A commissioner of the U.S. Securities and Exchange Commission (SEC) has voiced her opinion that the agency overstepped its bounds to reject a bitcoin ETF recently based on the underlying asset, bitcoin. She believes that the role of the SEC is to consider the market for the ETF, not the underlying asset itself.
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No Jurisdiction to Look at Underlying Assets
Following the SEC’s recent decision to reject the proposed rule change for a bitcoin ETF, SEC Commissioner Hester Peirce voiced her opinion in an interview with Cnbc on Wednesday. She explained that the agency has no jurisdiction to look at the underlying asset when considering whether to approve a proposed rule change for an ETF.
While Peirce voted for the approval, three other commissioners voted against. She explained that her colleagues cited “a number of reasons for that decision, and specifically what I think they did is they looked through to the underlying asset – in this case, that would be bitcoin, and they raised some concerns about the market for that underlying product.” She asserted:
I think by doing that they went beyond what the statute allows us to do and we should have really focused on the market where the exchange-traded product would trade as opposed to focusing on the underlying bitcoin markets.
Hester Peirce.
During the interview, she was asked, “One of their [SEC’s] concerns is that there may be price manipulation in bitcoin, the underlying asset, and what you are saying is that the SEC has no jurisdiction to look at the underlying asset, is that correct?” Peirce replied, “that’s correct.”
She then elaborated that, just like with other underlying assets such as gold
