US Government Accountability Office (GAO) Recommendations to SEC for Spot Bitcoin ETF Approval
The recent approval of a spot Bitcoin exchange-traded fund (ETF) has had a significant impact on the financial landscape. However, prior to the approval from the Securities and Exchange Commission (SEC), the US Government Accountability Office (GAO) made several recommendations to ensure effective regulatory control.
One of the key recommendations was for the SEC to develop a new workforce planning strategy that aligns with its strategic and performance goals. The GAO suggested that this initiative should be executed through the office of the Chief Human Capital Officer.
In addition, the GAO proposed that the SEC mandate the Director of the Strategic Hub for Innovation and Financial Technology to document its policies and procedures that support internal control measures. The GAO also urged the SEC to formulate key performance goals and measures to create a smooth regulatory atmosphere for the industry.
As of now, none of these recommendations have been implemented since the introduction of the spot Bitcoin ETF on January 10.
US SEC’s Efforts in Crypto Space
The GAO highlighted its findings regarding the US SEC’s efforts in the crypto space. While it noted that the agency has recruited talent with expertise in blockchain-based digital assets, it also identified areas for improvement.
The GAO found that there is a lack of a new workforce planning strategy to optimize performance. It also discovered that the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub) lacks documented policies, procedures, and performance goals, hindering its ability to fulfill its role effectively.
Despite these shortcomings, the GAO acknowledged that the SEC has introduced new supervisory technology tools to aid in detecting and investigating potential illicit activities in the evolving financial space.
Spot Bitcoin ETF Approval and Closure of Futures
The US SEC officially approved a spot Bitcoin ETF on January 10, 2024. Various entities, including BlackRock, WisdomTree, VanEck, Ark 21Shares, Fidelity, Invesco Galaxy, Valkyrie, Grayscale, Bitwise, Hashdex, and Franklin Templeton have been authorized to launch spot Bitcoin ETF services.
Following the approval, VanEck announced the closure of its Bitcoin futures ETF. The asset management firm cited low demand as the reason behind this decision.
Hot Take: US GAO Recommendations Highlight Areas for Improvement in SEC’s Regulatory Control of Spot Bitcoin ETF
The recent revelation of key recommendations from the US Government Accountability Office (GAO) to the Securities and Exchange Commission (SEC) prior to the approval of a spot Bitcoin exchange-traded fund (ETF) sheds light on areas for improvement in regulatory control. The GAO suggested the development of a new workforce planning strategy aligned with strategic goals and the documentation of policies and procedures supporting internal control measures. These recommendations aim to create a smooth regulatory atmosphere for the growing crypto industry. While the SEC has recruited talent in blockchain-based digital assets and introduced new supervisory technology tools, there is still room for improvement in workforce planning and establishing clear performance goals. The approval of spot Bitcoin ETFs marks a significant milestone in the financial landscape but highlights the need for continuous enhancement of regulatory practices.
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