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As the US Securities and Exchange Commission (SEC) approves the first spot Bitcoin ETF, Hester Pierce has shared her belief that the decision comes a decade too late.
ETFs Approved, Too Little Too Late?
In a long-awaited move, the U.S. Securities and Exchange Commission (SEC) recently approved spot Bitcoin ETFs, marking a significant shift in its historical stance.
Known for her pro-crypto perspective, SEC Commissioner Hester Pierce, colloquially dubbed "Crypto Mom," shared her thoughts on the approval, shedding light on the regulatory process and its implications.
Hester Pierce did not mince words when expressing her discontent with the SEC's handling of spot Bitcoin ETF applications. She emphasized that the first application surfaced more than ten years ago, and throughout the years, the SEC consistently rejected all proposals without providing transparent justifications. Pierce criticized the regulatory body for deviating from the standard approval process applicable to comparable exchange-traded products.
Pierce remarked,
"We squandered a decade of opportunities to do our job. If we had applied the standard we use for other commodity-based ETPs, we could have approved these products years ago, but we refused to do so until a court called our bluff."
Court Ruling Forces SEC's Hand
The tide turned when the U.S. Court of Appeals for the D.C. Circuit Justice mandated the SEC to review Grayscale's application for a spot Bitcoin ETF. The justice deemed the SEC's previous denials "unlawful" due to a lack of a "coherent explanation." This legal intervention compelled the SEC to reevaluate its stance, ultimately leading to the approval of spot Bitcoin ETFs.
Pierce expressed concerns over the fallout from the prolonged saga, fearing damage to the SEC's reputation and a loss of public trust.
She stated,
"Diminished trust from the public will inhibit our ability to regulate the markets effectively. This saga will taint future interactions between the industry and our staff and will dampen the rich, informative dialogue that best protects investors."
Highlighting the wasteful use of resources, Pierce criticized the SEC's expenditure of "likely millions of dollars of staff time" in blocking these applications. She asserted that this lengthy process has also clouded the public's understanding of the SEC's role in the cryptocurrency space.
Gensler's Cautionary Tone
In contrast to Pierce's pro-crypto stance, SEC Chief Gary Gensler, known for his anti-crypto rhetoric, acknowledged the court's influence on the recent approval. However, Gensler was quick to clarify that approving spot Bitcoin ETFs does not equate to the SEC endorsing Bitcoin or other cryptocurrencies. He maintained that most crypto assets are deemed investment contracts subject to federal securities laws.
As the crypto industry witnesses this regulatory milestone, the comments from both Pierce and Gensler underscore the complex and evolving nature of the SEC's engagement with digital assets. The aftermath of this approval will likely resonate within the crypto community and influence future regulatory dialogues.
