Key Insights
- Gary Gensler, the current SEC Chief is on his way out of office, and the crypto industry is already putting things in place.
- Last week saw a wave of about a dozen crypto ETFs filed with the SEC across cryptocurrencies like Solana and XRP.
- This move comes amid expectations of a more crypto-friendly environment under Paul Atkins, the incoming SEC Chief.
- The incoming Trump administration is also expected to be favorable for the crypto industry over the coming four years.
Gary Gensler’s departure from his role as the US Securities and Exchange chair has sparked a wave of activity in the crypto space.
The expectations of a friendlier regulatory environment under the new SEC Chair has pushed asset managers to file a wave of crypto ETFs with the SEC.
Here’s a closer look at the latest developments and what they mean for the future of crypto regulation.
A Surge in ETF Applications Marks Gensler’s Exit
Gensler is expected out of office on 20 January, the same day as the Donald Trump inauguration as the next president of the US.
Just before his departure, however, the SEC received a wave of ETF applications from several asset managers between 17 and 19 December.
These industry players appear to be capitalizing on the expected changes in policy under Paul Atkins, Gary Gensler’s successor.
The incoming Trump administration is also expected to align with this leadership change and create a supportive environment for crypto.
Key ETF Proposals Submitted
The most notable of these ETF filers was ProShares, which began the wave of applications.
ProShares filed for a Solana Futures ETF with the SEC on 17 January, with an application that aims to provide investors exposure to Solana via futures contracts, rather than direct ownership.
However, according to ETF analyst James Seyffart, a Solana ETF might take some time to be approved, due to the absence of CME futures for the cryptocurrency, and liquidity issues of Coinbase’s SOL futures market.
CoinShares also introduced its “CoinShares Digital Asset ETF,” which is tied to its proprietary Compass Crypto Market Index.
This index is aimed at covering 10 cryptocurrencies like XRP, Cardano and Chainlink, with Bitcoin and Ethereum dominating 70%.
Other ETF Applications Submitted.
Tidal DeFi also submitted its “DADS ETF”, which focuses on debt securities related to ventures like crypto mining, payment companies, and much more.
VanEck was another filer with its Onchain Economy ETF.
VanEck’s proposal involves an actively managed fund that is designed to invest in blockchain-related businesses like software developers, infrastructure providers, exchanges, and much more.
Asides the Solana ETF application ProShares submitted filings for leveraged and futures ETFs tied to XRP.
This is similar to moves from other issuers like 21 Shares, BitWise, Canary Capital and WisdomTree.
How The Leadership Transition Is Fueling Optimism
According to crypto speculators, Paul Atkins, the incoming SEC Chair, is more crypto-supportive than Gary Gensler.
Because of this, industry leaders have speculated that his leadership could bring some regulatory clarity to the space.
According to Chad Steingraber in a recent tweet, “they [the ETF issuers] waited until the end of business day on the last of the Biden SEC to start filing crypto ETFs.”
The timing of these filings also shows that the crypto industry expects a shift towards crypto-friendly policies with the change in leadership.
In contrast, Gary Gensler’s time at the SEC from April 2021, was marked by aggressive enforcement actions.
The agency went after some of the biggest crypto names in the space, including Ripple, Binance, Coinbase, Uniswap and even OpenSea at some point.
Gensler continues to make headlines despite his exit, with the SEC even issuing a $38 million fine on the Digital Currency Group.
The SEC is also appealing the ongoing XRP case against Ripple in an obvious show of Gensler’s strict regulatory approach.
Overall, the wave of ETF applications shows the crypto industry’s readiness for regulatory change, and the next four years will determine what comes next for the space.
