SEC’s Peirce Calls Approval of Bitcoin ETF a Milestone

“There are still pieces of it to go but I think this is a big milestone,” SEC Commissioner Hester Peirce says. Speaking on “Balance of Power,” Peirce also says the SEC must be transparent about the hack of the commission’s X account. The SEC authorized funds from BlackRock, Invesco and Fidelity to smaller competitors including Valkyrie to begin trading Thursday.

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How are you feeling this evening well well Kay I’m I’m delighted that we’re at the end of this Saga um I know there’s still there’s still uh there’s still pieces of it to go but I think this is a big milestone well it’s a milestone certainly for these these Bitcoin

Products but it also raises a question of what sort of precedent this sets if you look at the statement from the chairman Gary Gensler he was very specific that this is specific to these Bitcoin products which are non-security Commodities and there is a question of what this could mean in the future for

Essentially everything else is that door completely closed the chair is right to point out that this is specific to a particular set of products um but obviously precedent matters and so you look at the reasoning and and people will do this they’ll look at the reasoning in the in

The order and they’ll um seek to apply it to other facts and circumstances as appropriate um so I I think the only thing I will say is that one of my complaints in this area has been that we haven’t always stuck with precedent when when it comes to these kinds of exchange

Traded products we haven’t necessarily applied the same standards that we do with respect to um to other kinds of exchange traded products but it is a precedent people will point to that’s the question of course we’re all asking whether it opens the door for other ETFs backed by other

Cryptocurrencies Commission or is that in our near future again I you know every application has to be considered on its facts and circumstances but I I one of the things that I I think that we have to acknowledge is that when we when we apply a particular rationale to one

Particular product people will ask us to apply it to other products as well well and there also is the question Commissioner of just the use of these products once they do begin trading as expected tomorrow what kind of fiduciary responsibilities are there for investment uh advisers for their clients

Before allowing them to put money into these products it’s like anything else the a fiduciary is is supposed to look out for the interests of of the investors that she’s working with and that means taking into account the specific um circumstances of that investor the risk tolerance uh the other elements of that

Of that Investor’s portfolio and so it’s not a cookie cutter answer one way or the other fiduciaries are paid to make good decisions that are appropriate for that particular investor there were a few moments yesterday when we thought this had been approved a day earlier uh commissioner

As you well know everything worked out with the Twitter account at the SEC well it is I mean as as we there was a statement I think that came out saying that um we are going to be looking into this and and working with law enforcement authorities to figure out

How how this happened how yesterday’s event happened and um and I hope that we get to the bottom of it and I hope that we’re as transparent when we um when we explain what happened as we expect um the companies that we regulate to be when they experience a similar

Event well that certainly it has gotten the attention of many on Capitol Hill commissioner there have been many uh Congressional Republicans who have made their opinions known about SEC under this chair for some time now who have called a lot of attention to yesterday’s events I’d also uh point to a statement

That we got out from that Financial house Financial Services committee after this they maintain that while legislation to provide Clarity and certainty for digital assets remain necessary the steps taken today are a significant improvement over what they call the sec’s track record of Regulation by enforcement until that legislation exists even with these

Approvals aside should we expect that regulation by enforcement to continue well I haven’t seen much progress on us as a regulator setting out clear rules of the road when it when it comes to crypto products and services and I think that that’s been a complaint that I’ve had it’s been a complaint that

Others have had we could just as we changed our our tune here we could change our tune on that and and so I remain hopeful that we will that said Congress has expressed an interest in legislating in this area and look forward to seeing um their work in this

Area and they have a a clear interest in figuring out which regulatory which Regulators should have authority in this area and I look forward to um to to seeing what comes of that uh as do we commissioner as do we obviously while while we’re waiting for

That a lot will just depend on the actions of of the Securities and Exchange Commission and in addition to a lot of these um enforcement actions if you will there are also just questions around fraud and manipulation the argument initially about what chair gentler was so concerned with about

These products in the first play Spot products specifically uh compared to Futures obviously a court has ruled that that distinction uh was arbitrary and capricious but do you share any concern now that these products are approved the deed is done these things are going to trading especially in light of the

Instance we saw yesterday in which prices moved on false information do you think that more investors in institutional or otherwise now could fall into something potentially here that could be damaging given how volatile this Market has proven to be and how potentially easily it it can

Move people put if people put out false information about a a traditional security a traditional company um the stock of that company can also the price can also move so this is not unique to bitcoin or or Bitcoin exchange traded products obviously we will um continue to to look at the markets and

At the markets for these Bitcoin exchange traded products specifically and if there is bad activity we um and it’s and it’s it’s within the ETP Marketplace we have authority there to um investigate and bring enforcement actions as needed