Mad Money Host Jim Cramer Praises US Securities And Exchange Commission (SEC) Chairman Gary Gensler for Not Approving a Bitcoin Spot Exchange-Traded Fund (ETF). Cramer He warns investors to stay away from cryptocurrencies, as the SEC usually alerts people about non-compliant companies.
Jim Cramer expresses gratitude towards Gary Gensler
CNBC’s Mad Money Host Jim Cramer thanked the head of the US Securities And Exchange Commission (SEC), Gary Gensler, for not allowing a Bitcoin spot exchange-traded fund (ETF). Cramer is a former hedge fund manager and co-founder of Thestreet.com, an educational website about finance.
The Mad Money Host tweeted on Friday:
Thank you, SEC head Gary Gensler, for standing up to the crypto bullies who wanted an ETF. They could have been brought to their knees by Genesis Global, which is now filing for bankruptcy.
Cryptocurrency lender Genesis Global Capital LLC is a sub-company of venture capital firm Digital Currency Group (DCG). After a lawsuit filed by the SEC, Genesis filed for bankruptcy. The SEC alleged the company and exchange were insolvent. Gemini users can buy unregistered securities through the Gemini Earn Program to lend cryptocurrencies.
Another DCG subsidiary is digital asset manager Grayscale Investments. The company has been making a concerted effort to make its flagship product, the Grayscale Bitcoin Trust (GBTC), a spot bitcoin ETF. However, the SEC has not approved the filing of the company. In June of last year, Grayscale filed a lawsuit against the SEC to challenge the rejection of its application for a bitcoin ETF.
In addition, Bloomberg reported earlier this month that the US Department Of Justice’s (DOJ) Eastern District Of New York is working with the SEC to investigate internal transfers between Genesis and DCG.
Not everyone agrees with Jim Cramer
Many Bitcoin supporters on Twitter disagreed with the Mad Money host. Lawyer John Deaton wrote: “So anyone who supports a spot BTC ETF is a bully? Jim Cramer thinks people protected by Gary Gensler because a spot ETF is not available, even though there are BTC futures and short ETFs. These didn’t cause any problems for companies.” Nate Geraci, President of ETF Store opined:
I would have the exact opposite opinion. The SEC’s failure to approve a spot BTC ETF led to GBTC arbitrage trading, where big accredited investors took advantage of retail investors. The bulk of Genesis’ solvency issues were caused by loans to 3AC, etc. that executed the arbitrage trade, which blew up.
Cramer has repeatedly warned the SEC that it is “cracking down” on non-compliant cryptocurrency companies, suggesting that investors should exit crypto now. “I wouldn’t touch cryptocurrencies in a million years,” the Mad Money host has emphasized. He often quotes John Reed Stark, former SEC Internet Enforcement chief, who recently said that “a regulatory crackdown is just beginning.” Following the SEC’s lawsuit against Gemini and Genesis, Cramer tweeted: “Here is the time to crack down: Gemini and Genesis you are the first. We had a great short race. Ka-ching. Ka-ching.”
SEC is criticized for its application-focused approach
Although Cramer appreciated Gensler, many people criticized the SEC chairman for focusing on enforcement rather than taking action to prevent the FTX disaster. He had a meeting with several former FTX CEOs, including Sam Bankman-Fried (SBF).
Rep. Tom Emmer (R-MN) commented on Twitter after the SEC announced charges against the accused Gemini and Genesis: “Once again, Gary Gensler is too late to protect anyone. It is clear that his “regulate by application” strategy hurts the average American.” In a follow-up tweet, the lawmaker wrote:
When can we expect proactive guidance from Gary Gensler instead of allowing the industry to interpret the rules through subsequent enforcement actions?
