SEC Commissioner Hester Peirce Criticizes Delay in Spot Bitcoin ETF Approval — 'We Squandered a Decade of Opportunities'

U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce has strongly criticized her agency for the prolonged delay in approving spot bitcoin exchange-traded funds (ETFs). In a statement following the approval of 11 spot bitcoin ETFs, Peirce expressed her dissatisfaction and highlighted the consequences of the delay.

Ten-Year Saga Ends:

Peirce noted that more than ten years after the filing of the first spot bitcoin ETP application, the SEC has finally approved multiple applications for spot bitcoin ETFs. She described the saga as unnecessary but consequential.

Diminished Trust and Harm to Reputation:

The commissioner emphasized the harm caused by the SEC's arbitrary and capricious treatment of spot bitcoin product applications. Peirce stated that the agency's reputation has been damaged, leading to diminished trust from the public. This, she argued, would inhibit the SEC's ability to regulate the markets effectively.

Retail Investors Driven to Less Efficient Means:

Peirce criticized the SEC for driving retail investors to less efficient means of attaining bitcoin exposure in the securities markets. While spot bitcoin ETFs were delayed, the Commission had no issue approving more complex bitcoin futures exchange-traded funds.

Admission of Error:

Peirce highlighted the Commission's reluctance to admit error in its treatment of spot bitcoin products. She mentioned that the approval comes begrudgingly, and the SEC continues to impose requirements not demanded of prior commodity-based ETPs.

Missed Opportunities:

The commissioner lamented that the SEC squandered a decade of opportunities to approve spot bitcoin products. She argued that if the standard used for other commodity-based ETPs had been applied, these products could have been approved years ago.

Continued Insistence on Correlation Test:

Despite the approval, Peirce criticized the SEC's continued insistence on a correlation test for spot bitcoin ETFs, a requirement not applied to previous commodity-based ETPs.

Peirce's statement reflects her dissatisfaction with the SEC's handling of spot bitcoin ETFs and the missed opportunities for regulatory approval over the past decade. The commissioner believes that the arbitrary treatment of these applications has damaged the SEC's reputation and eroded public trust.