SEC Commissioners Mark Uyeda and Hester Peirce have issued a joint statement highlighting the discrepancies they see in the application of the rules to ETP applicants.
On March 10, The United States Securities and Exchange Commission (SEC) has ruled against a rule change that would allow investment manager VanEck to create a spot Bitcoin trust fund. Commissioner Mark Uyeda joined his colleague, Hester Peirce, in issuing a statement criticizing the commission’s decision not to approve the listing and trading of the financial product.
The commissioners noted that the SEC has disapproved all Bitcoin (BTC) spot trust applications that have been filed, almost 20 in the last six years. Their decision on VanEck “reiterates the analysis that the Commission has given in each of these recent orders,” they said, but:
“In our view, the Commission is using a different set of targets than it used – and continues to use – for other types of commodity-based ETPs to keep these spot bitcoin ETPs off the exchanges we regulate.”
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The agency argued that there is no underlying regulated market and therefore VanEck does not have “a comprehensive surveillance sharing agreement with a regulated market of significant size related to Bitcoin spot.” Although that is a requirement that applies to all publicly traded products [ETP]:
“It is also clear that the Commission is using a uniquely burdensome definition of ‘significant’ in its analyzes of bitcoin spot ETP submissions.”
The commissioners said the SEC had not required any connection between the spot and futures markets to be demonstrated for other commodity-based ETPs and that “significant” appeared to apply to trading venue liquidity and volume in cases that did not they involve Bitcoin. The SEC is required by law to explain changes to its commodity-based ETP approval policy, they added.
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VanEck has a financial product tied to Bitcoin futures. It began its attempts to gain approval for a spot-linked product in 2017. The SEC delayed making a decision for months about the company’s current (third) application for a spot ETP.
Bull and Bear Arguments for Bitcoin – February 2023: https://t.co/hSVCdzoUD5
— FENERATOR Capital (@feneratorcom) March 5, 2023
Uyeda, who was nominated by US President Joe Biden and appointed to his post in June, released a statement on the SEC’s proposed tightening of custody standards in February, stating: “This custodial approach appears to mask a political decision to block access to cryptocurrency as an asset class.”
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