A Commissioner with the United States Securities and Exchange Commission (SEC) is challenging the agency’s methods for certification of crypto spot exchange-traded funds (ETFs). This might be good news for the cryptocurrency market, which seems to be recovering after a few bad days.
In her remarks at the “Regulatory Transparency Project Conference on Regulating the New Crypto Ecosystem: Necessary Regulation or Crippling Future Innovation?” on June 14, Commissioner Hester M. Peirce asked the SEC to stop denying categorically spot crypto exchange-traded products.
Everyone asks me when a spot bitcoin ETP will be approved. Here’s my answer: https://t.co/25M5kCDF1Q
— Hester Peirce (@HesterPeirce) June 15, 2022
According to Peirce, the Commission’s opposition to a spot bitcoin ETP is becoming virtually legendary, and she does not know when the SEC will approve a Bitcoin (BTC) ETP.
Reasons hard to comprehend
She emphasised:
“The reasons for this resistance to a spot product are difficult to understand apart from a recognition that the Commission has determined to subject anything related to bitcoin—and presumably other digital assets—to a more exacting standard than it applies to other products.”
In addition, discussing this sort of Bitcoin ETF, the Commissioner stated:
“The continuing refusal of the SEC to approve a spot bitcoin ETP is puzzling to many agency observers. The bitcoin market has grown, matured, become more liquid, and attracted more, and more sophisticated (…) participants.”
Positive examples from other nations
In addition, she mentioned that spot ETPs had been launched in other countries without problems and with considerable investor interest. In Canada, for instance, the first spot bitcoin ETP managed CAD$1 billion one month after its introduction in 2020.”
She went on to add that spot ETPs are popular in Europe, where there are over 70 cryptos ETPs with an estimated $7 billion in assets. ETPs have functioned in other jurisdictions despite turbulent markets.
Peirce concluded by urging the SEC to start a more productive road to crypto regulation and stated that:
“Regardless of what one thinks of crypto, it is in both investors’ and the SEC’s interest to take a more productive approach. Using the tools Congress has given us and drawing on public input, we can provide regulatory clarity, facilitate iterative experimentation, and pursue bad actors in the crypto space.”
She closed her remarks by anticipating that the SEC’s next panel will explore ways in which it may adequately advance crypto regulation.
Hardline position on crypto
In the past, the SEC was notorious for its uncompromising attitude toward cryptocurrencies and associated items. Previously, Grayscale Investments may sue the SEC if it fails to turn the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF.
This stance has been so harsh that it prompted a group of U.S. congressmen to send a letter to the agency denouncing the SEC’s information-gathering method regarding crypto startup companies as stifling innovation.
