In a significant development in the world of cryptocurrency, the United States Securities and Exchange Commission (SEC) has finally approved spot Bitcoin exchange-traded funds (ETFs), marking a long-awaited milestone for the crypto industry.
The approval, however, has not come without its share of controversies and challenges. In this article, we will explore the key factors that contributed to this approval and the perspectives of SEC Commissioner Hester Pierce, commonly known as ‘Crypto Mom.’
Crypto Mom celebrates Grayscale’s role in Spot Bitcoin ETF approval.
SEC Commissioner Hester Pierce, also known as ‘Crypto Mom,’ has shed light on the pivotal role played by Grayscale’s appeal in the approval of spot Bitcoin ETFs. Issuers have been striving to secure approval for spot Bitcoin ETFs for over a decade, facing numerous hurdles along the way.
Had it not been for what Pierce calls “the DC Circuit-ex-machina,” this process might have dragged on even longer.
The reference to ‘DC Circuit-ex-machina’ pertains to a crucial event in October 2023 when the U.S. District Court of Appeals overruled the SEC’s decision to deny Grayscale Investment’s spot Bitcoin ETF application.
The court mandated that the SEC reevaluate Grayscale’s application to convert its Grayscale Bitcoin Trust into a spot Bitcoin ETF. This ruling set the stage for the eventual approval of spot Bitcoin ETFs, with Pierce revealing that she was one of the three Commissioners who voted in favor of the product.
While Gary Gensler and Mark Uyeda also reportedly supported the approval, Caroline Crenshaw and Jaime Lizarraga did not. Pierce has expressed her view that the SEC’s approval of 11 spot Bitcoin ETF applications does not fully address the “disparate treatment of spot Bitcoin products.”
Admitting Delayed Approval
In her statements, Commissioner Pierce criticized the SEC for not admitting its delay in approving spot Bitcoin ETFs earlier. She asserted that the Commission should have acknowledged its past reluctance in granting approvals for such products.
She remarked, “The Commission, rather than admitting error, offers a weak explanation for its change of heart.”
Pierce also highlighted the regulator’s lack of anticipation regarding the Grayscale ruling in 2023. She stated, “We squandered a decade of opportunities to do our job.
If we had applied the standard we use for other commodity-based ETPs, we could have approved these products years ago, but we refused to do so until a court called our bluff.”