Jim Cramer thanks SEC chairman for standing up to ‘crypto bullies’ seeking approval for Spot Bitcoin ETF

The Mad Money host and lead “financial influencer” across the Atlantic, Jim Cramer, thanked Securities and Exchange Commission (SEC) Chairman Gary Gensler for standing up to “crypto bullies“who want the regulator to approve a bitcoin exchange traded fund (ETF). Jim Cramer has repeatedly warned of the SEC’s crackdown on non-compliant crypto companies, urging investors to get out of the asset class now.

Jim Cramer praises SEC chairman Gary Gensler

CNBC’s Mad Money host Jim Cramer thanked U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler for not approving a bitcoin exchange traded fund (ETF). Jim Cramer is a former hedge fund manager who co-founded Thestreet.com, a financial news and literacy site.

Thank you, SEC Chief Gary Gensler for standing up to the crypto bullies who wanted an ETF. They could have been blown to kingdom come by Genesis Global, now filing for bankrupcty

Jim Cramer (@jimcramer) January 20, 2023

The Mad Money host tweeted Friday:

Thank you, SEC chief Gary Gensler, for standing up to the crypto bullies who wanted an ETF. They could have been blown to smithereens by Genesis Global, which is now filing for bankruptcy.

Crypto-currency lender Genesis Global Capital LLC is part of a subsidiary of venture capital firm Digital Currency Group (DCG). Genesis filed for bankruptcy following an SEC lawsuit alleging that the company and crypto-currency exchange Gemini offered and sold unregistered securities to retail investors through the Gemini Earn crypto-currency lending program.

Another GDC affiliate is digital asset manager Grayscale Investments, which has been trying to convert its flagship Bitcoin Trust (GBTC) product into a bitcoin cash ETF. However, the securities watchdog did not approve the company’s application. In June last year, Grayscale filed a lawsuit against the SEC challenging the regulator’s decision to reject its bitcoin ETF application.

In addition, Bloomberg reported earlier this month that the U.S. Department of Justice’s (DOJ) Eastern District of New York and the SEC are considering a lawsuit over the internal transfers between Genesis and DCG.

Many people disagree with Cramer

So anyone who favored a Spot #BTC ETF is a bully? Cramer believes people were protected by @GaryGensler NOT granting a spot ETF, even though #BTC futures and short ETFs exist? These companies didn’t get in trouble because of the of #Bitcoin https://t.co/qVRxVgsxVQ

John E Deaton (@JohnEDeaton1) January 20, 2023

Many bitcoin supporters on Twitter disagreed with the Mad Money host. Attorney John Deaton wrote: “So anyone who favored a Bitcoin ETF is a bully? Cramer believes that people were protected by Gary Gensler who did NOT grant a cash ETF, even though futures and short ETFs exist. These companies have not been in trouble because of bitcoin. “Nate Geraci, president of ETF Store believes that:

I would say exactly the opposite… The SEC’s failure to approve the spot ETF led to the rise of the GBTC arbitrage trade (where large accredited investors took advantage of individuals). A significant part of Genesis’ solvency problems stem from loans to 3AC, etc. to execute this arbitrage trade (which has exploded).

I would argue exact opposite…

SEC failing to approve spot ETF led to rise of GBTC arbitrage trade (where large accredited investors took advantage of retail).

Meaningful portion of Genesis solvency issues stem from lending to 3AC, etc to execute that arb trade (which blew up). https://t.co/GEt8r33Plp

Nate Geraci (@NateGeraci) January 20, 2023

Cramer has repeatedly warned that the SEC would make a “raid” of non-compliant crypto companies, advising investors to get out of crypto now. “I wouldn&t touch crypto in a million years,” the Mad Money host stressed. He often quoted John Reed Stark, the SEC’s former head of Internet enforcement, who recently said that a “regulatory onslaught is just beginning.” After the SEC’s case against Gemini and Genesis, Cramer tweeted, “Here comes the crackdown: Genesis and Gemini are first. We’ve had a fabulous run of short sales. Ka-ching. Ka-ching.“

SEC criticized for its enforcement-centric approach

While Cramer appreciated Gensler and the SEC, many people criticized the SEC chairman for focusing on enforcement and not taking action to prevent the FTX disaster after several meetings with former FTX CEO Sam Bankman-Fried (SBF).

Congressman Tom Emmer (R-MN) commented on Twitter last week after the SEC announced charges against Gemini and Genesis:”Gary Gensler is once again late to the game, not ‘protecting’ anyone. It is clear that his political strategy of ‘regulation by enforcement’ is hurting everyday Americans.“In a subsequent tweet, the lawmaker wrote:

Gary Gensler, when can we expect proactive guidance instead of letting the industry interpret the rules of the road through your after-the-fact enforcement actions?