An obscure rule within the regulatory world administered by the federal Security Exchange Commission turned out to be the undoing of banks, yet again. Long enemies of crypto, banks have suddenly realized that the investor demand for crypto is far bigger than they ever imagined or through the could control. And we're not talking about main street investors either. These are massive whale types who move their money around in at least six figures to the left of the decimal point.

What Do You Mean Our Bank Wasn't Whitelisted?

As it turned out, the very rule designed to keep banks from misusing their commercial assets in crypto also kept them out of the initial profits of the latest BTC EFTs. SAB 121 was crafted partially in response to putting up a wall on the banks so they would do in crypto the same thing they did with mortgage-backed securities, basically betting their assets and deposits on risky market ventures that go poof and make the given bank insolvent. 

However, the very same BTC EFTs became a big success. As a result, the banks got left out in the cold, watching all the EFT assets go off to a different type of holder by the millions of dollars, including profits the banks otherwise would have realized. So now they want in on the party, putting on the big lobbying pressure through trade associations to the SEC, basically saying let us in on the party by revising SAB 121 and make a distinction that ETFs aren't crypto buy the definition currently being used in SAB 121.

Shifting Sand Underfoot

Gary Gensler, the chair of the SEC, is now well-known for his anti-crypto attitude, especially on any thing new in the market that might even smell of investment. However, it's an election year, and the Congressional pressure is mounting on him. He's already weakened enough to allow crypto ETFs, and the banks will make short work of any resistance he has to not cooperate. The whole affair is rather comical if it wasn't for the fact that Gensler has doled out immense damage to multiple crypto foundations, exchanges and companies along the way. And now, with the banks about to abandon his anti-crypto position entirely, Gensler is really looking like a lame duck on the way out.