SEC Commissioner Mark Uyeda Critiques Spot Bitcoin ETF Approval, Cites Potential Repercussions in Coming Years
Mark Uyeda revealed aspects of the Bitcoin ETF approval he disagrees with, suggesting it may cause repercussions over the coming years.
United States Securities and Exchange Commission (SEC) Commissioner Mark Uyeda voiced concerns regarding the imperfect reasoning in the approval order for the spot Bitcoin ETF, suggesting potential repercussions it may cause over the coming years.
Mark Uyeda supported the landmark approvals of the Bitcoin ETF applications. However, shortly following the SEC’s approval of applications from several fund managers, the commissioner released a statement revealing disagreements with three aspects of the approval order.
Analytical Approach Problems and Lack of Transparency
Mark Uyeda expressed concerns about the underlying analytical approach employed by the commission in making its decision. The Commissioner contends that the SEC missed a crucial opportunity to treat Bitcoin on par with other commodities.
“The Bitcoin spot ETF application should have been approved long ago, and the approval order did not provide more explanations as to why in important market tests, the Bitcoin spot ETF and Bitcoin The treatment of currency futures ETFs is still different,” said Mark Uyeda, SEC Commissioner.
Mark Uyeda further claimed that the approval order fails to provide additional clarification for the continued disparate treatment between spot Bitcoin ETPs and Bitcoin futures ETPs under the “significant market” test. The Commissioner emphasized the need for transparency in the decision-making process to ensure a fair and consistent regulatory approach.
Critique of Uncertain Approval Process
Moreover, Mark Uyeda highlighted that the SEC introduced a novel standard, compelling applicants to invest years in meeting the “significant market” requirement.
“Instead of mandating applicants to make repeated attempts in uncertainty, hoping to stumble upon an argument that aligns with the “significant market” test for approval, the Commission should have proactively communicated its expectations,” commented Mark Uyeda, SEC Commissioner.
It’s noteworthy that none of the Bitcoin ETF applicants met the SEC’s significant market test. Despite this, the SEC’s approval referenced other means that satisfied the requirements.
Lack of Analysis in Pursuit of First-Mover Advantage
Finally, the Commissioner asserted that the SEC’s motivation for accelerating the approval of spot Bitcoin ETFs was driven by a pursuit of a first-mover advantage. In highlighting the absence of a thorough analysis concerning how the cash-only creation and redemption feature could mitigate fraud, he emphasised the necessity for approval orders to maintain transparency in both analysis and reasoning.
However, Mark Uyeda acknowledged that he had independent reasons for concluding that the applications meet the approval standards outlined in the Exchange Act.
Despite his reservations about the legal analysis presented in the order, he ultimately supported the Approval Order issuance.
The initial push for a spot Bitcoin ETF dates back to the early 2010s. However, the SEC has long presented formidable challenges for its approval, expressing concerns about market manipulation, investor protection, and the overall stability of the cryptocurrency market. This has led to each new submission facing a unique set of challenges, ranging from the lack of institutional-grade custodianship to questions surrounding the underlying Bitcoin market’s integrity.
Despite numerous concerns regarding the spot Bitcoin ETF approval process, the latest SEC decision signifies a notable milestone for the industry. However, as highlighted by Mark Uyeda in the proposed statement, the choices made may potentially lead to repercussions in the future.
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