WSJ editorial slams SEC’s ‘bewildering’ Bitcoin ETF denials

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The Wall Street Journal’s editorial board has swung against Gary Gensler’s “legendary” resistance to approve a spot bitcoin exchange-traded fund (ETF).

The hard-hitting opinion piece published Wednesday, July 6 asked the Gensler-led Securities and Exchange Commission (SEC) how it handles commission applications for bitcoin-related exchange-traded products (ETPs) compared to more traditional ones. Asked for obvious discrepancies about. property and other items.

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So far, Gensler’s SEC has rejected every proposal for a spot bitcoin ETP, including two from Grayscale and Bitwise in the past week, resulting in Grayscale launching legal action against the SEC.

These persistent disclaimers prompted SEC commissioner Hester Peirce to announce Gensler’s resistance to crypto ETPs “becoming legendary”, as the commission has already approved a number of ETPs for bitcoin futures, much higher. come at a cost and involve much higher risk for investors than is proposed. Spot ETP.

Peirce also questioned why ETP was not approved in the United States despite the products being similar elsewhere.

“At what point, if any, does the increasing maturity of the bitcoin spot market and the success of similar products favor approval elsewhere?”

The editorial board has also drawn attention to the two-pronged approach employed by Gensler that makes it practically impossible for a spot bitcoin product to be approved.

This includes requiring ETP sponsors to demonstrate that a significant amount of bitcoin trading takes place on a regulated market, or that the underlying market “must have a unique resistance to manipulation beyond the security of traditional markets.”

According to the WSJ, Gensler is “absolutely aware” that the first criterion cannot be met as almost all bitcoin trading currently takes place on unregulated crypto exchanges.

The second criterion is also extremely difficult to sponsor because the SEC has set a high standard for “arbitrarily established” spot bitcoin ETPs “without explaining how to satisfy it”.

related: US Commerce Department has 17 questions to help develop crypto framework

Eric Balchunas, a senior ETF analyst at Bloomberg, told his 107,000 Twitter followers that the WSJ is “nice to see” similar views to his ETF analyst colleague James Seifert – claiming that Gensler is “hostage to innovation” to take control of crypto. Making” Mandi.

The piece comes a week after Grayscale launched legal action against the SEC for denying its application to launch a spot bitcoin ETF — claiming it inconsistent with the SEC’s regulations relating to spot and futures bitcoin ETPs. Refute the requirement that regulators apply “consistent treatment to equitable investment vehicles”. ,