SEC Commissioner Peirce on Ethereum ETF Approval
The SEC ‘Shouldn’t Need a Court’ to Approve Crypto ETFs, Commissioner Peirce Tells Coinage
By: Zack Guzman
January 23, 2024
After fighting for years within the Securities & Exchange Commission against an “unnecessary” delay over approving Bitcoin ETFs, Commissioner Hester Peirce is hopeful her agency won’t repeat the same mistake again.
In an exclusive interview with Coinage, Commissioner Peirce voiced her celebration for newly won investing freedoms with the approval of Bitcoin ETFs, and expressed her hope that the process will ensure a smoother process for approving future crypto ETFs.
“That's not how we're going to do our approvals,” Commissioner Peirce told Coinage Monday as she looked ahead to the Ethereum ETF applications that are in front of the SEC and due for a ruling in May. “The agency, having heard from a court that the approach we were taking was … not showing the kind of consistency that a regulator needs to show, I think that kind of a lesson will certainly stick with us.“
The Bitcoin ETFs were eventually approved after Grayscale’s years-long court battle against the SEC’s “arbitrary and capricious” denials. The investment company not only won its appeal in court, a three-judge panel of the D.C. Circuit Court of Appeals unanimously sided with Grayscale in August 2023 and called the SEC blocking the application “unlawful.”
“We shouldn't need a court to tell us that our approach is ‘arbitrary and capricious’ in order for us to get it right,” Commissioner Peirce said. “So, I certainly hope that won't be the case.”
That being said, an Ethereum ETF approval process will certainly bring its own set of challenges. With two ETH ETF applications from VanEck and Ark Invest due for a ruling by May 23, the market is currently split on whether they win approval. SEC Chair Gary Gensler was also very particular in his own statement after the agency approved Bitcoin ETFs that those particular approvals shouldn't signal any sort of change in thinking when it comes to other “crypto asset securities.”
“As we saw, I think even with the Bitcoin exchange traded products, there's a lot of work that goes into getting an exchange traded product ready for market," Commissioner Peirce said. “These things can take a long time and can be difficult and really do depend on the facts and circumstances of each product.”
Regardless of the timeline, Commissioner Peirce seemed upbeat about her agency taking the lesson to inch closer to allowing for more investing liberty in the crypto arena. She said she was optimistic progress was being made since she was on Coinage last summer to express her confusion over Bitcoin ETFs being denied and regret that the SEC continued to regulate crypto through enforcement actions. Now, with Bitcoin ETFs approved, investors have an option they didn’t have before.
“The whole point of having a commission is to have different points of view reflected in rulemaking and I think you saw that play out with the exchange traded products,” she said. "I think one important viewpoint to have reflected is this is a country based on the ability of people to make choices for themselves.”
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