The regulatory ambiguity surrounding the digital-asset industry harms American citizens. This was said by the SEC Hester Peirce.
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She noted a \”mismatch\” in the agency’s approach to the bitcoin-ETF compared with the agency’s decisions regarding other products.
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\”Spot exchange-traded funds in other countries have been approved for a long time, and there is huge demand for them. It seems to me that the SEC could apply the rationale used for futures-based products to a similar ETF,\” — she said.
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According to Peirce, such ambiguity could force companies or projects to spend unnecessary time evaluating whether to leave the United States, comply with requirements, or shut down entirely.
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\”I don’t think maintaining this kind of regulatory ambiguity serves the interests of American society. … Why not bring some clarity?\”, — she suggested.
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In 2021 the SEC approved products ProShares and Valkyrie Investments, based on bitcoin futures on the CME. To date, the Commission has rejected all proposals for \”physical\” ETFs based on digital gold, citing concerns about manipulation in the spot market.
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In December 2021, Grayscale admitted that the regulator may have violated the Administrative Procedure Act in approving a bitcoin-futures-based ETF while rejecting applications for its \”physical\” variant.
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In July 2022, the Wall Street Journal accused the head of the SEC Gary Gensler of a \”confusing\” approach to approving a spot ETF based on digital gold.
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The wave of applications from BlackRock, Valkyrie, Fidelity Investments, WisdomTree and Invesco, as well as ARK Invest with 21Shares could potentially ease the agency’s concerns about manipulation.
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They contain refined proposals taking into account the Commission’s criticisms regarding the so-called joint surveillance agreement or details of this mechanism.
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Analysts at Bernstein reckon the regulator will not be able to sustain its negative stance toward spot ETFs tied to the first cryptocurrency for long.
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Circle CEO Jeremy Allaire predicted that the recent wave of filings to launch spot-based digital-gold exchange-traded funds would lead to SEC approval.