Bitcoin ETF Applications Aren't Being Judged Fairly: SEC Commissioner Peirce

SEC Commissioner Hester Peirce has repeatedly voiced her confusion and frustration with the ways her agency is regulating crypto. Both of those emotions reached new heights after the SEC returned spot bitcoin exchange-traded fund applications from Fidelity and BlackRock last week because they were not clear and comprehensive enough.

In a new interview with Coinage, Commissioner Peirce criticized the SEC's inconsistency in judging Bitcoin ETF applications relative to other applications the agency reviews.

"It's a little bit hard for me to try to untangle that web of why we haven’t approved one," she said. "Facts and circumstances do matter, but based on the facts and circumstances I've seen, I just can't figure it out."

So far, more than three dozen Bitcoin spot ETF applications have been rejected by the SEC over the last couple years. A new wave of hope arose in June as filings were submitted on behalf of traditional asset managers including BlackRock and Fidelity Investments, which both boast incredible success rates in getting ETFs approved. But the Wall Street Journal reported last week that the SEC returned the filings because they didn't list which spot exchange they would use to maintain a “surveillance-sharing agreement."

Bitcoin's price retreated about 3% Friday after the Journal broke the news on the latest applications getting returned. While there are already other market products like Bitcoin trusts and futures contracts offering some indirect access to Bitcoin exposure for money managers, investors are betting a spot Bitcoin ETF approval will unleash a wave of capital into crypto's largest digital asset.

Commissioner Peirce noted it has been strange to the agency apply rules differently to Bitcoin applications relative to others in the past.

"The standards we've been applying with respect to Bitcoin exchange traded products have [not been] ... consistent with how we've treated similar products," she said. "We obviously have the [Bitcoin] futures products that have been approved ... 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 and I think if you look at the rationale for approving a futures product, it would seem that you could apply that same rationale and apply it a spot product."

As one of five SEC Commissioners, Peirce has not been able to do much to block the continued war SEC Chair Gary Gensler has waged on the wider crypto industry. Chair Gensler has repeatedly said there is a path for crypto companies to "come in and register" at the SEC — despite simultaneously declining to provide any clarity on many important questions the industry has.

When asked whether she found it strange for Chair Gensler to continue to insist that there is a path for crypto companies to come in and register with the SEC, while he also continues to bring enforcement action after enforcement action, Commissioner Peirce paused for a moment before providing a legendary answer:

"Well, I mean, I haven't seen a lot of evidence of it working very well."

This is an excerpt from a larger Coinage interview with SEC Commissioner Hester Peirce set to debut on Wednesday. Coinage is a community-owned Web3 outlet. You can mint a Digital Membership Pass to co-own what we're building. Subscribe to our newsletter to never miss our stories!