SEC Faces Opposition From Within As it Again Rejects VanEck’s Spot BTC ETF

For the third time in a row, the Securities and Exchange Commission rejected VanEck’s proposal to create a spot Bitcoin ETF. The SEC has been consistently rejecting spot BTC exchange-traded fund applications and recently suffered a setback in court with regard to its decisions on the Grayscale Bitcoin Trust. Furthermore, the agency is again facing opposition from within, this time in the form of a joint statement by Commissioners Hester Peirce and Mark Uyeda.

SEC Rejects VanEck’s Third Application for a Spot Bitcoin ETF

This Friday, the Securities and Exchange Commission decided to reject VanEck’s latest application for a spot Bitcoin ETF. The company has been trying to list such an exchange-traded fund for years with its previous proposals being filed in November 2021 and June 2022.

Despite approving futures Bitcoin ETFs—the first one going live in October 2021—the Commission has been consistently rejecting multiple applications for the spot version. So far, companies like WisdomTree, One River, and Cathy Wood’s ark have all made multiple unsuccessful attempts.

SEC’s constant rejections even lead to a lawsuit filed by Grayscale last summer. The lawsuit, which calls the Commission’s decisions “discriminatory”, had its first day in court earlier this week. The results of the oral arguments have been widely seen as favorable for Grayscale as the panel of judges proved skeptical of SEC’s reasoning for the numerous rejections.

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Commissioners Uyeda and Peirce Criticize SEC’s Decision

Shortly after the SEC’s decision was made public, two Commissioners, Hester Peirce, and Mark Uyeda published a joint statement criticizing the agency’s approach. The statement accuses the Commission of “using a different set of goalposts from those it used—and still uses—for other types of commodity-based ETPs to keep these spot bitcoin ETPs off the exchanges”.

According to the document, the SEC, while using a consistent set of rules, is applying them in an unnecessarily cumbersome way when it comes to a spot BTC ETF compared to the process with regard to other exchange-traded products. Additionally, the release calls both the Friday decision, as well as the previous rejections, disappointing.

Commissioner Peirce has been vocally critical of her agency on multiple occasions in the past. Soon after the SEC’s $30 million settlement with Kraken was unveiled, she expressed her frustration with the Commission’s consistent use of aggressive enforcement actions, and called the approach “lazy and paternalistic”.

Do you think the Gensler-headed SEC will ever approve a spot Bitcoin ETF? Let us know in the comments below.