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SEC Commissioner Mark Uyeda, while voting in favor of these landmark approvals, has publicly voiced reservations regarding the decision-making process adopted by the commission.
On Wednesday, the United States Securities and Exchange Commission (SEC) greenlit the establishment of several spot Bitcoin exchange-traded funds (ETFs).
The decision, while marking a progressive step in the integration of cryptocurrency into mainstream finance, was not without its internal controversies.
Commissioner Uyeda, a pivotal figure in the approval process, acknowledged his support for the Bitcoin (BTC) ETF applications.
Yet, he has raised concerns about the analytical methodology the SEC employed to arrive at its conclusion.
“The flawed reasoning in the [spot Bitcoin ETF] Approval Order could reverberate for years to come,” he wrote.
His apprehensions stem from what he perceives as a missed opportunity by the SEC to treat Bitcoin akin to other commodities.
Delving deeper into his criticism, Uyeda pointed out that the commission has historically distinguished Bitcoin ETFs through an unprecedented ‘significant size’ test – a standard that, according to him, the Bitcoin ETFs should have passed long ago.
This approach, he argued, contrasts sharply with how Bitcoin futures ETPs (Exchange-Traded Products) have been treated under the same test.
The SEC’s decision, in his view, lacks adequate explanation for this discrepancy.
Uyeda Criticizes SEC for Not Providing Clearer Guidelines
The Commissioner also critiqued the SEC for not providing clearer guidelines for applicants, who spent years trying to meet the ‘significant market’ requirement.
He commented on the SEC’s introduction of a new standard, which, according to him, left applicants grappling in the dark.
Uyeda stressed the need for the Commission to be more transparent and forthcoming about its expectations, thereby streamlining the approval process.
Another dimension to Uyeda’s concerns relates to the SEC’s rationale behind expediting the spot Bitcoin ETF approvals.
He speculated that a motivation for this might be the SEC’s desire to gain a first-mover advantage in the evolving cryptocurrency market.
Moreover, he raised questions about the lack of analysis regarding the cash-only creation and redemption feature of these ETFs, which is crucial in preventing fraudulent activities.
“However, because I have independent reasons for concluding that the applications satisfy the standards for approval set forth in the Exchange Act, I support the issuance of the Approval Order despite my objections to the legal analysis set forth in that order,” he said.
SEC Approves 11 Spot Bitcoin ETFs
In a highly anticipated decision, the SEC announced on Wednesday that it has approved rule changes allowing the creation of Bitcoin ETFs in the United States.
The SEC’s decision is expected to have far-reaching implications, including the transformation of the Grayscale Bitcoin Trust, which currently holds approximately $29 billion worth of Bitcoin, into an ETF.
Additionally, major issuers like BlackRock’s iShares and Fidelity are preparing to launch their own competing funds, with trading set to commence as early as Thursday.
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