Just last week, the United States’ first official bitcoin-based exchange-traded fund (ETF) began getting traded on the New York Stock Exchange (NYSE). Released by trading firm Pro Shares, crypto investors feel that the product – while imperfect – is a step in the right direction, and yet the SEC’s Gary Gensler is not as optimistic, and still feels certain things should take place for investors to get the right protection.

Gary Gensler: Still Plagued with Worry

The Securities and Exchange Commission (SEC) is heavily tasked with regulating the crypto space to ensure no illegal securities offerings take place. Gary Gensler is the man at the top of the SEC ladder, and despite the tremendous success the new ETF has enjoyed, he isn’t convinced that things are where they need to be, citing an alleged lack of protection for crypto traders.

In a recent interview, he stated:

Investors aren’t protected the way they are, whether they go into the stock or bonds markets that we’ve overseen so long. Without that, I think it really is, as I’ve said to others, a bit of the Wild West… These markets, largely around the world, 24 hours a day, seven days a week, don’t have the similar protections against fraud and manipulation and front-running and other abuses.

Many investors have taken a serious liking to the new ETF even though it’s based on futures technology, which is considered inferior to actual physical bitcoins by many analysts and traders. Gensler even went so far as to comment that his organization isn’t likely to have much jurisdiction over the ETF despite all it’s done to prevent such a product in recent years given that futures are overseen and regulated by the Commodity Futures Trading Commission (CFTC).

He says:

It’s a matter of bringing as much of this space within the investor protection remit.

While things may not have moved in the exact direction many traders wanted, the product has opened the door for similar products to enter the crypto space. For example, following the Pro Shares debut, Valkyrie – a digital asset management firm – unveiled its own bitcoin ETF also based on futures technology.

CEO Leah Wald commented that given the positive response Pro Shares has received, she thinks additional products such as hers are going to become rather prominent in the U.S. Grayscale Investments is also looking to convert its bitcoin trust – known as GBTC – into a bitcoin spot ETF.

We Probably Won’t See a Spot ETF In the Immediate Future

The news is good, but Gensler is likely not going to approve a physically backed bitcoin ETF anytime soon according to Nate Geraci, president of the ETF Store. He mentioned in a statement:

The SEC doesn’t believe they can properly survey crypto exchanges and combat potential fraud and manipulation. While the futures-based bitcoin ETFs are a positive first step, it appears that investors might be waiting a while on a spot product.

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