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Following the recent rejection of another Bitcoin ETF proposal by the U.S. Securities and Exchange Commission (SEC), one of SEC’s Commissioners, Hester Peirce, has criticized the agency’s decision. According to Peirce, the SEC’s rejection indicated that the chance of getting a bitcoin ETF approval was almost impossible and the securities agency seemed unwilling to encourage innovation.
Crypto Mom Disagrees With SEC’s Bitcoin ETF Rejection
In a dissenting statement published on the SEC’s website on Thursday, February 26, 2020, Hester Peirce, fondly called ‘Crypto Mom’ by the virtual currency community, disagreed with the securities agency, who, yet again, knocked out another Bitcoin ETF proposal.
An excerpt from the statement reads:
“This line of disapprovals leads me to conclude that this Commission is unwilling to approve the listing of any product that would provide access to the market for bitcoin and that no filing will meet the ever-shifting standards that this Commission insists on applying to bitcoin-related products—and only to bitcoin-related products.”
The SEC rejected a BTC ETF proposal filed by Wilshire Phoenix and NYSE Arca, on the grounds that the bid did not meet the agency’s requirements. Speaking to BTCManager back in June 2019, the CEO of Wilshire Phoenix felt confident that the Bitcoin and Treasury Investment Trust product met all the SEC’s regulatory criteria.
But in September 2019, the securities agency delayed approval on Wilshire Phoenix’s proposal to garner more opinion from the public before deciding if the bitcoin ETF gets a nod or a rejection. The firm later amended its proposal with the hopes of getting a green light from the regulatory agency.
Peirce further commenting on the latest decision by the SEC, noted that as contained in Section6(b)(5) of the Exchange Act, the SEC is required “to look to the rules of the exchange seeking to list the product, not the attributes of the assets or markets underlying the product to be traded.”
Also, the agency applied a ‘heightened standard’ only for BTC ETF products. The Commissioner further pointed out that other non-bitcoin-related products endorsed by the SEC did not follow the strict requirements faced by BTC ETF products.
In addition, Peirce described the regulator’s approach as ‘frustrating’, because the SEC was not ready to embrace innovation.
Bitcoin ETF Dream Gone With the Wind
The Wilshire Phoenix Bitcoin ETF joins the list of BTC ETF products kicked out by the U.S. financial watchdog. Like the latest rejection, the commission continues to express the same concerns: market manipulation and unregulated crypto industry.
VanEck and SolidX filed with the securities agency for a physically-backed BTC ETC in August 2018. However, the filing faced a series of delays until a withdrawal happened in January 2019. VanEck, in collaboration with CBOE reapplied shortly after the withdrawal.
In September 2019, Van Eck and SolidX decided to apply the SEC’s exemption rule to sell a limited Bitcoin ETF. But the VnEck/SolidX bid came to an end, following an unexpected withdrawal by CBOE.
Bitwise also filed its BTC ETF product with the U.S. financial watchdog in January 2019, which also faced postponement. Just like VanEck/SolidX, Bitwise also withdrew its application