In a sudden move, the commissioner of the United States Securities and Exchange Commission (SEC), has again presented a presented an approach different to that of her agency. Notably, the comments from the SEC commissioner come in context of the topic of the crypto regulation.
Hester Peirce, SEC commissioner opined that regulatory ambiguity is harming American investors. Through this comment, the SEC commissioner targeted the ongoing regulatory challenges for the crypto sector hindering innovation.
In a recent media interaction, the commissioner weighed in on the ongoing race to launch a spot Bitcoin exchange-traded fund (ETF). A Bitcoin futures exchange-traded fund (ETF) issues publicly traded securities that offer exposure to the price movements of bitcoin futures contracts. Through her speech, the Republican commissioner highlighted that standards applied to such a product have been “a moving target” and “not consistent with how we’ve treated other products.”
Reportedly, the SEC, which approved a futures-based exchange-traded fund for bitcoin, has a flurry of new spot Bitcoin ETF applications. These applications are going to sift through, with several renowned companies ranging from BlackRock to Bitwise recently submitting filings. However, the agency has yet to approve a spot product, and has in the past cited concerns of manipulation in the underlying spot market.
Additionally, advocates for a spot ETF have argued that futures-based ETFs also relies on ipricing from underlying spot exchange venues. The recent round of filings identify partnerships with Coinbase for market surveillance to potentially mollify that concern.
Further, Peirce commented on the scene of spot products across the globe. She stated that “in other countries there are spot products that have been approved for a long time and there’s a lot of demand for spot products.” According to her, looking at the rationale for approving a futures product, “it would seem that you could apply that same rationale and apply it a spot product.”
Furthermore, the Commissioner added that “regulatory ambiguity” stemming from the SEC is not beneficial to Americans. She added that:
I know there are a lot of people who are very critical of the SEC, and I’m quite critical often of my own agency as well. And I think one of the reasons that I’ve been critical and that some others have been critical is that in the absence of a regulatory framework that makes sense.
That ambiguity might force companies or projects to spend unnecessary timing weighing options to leave the U.S., comply, or shut down entirely. She added that in such a case, the regulator’s enforcement oriented approach has also come to add troubles for crypto entities.
I don’t think that it serves the American public to keep this sort of regulatory ambiguity so that you can come in after the fact with enforcement. Why not have some regulatory clarity?
Notably, While Peirce is serving as the commissioner of the US SEC, she is often found to have locked horns with Gary Gensler, chairperson of the agency. The SEC commissioner has a very contradictory approach to Gensler, who has been criticised for antagonistic approach to crypto entities.
Simultaneously, SEC’s approach has also been said to reflect the ideology of Gensler, hence being largely negative. Under the leadership of Gensler, the regulator has been on an enforcement spree bringing major crypto entities under its radar. Last month, the SEC filed charges against two major exchanges- Binance and Coinbase for operating illegally and offering unregistered securities.
In particular, Coinbase’s lawsuit came months after the Wells Notice. Soon after the Wells Notice, the exchange retaliated with narrow legal action. Upon Coinbase’s petition, the US Court of Appeals for the Third Circuit responded to the complaint against the SEC regarding the need for clear rules for trading digital assets.
However, this has not proved to be much helpful as the regulator continues to reiterate its radical ideology that all crypto assets are securities and no further regulations are required. To this, Peirce has often presented counter opinions.