US GAO recommendations to the SEC before the approval of the Bitcoin ETF

The US Government Accountability Office (GAO) has recommended three key enforcement plans to the Securities and Exchange Commission (SEC) ahead of its January 10 approval of a Bitcoin (BTC) exchange-traded fund (ETF). For the digital asset market and how the regulator will interact with the nascent industry in the coming years.

The GAO recommendations were submitted to the SEC on December 15th and made public on January 16th. The GAO report recommends that the SEC prepare a new workforce plan, develop policies and procedures for innovation and financial technology (FinHub) internal controls, and develop performance goals and metrics for the center.

The GAO is an independent audit agency of the US federal government within the legislative branch that provides audit, review, and investigative services.

Assessing the SEC and its ability to deal with the growing crypto market, the GAO said the agency employed 116 people working mainly on issues related to crypto assets. However, the SEC has not developed a new workforce planning strategy to update its strategy for fiscal years 2019–2022. The GAO advised that doing so would better position the SEC to meet its future staffing needs and discharge its oversight and policymaking functions related to crypto assets.

The GAO also helps coordinate the SEC's FinHub oversight of new technologies, but has no documented policies, procedures, or performance goals. While FinHub performs operational procedures such as communicating with market participants, it does not develop policies and procedures to support internal controls.

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Following the review, GAO made three recommendations:

1. The SEC's chief human resources officer should ensure that a new human resources planning strategy is developed that is aligned with the agency's 2022-2026 Strategic and Performance Plan.

2. The head of the SEC must ensure that the director of FinHub has policies and procedures that support the internal control.

3. The Chairman of the SEC must ensure that the FinHub director's performance goals and measures are realistic, measurable and targeted.

GAO also placed a live status section on each recommendation to indicate whether the SEC had taken appropriate action on the recommendations.

In a historic ruling, the SEC approved 11 Bitcoin ETF applications on January 10. The proposal, in an internal document shared by the SEC, received three votes in favor and two dissents. To many people's surprise, SEC chief Gary Gensler made the decision to approve the first spot BTC ETF in the US after nearly a decade of rejection.

According to gold bug and prominent Bitcoin critic Peter Schiff, the SEC boss is backed into a corner on the acceptance of Bitcoin ETFs. At the same time, Gensler warned “in the near future, the introduction of new strict crypto regulations that will significantly increase the cost of Bitcoin transactions, will further reduce the ‘use' issue, resulting in a significant reduction in price.”

I think @GaryGensler is cornered on the approval of #BitcoinETFs and will soon introduce tough new #crypto regulations that will greatly increase the cost of #Bitcoin transactions, weakening the “use” case and causing a huge discount. Price.

— Peter Schiff (@PeterSchiff) January 17, 2024

All approved spot BTC ETFs began trading publicly the next day, reaching a record high of over $2 billion on the first day of trading.

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