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US Senator Criticizes SEC Approving BitCoin ETF On The Ground Of Money Laundering Risks

U.S. Senator Elizabeth Warren condemned the SEC for granting spot bitcoin exchange-traded funds approval on Wednesday, 10 January 2024. She noted that the securities regulator is wrong both from a legal and policy standpoint about this decision.

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Democrat Elizabeth Warren Stands On The Same Page With Republicans Regarding The SEC’s Decision On Bitcoin ETFs

The American senator Elizabeth Warren denounced the step by the US Securities and Exchange Commission to embrace acknowledgment of spot Bitcoin ETF proposals; while cautioning that there must be an implementation of AML rules over cryptos immediately.

Warren also articulated her worries via X on Friday 12, January 2024 the next day after the securities regulator confirmed this landmark move which was the approval of Spot Bitcoin Exchange Traded Fund, she observed: “The SEC Gov is wrong in law and incorrect under policy terms respecting its bitcoin ETF decision, Even in the case of these crypto assets entering our financial system, it is all the more critical that they comply with known anti-money laundering provisions.”

The Senator from Massachusetts echoed her opposition to crypto, protesting that the Gary Gensler-headed Commission misjudged on matters of law and approval notice delivered Wednesday confirming the Bitcoin ETF ruling. The debut session of the newly approved Bitcoin ETFs will trade at a $4.5 billion price on Thursday. The daily trade volume went down to $4.04 billion on Friday, January 12, 2024.

Background Of Warren’s Dissents On Approval of Bitcoin ETFs

Warren has been a major opponent of cryptocurrency for years. The Senator has called for the Bank Secrecy Act to be revamped to address what she describes as a cryptocurrency threat and is also sponsoring Digital Asset Anti-Money Laundering ACT, a bill that seeks KYC requirements among providers of blockchain infrastructure including participants.

As stated in a news report, in October 2023, the Senator and over 100 legislators wrote a bipartisan letter to officials at the Biden administration citing worries about Hamas’ ability to bypass U.S. sanctions while amassing millions through crypto assets. The Massachusetts senator has filed the Digital Asset Anti-Money Laundering Act to “plug the holes in current laws and bring cryptocurrency companies closer to compliance with AMF/CFT standards that dominate most other aspects of finance.” Supporting Warren’s legislation, which is a kind of crypto ban, the Chamber of Digital Commerce launched an online petition as they intend to stop it.

Critiques have been launched against the bill by crypto advocacy groups like Coin Center that refer to it as an “optimistic, unlawful attack on cryptocurrency self-custody, developers and node operators.” It was in December 2023 when Warren targeted lobbyists within the crypto industry themselves saying they kicked at efforts by the Biden Administration to curb terrorist financing.

To add more points to this debate, both Senator Warren and JPMorgan CEO Jamie Dimon have different views towards crypto despite their skepticism over it. Although Dimon has maintained that bitcoin is valueless and its main applications are illegal activities, JP Morgan acts as a leading authorized participant for Blackrock’s spot bitcoin ETF.

Appreciation Collected For SEC Approval Of Spot Bitcoin ETF

Multiple Crypto-minded legislators have commended the SEC’s decision to clear spot bitcoin ETF proposals and pointed out that their bill is the need of everybody.

Financial Services Committee Chair Patrick McHenry, R-N.C., pushed for legislation on his X post on Wednesday,10 January 2024 that “Despite this law needed to clarify and secure digital assets, the step made today is a significant departure from the SEC’s tradition of regulation enforcement.”

“It will offer ease of access for millions in the U.S to crypto assets allowing them professional management and lower cost,” said Senator Cynthia Lummis R-Wyo on X platform on Wednesday where she is pushing her bill with senator Kristen Gillibrand D-N.Y amidst crackdowns by regulators.

Gensler Sheds Light On The Reason For Bitcoin ETF Support

Amid this historic crypto skepticism, Gary Gensler was one of the three commissioners who voted in support to approve Bitcoin ETFs. The chair clarified that the vote approved was driven by compulsion under the law rather than personal approval.

Gensler said that the SEC move can be regarded as a response to an issue that has been under consideration for years since former Chair Jay Clayton served with this agency. He highlighted the significance of the recent Grayscale court decision in defining how to operate, stating that this was a legal position on a sustainable path.

In a statement released on Wednesday night, Gensler pronounced his judgment that the District of Columbia-base Court of Appeals ruled SEC failed to satisfy an adequate rationale for rejecting Grayscale’s bid to change Bitcoin Trust into the proposed exchange-traded product. Alongside the details listed in the approval order, Gensler mentioned those circumstances as an indication that approving the listing and trading of Bitcoin ETP shares is optimal and sustainable.

Gary’s Response to Warren’s Criticism And Implications For The Future Crypto Spot ETF

In response to criticism from public figures such as Senator Elizabeth Warren, Gensler demonstrated respect for different points of view but remained steadfast in his appeal to the law and court verdicts, said in an interview with CNBC. Speaking of future cryptocurrency ETFs, such as those based on Ethereum, he clarified that the SEC’s current position is specific to Bitcoin in the role of a non-security commodity analogous to gold. He did not explicitly hint at an active strategy for other cryptocurrencies, but he noted that the decision regarding spot Bitcoin ETFs does not necessarily create a precedent basis.

However, Gensler further clarified that the approval does not kill off Bitcoin’s volatility–the products also carry a speculative nature. He classified Bitcoin as the one, though major tool used to carry out illegal money operations.

So, getting a brief insight into the matter, what do you think about the approval of Bitcoin ETFs? How do you feel about Senator Elizabeth Warren’s and Genslers’ statements on spot bitcoin ETF approvals? Leave your precious thoughts in the comments section below.

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Published Date

January 19, 2024

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