The U.S. Securities and Exchange Commission’s former head of internet enforcement has outlined potential changes in the U.S. and at the SEC that could have positive impacts on the crypto industry, including the approval of spot bitcoin exchange-traded funds (ETFs). The changes could include a Republican president being elected, SEC Chairman Gary Gensler resigning, and “crypto mom” Hester Peirce being appointed as the acting SEC Chair.
Possible Changes at SEC That Could Benefit Crypto Industry
Former U.S. Securities and Exchange Commission (SEC) official John Reed Stark highlighted potential changes that could benefit the crypto industry, including the approval of spot bitcoin exchange-traded funds (ETFs), in a lengthy tweet on Sunday. Stark is currently president of cybersecurity firm John Reed Stark Consulting. He founded and served as chief of the SEC Office of Internet Enforcement for 11 years. He was also an SEC enforcement attorney for 15 years.
A number of companies in the U.S. are seeking SEC approval to launch a spot bitcoin ETF, including Blackrock, the world’s largest asset manager. However, the SEC has not approved any spot crypto ETFs so far. Stark opined:
My take is that the current SEC will NOT approve a bitcoin spot ETF application for a range of compelling reasons.
The former SEC official referenced Better Markets, a non-partisan independent nonprofit organization advocating for economic security, which outlined on Aug. 9 why the SEC should reject spot bitcoin ETF filings.
However, Stark believes that the SEC could undergo changes that benefit the crypto industry if a Republican is elected president of the United States in 2024. The 2024 U.S. elections are scheduled to be held on Nov. 5. He stated:
The crypto-regulatory tides could shift exponentially after Election Day.
He explained that under a Republican U.S. president, the SEC’s crypto-enforcement efforts would likely “decrease significantly.” He clarified that this could involve focusing more on fraud cases, “shifting efforts away from charging pure registration violations (such as the failure of a crypto-trading platform to register as an exchange, broker-dealer and clearing firm).” In addition, Stark expects the new SEC to “become far more receptive to approving a bitcoin spot ETF and far more likely to take other significant crypto-friendly regulatory actions.”
The former SEC enforcement official proceeded to explain that when a new U.S. president is elected, the SEC chairman typically resigns and the new chairman position is usually confirmed and filled in a span of three to four months after Inauguration Day. He continued:
Hence, should a Republican get elected President, Chair Gensler would likely resign and the senior Republican appointed SEC Commissioner (in this case famed ‘crypto-mom’ Hester Peirce) would possibly become acting Chair.
Stark noted that if Peirce “becomes acting Chair of the SEC, given her lengthy track record of dissent and opposition to most crypto-related SEC actions, the world should expect that most U.S. SEC crypto-related enforcement and most crypto-related SEC disruption would grind to a screeching halt.”
Last week, Stark warned that the crypto regulatory onslaught will never end under the current SEC.
What do you think about the statements by former SEC official John Reed Stark? Let us know in the comments section below.
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