In a landmark decision, the US Securities and Exchange Commission (SEC) yesterday approved trading of spot bitcoin exchange-traded funds (ETFs), a watershed moment that the industry had long anticipated. However, this decision has not been without internal controversy, as highlighted by outspoken SEC Commissioner Hester Peirce, known in the crypto community as “crypto Mom.”
Notably, the SEC's approval of the spot ETF was approved by a vote of 3 to 2. Three commissioners (Gary Gensler, Hester Peirce and Mark Uyeda) were in favor of approval, two were against (Caroline Crenshaw and Jaime Lizárraga ), as Bitcoinist reported.
bitcoin ETF Approval Reveals Split at SEC
In a detailed and critical way statement, Commissioner Peirce chastised the SEC for its long delays in approving btc ETFs, suggesting that these delays have had significant repercussions. “Today marks the end of an unnecessary but momentous saga,” Peirce declared, shedding light on the more than decade-long journey to this approval. His criticism focuses on the negative impacts that this delay has had on investors, the regulatory agency itself, and the cryptocurrency market in general.
Peirce’s statement, aptly titled “Away, damned place!” Get out, I say!” is a poignant reflection of his frustration with the SEC's handling of bitcoin ETF applications. She contrasts the treatment of bitcoin-related ETP (Exchange Traded Product) applications with the typically simpler process for other ETPs.
“It is evident even to those outside the legal field that btc-related ETP applications have been handled differently than many other ETP applications routinely submitted and approved over the years,” Peirce observed.
In her role as commissioner, a position she has held for six years, Peirce has often faced the question: “When will the Commission approve a spot bitcoin ETP?” Her response has consistently highlighted the baffling nature of the SEC's series of denials.
Peirce notes that while bitcoin-based products have been successfully traded under other regulatory frameworks, such as those governed by the Commodity Futures Trading Commission (CFTC), and although foreign jurisdictions have allowed ETP trading of btc spot, the SEC has remained steadfast in its refusal to allow such products in the US market.
Peirce expressed concern about the SEC's influence on investor behavior, pushing them towards less efficient means of investing in btc. He cited the approval of bitcoin futures ETFs in 2021 and bitcoin futures ETPs in 2022 as more complex alternatives to direct spot products.
“The complexities and management difficulties inherent in these futures-based products inevitably lead to higher costs for investors, which could have been avoided with a spot product,” he explained.
Bias against btc
Addressing the SEC's recent change in stance, Peirce highlighted the lack of substantial new evidence to justify this change. “The only material change since our last denial of a similar request was a judicial reprimand,” he stated, implying that the SEC's previous rejections were influenced by a bias against btc rather than a balanced assessment of market readiness or security concerns. investor protection.
Peirce did not shy away from discussing the broader implications of the SEC's approach. “Our arbitrary and capricious treatment of these applications not only damages our reputation in the cryptocurrency sector, but also erodes public confidence in our ability to regulate markets effectively,” he warned. He highlighted the diversion of personnel resources from other critical jobs and the confusion created among the public about the SEC's role.
Despite his critical analysis, Peirce concluded his statement on a positive note, emphasizing the importance of investor choice. “I am celebrating the right of American investors to express their views on bitcoin by participating in the bitcoin spot ETP market,” he said, applauding market participants for their steadfastness in the face of regulatory hurdles.
In summary, while the SEC's approval of bitcoin Spot ETFs is an important milestone for the integration of cryptocurrencies into major financial markets, Commissioner Peirce's statement offers a candid look at the internal challenges and conflicts within the SEC.
At the time of publication, btc was trading at $47,090.
Featured image from Franknez.com, chart from TradingView.com
