber Enforcement Director John Reed Stark shared his insights on this.

SEC Temporarily Will Not Approve Bitcoin Spot ETF

Former head of the SEC's Internet Enforcement Division, John Reed Stark, raised a question on Twitter yesterday evening: "Will the SEC approve any recently proposed Bitcoin spot ETF applications?"

In response, John believes that the SEC will not approve Bitcoin spot ETFs at the moment. However, he also mentioned that after the U.S. presidential election in mid-November next year, there will be exponential changes in cryptocurrency regulation.

John first reviewed the situation during his tenure. In 2017, then-U.S. President Trump, former Secretary of State Hillary Clinton, and Congresswoman Maxine Waters all held the same view on cryptocurrencies, considering them a dangerous and dreadful plague.

At that time, SEC Chairman Jay Clayton, appointed by the Republican Party, also criticized cryptocurrencies and led various enforcement actions and regulatory statements related to cryptocurrencies.

However, with the development of the crypto industry and the current partisan divide on cryptocurrencies, John believes that if a Republican candidate wins the U.S. presidential election in 2024, a Republican SEC member appointed to the SEC could:

  1. Significantly reduce the SEC's enforcement efforts on cryptocurrencies, shifting the focus from cracking down on registration violations to fraud cases.
  2. Be more willing to approve Bitcoin spot ETFs and more likely to undertake other significant crypto-friendly regulatory actions.

Republican Victory in Presidential Election Could Change the Current Situation

John further explained how the SEC operates. As an independent federal agency, the SEC is composed of five commissioners. The members of the commission are appointed by the President and confirmed by the Senate, with the President designating one of the commissioners as the chair. To ensure the commission remains non-partisan, no more than three commissioners can belong to the same political party.

When a new President is elected, the current SEC chair usually resigns. Therefore, if a Republican candidate wins, it means that the current Chairman Gary Gensler may resign, and a senior Republican SEC commissioner could become the acting chair.

John speculated that in this scenario, the well-known "Crypto Mom" Hester Peirce could potentially become the acting chair. Given Hester Peirce's long-standing opposition to many enforcement actions related to crypto, these actions and interference from the SEC could potentially come to an end.