The US Securities and Exchange Commission (SEC) granted approval for spot Bitcoin exchange-traded funds (ETFs) in a historic move, but this has drawn the ire of US Senator Elizabeth Warren.
Warren took to X to criticize the regulator and said that it was wrong on the policy and on the law when it comes to approving spot Bitcoin ETFs from asset managers, such as Ark Invest, Grayscale, and BlackRock.
The SEC
The senator went on to say that if the SEC is going to give crypto the opportunity to integrate itself even more deeply into the financial system, then it needs to comply with basic anti-money laundering rules.
Gary Gensler, the chairman of the SEC, issued a statement after the approval of the ETFs and said that the Commission’s actions are in accordance with the law and how the court interprets the law.
He also admitted that circumstances had changed after the regulator had been forced to review Grayscale’s application due to a court order.
The court had found at the time that the SEC had not been able to provide a coherent explanation for denying Grayscale’s application of converting its Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
According to the court, the SEC had already granted approval to Bitcoin futures ETFs, so it was unlawful for the regulator to use a different regulatory approach for similar products.
The criticism
Warren has criticized the crypto industry repeatedly because of its use in terrorist financing and money laundering.
She has claimed that groups like Islamic Jihad and Hamas have used cryptocurrency to raise more than $130 million.
Elliptic, the blockchain analytics firm, has disputed the figure and explained that the data they had provided had been ‘misinterpreted’ in a Wall Street Journal article that Warren cited.
The Senator has demanded upgrades to the Bank Secrecy Act to address the real ‘threat’ associated with crypto.
She has also sponsored the Digital Asset Anti-Money Laundering Act, which is a bill aimed at extending the Know-your-customer (KYC) requirements to numerous blockchain participants and providers.
The bill
As per the bill, networks and platforms would be required to identify self-custody crypto wallet holders and they would also be able to track their transactions.
Crypto advocacy groups have criticized the bill. One of these is Coin Center, which called the bill an unconstitutional and opportunistic assault on crypto developers, self-custody and node developers.
Warren had also taken aim at crypto industry lobbyists in December 2023 and claimed that they were undermining the efforts of the Biden Administration to eliminate terrorist financing via crypto.
The SEC finally approved 11 spot Bitcoin ETFs after rejecting numerous applications for over a decade.