SEC Commissioner Uyeda Expresses Concerns Over Spot Bitcoin ETF Approval Process
Summary:
After the US Securities and Exchange Commission (SEC) authorized several fund managers to list spot Bitcoin (BTC) exchange-traded funds (ETFs), SEC Commissioner Mark Uyeda voiced significant concerns about the approval process. Though Uyeda initially approved the Bitcoin ETF proposals, he questioned the SEC's decision-making strategy, worrying it could set a precedent. He argued the SEC missed an opportunity to treat Bitcoin like any other commodity and criticized the Commission for creating a new standard. Despite his concerns about the process, Uyeda supported the Approval Order because he believes the applications meet the approval standards stated in the Exchange Act.
Following the green light given by the United States Securities and Exchange Commission (SEC) for a selection of fund managers to list Bitcoin (BTC) spot exchange-traded funds (ETFs), Commissioner Mark Uyeda issued a statement pointing out several "grave concerns" linked to different parts of the approval process. Although he initially supported the significant approval of the Bitcoin ETF proposals, Uyeda found faults with the decision-making strategy used by the Commission.
The topic of concern, as Uyeda explained, is that the SEC's justifications and legal interpretation might serve as reference points for future rulings. Uyeda expressed his worries by stating, "The deficient logic in the (spot Bitcoin ETF) Approval Order might impact us in the coming years."
Uyeda also remarked that the SEC missed the chance to handle Bitcoin like any other asset, opting to single out Bitcoin ETFs after they failed its unique test for "significant size". In his view, "Under this standard, spot Bitcoin ETP [exchange-traded product] applications should have been approved long ago".
Moreover, Uyeda pointed out that the approval statement did not give any further justification for why spot Bitcoin ETPs continue to be treated differently from Bitcoin futures ETPs under the "significant market" test.
Though the Bitcoin ETF applicants did not pass the SEC's significant market test, approval was given due to "other means" meeting the requirements. Uyeda stated that after having the applicants spend years trying to fulfill the "significant market" requirement, the SEC had concocted a new standard.
The SEC, in Uyeda's opinion, sped up the approval process for the spot BTC ETFs to gain first-mover advantage. He noted the shortage of analysis concerning how the cash-only creation and redemption feature could deter fraud. Uyeda urged for greater transparency in the approval orders' analysis and reasoning.
Finally, Uyeda said, "Despite my disagreements with the legal analysis as featured in the order, I agree with issuing the Approval Order, as I have other reasons that convince me that the applications meet the approval standards stated in the Exchange Act".
Published At
1/11/2024 11:40:00 AM
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