The US welcomed spot Bitcoin exchange-traded funds (ETFs) on Thursday following the approval of 11 applications by the Securities and Exchange Commission.
The approval is a critical milestone for investors that the crypto-friendly Commissioner Hester Peirce slams the securities regulator for foot-dragging the nod since the 2013 bid by the Winklevoss twins.
The Gary Gensler-led SEC issued the approval notice to allow the spot Bitcoin ETFs to start trading on Thursday. Although grateful, one SEC Commissioner is slamming the regulator for foot-dragging the product approval, leading to a toll experience for the investors and the crypto industry.
Peirce Labels SEC’s Logic to Deny Spot Bitcoin ETFs Perplexing
Commissioner Pierce echoed her longtime advocacy for digital assets that earned her ‘Crypto Mom’ reference by the community and issued an optimistic statement following Wednesday’s action. Her statement avoided the begrudging tone conveyed by SEC’s chair, who considered the approval to be prompted by the legal conviction.
Peirce hailed the approval as ending the unnecessary consequential saga, observing that the initial spot Bitcoin ETF traces to over ten years. She recognized that the investment community has regularly reiterated the necessity of the spot Bitcoin exchange-traded product (ETP) in her six years with the SEC.
Peirce indicated that the logic behind the strings of denials conveyed by the SEC is perplexing. The pro-crypto Commissioner indicated that predicting the approval timelines became impossible since the review process for the filings differed from the relatively straightforward process deployed toward the comparable ETPs.
Peirce noted that the SEC shifted the goalposts many times and often slapped DENIED on a series of applications, starting with the Winklevoss bid in 2013.
Peirce indicated that the nonaction by the SEC drove the retail investors towards the less efficient alternatives to gaining Bitcoin exposure within the securities markets. The Commissioner slammed the regulator for failing to admit the error and instead offered a weak explanation for the sudden change of heart.
Peirce wrote that the SEC squandered a decade of opportunities to execute its job. She decried the failure of the SEC to apply the standard used in other commodity-based ETPs. The Commissioner indicates that the regulator could have applied the products years ago, and the foot-dragging ended when the court called out the bluff.
The decision undertaken by the SEC to approve the bids for spot Bitcoin ETFs traces to the US Court of Appeals in the DC Circuit, which directed the regulator in August to review the bid by Grayscale Investments. The crypto firm sought to convert its Bitcoin Trust (GBTC) into the spot Bitcoin ETF.
The justice ruled that the absence of a coherent explanation for the denial portrayed an unlawful decision.
Gensler admitted the court ruling in the Grayscale case that though the Bitcoin ETF applications were similar to the past attempts, the circumstances had changed.
Gensler added that guided by the circumstances, the Commission was obligated to approve the listing as the sustainable path to allow the spot Bitcoin ETP shares to trade.
Peirce’s Slams Delays by SEC
Peirce considers that the approval granted on Wednesday will not undo the multiple harms generated by the disparate treatment that the SEC handed to the spot Bitcoin products. She decried the harms though noncommittal on the litany of challenges she attributes to the staunch anti-crypto approach portrayed by SEC in the past decade.
Peirce warns that the arbitrary treatment of applications within the area will hurt the regulator’s reputation beyond crypto. The diminished trust SEC sows in the public will progressively inhibit its capability to regulate the crypto markets effectively.
Peirce warns the saga trains future interactions between the crypto industry and SEC’s staff. Such an outcome is likely to dampen the rich, leading to informative dialogue necessary to safeguard investors.
Peirce laments the waste of resources, running into millions of dollars in staff time spent towards blocking the Bitcoin ETF applications. The process muddled the individuals’ understanding of the role played by the SEC.
Peirce admitted that Congress hardly authorized the SEC to inform the public of suitable investments. Instead, the SEC abused administrative procedures to withhold the investments the regulator disliked from the public.
Peirce considers that the SEC’s denial actions yielded the artificial frenzy witnessed around the Bitcoin ETFs. Had the SEC complied with the rules, such a circus atmosphere would have been avoidable.
Peirce considers that the foot-dragging process led SEC to alienate emerging product innovations’ from the US space. It forced the SEC into a costly legal battle to have the spot Bitcoin ETFs approved.
Peirce ruled out celebration for the Bitcoin-related products; instead is relieved that American investors can express their thoughts on Bitcoin ETPs trading.
Peirce hailed the perseverance portrayed by the market participants in bringing the product they thought investors desired. She considers that the applicants appeared unmoved by the SEC’s obstruction, thereby delivering the elusive product to the American investors.
Editorial credit: JRdes / Shutterstock.com
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