US SEC Commissioner Hester Peirce, in an exclusive interview with CNBC’s Ran Neuner, explained why she was in favor of Bitcoin ETF [exchange-traded fund] and why the Securities and Exchange Commission turned down Winklevoss’ brothers’ application for the second time.
She expressed her dissent from the commission in a public statement a week back. Peirce, who worked as a staff attorney at SEC before, returned to the agency as commissioner six months ago.
“I’m delighted to have the opportunities to weigh in on debates on cryptocurrencies. I think we have an important role to play telling the US and world that our capital markets are open to innovation and that sort of what drove me to come back to the agency as commissioner.”
The SEC has five commissioners when at full strength but currently there are four. In the case of Winklevoss’ application for Bitcoin ETF, it was 3-1 with Peirce being the only pro-crypto ETF on the panel. So the majority’s decision is the final.
She explained that the decisions normally happen at the staff level at the first instance before it comes to the commissioners. And Bitcoin ETF was initially rejected at that level. When it was re-appealed, the commissioners were confronted with the application.
Hester Peirce said the Commission claims the proposed change was not in line with the governing statute, which is Securities Exchange Act here but she differs with them.
“I take the position that actually the change that was put before us was consistent with the Exchange Act so there’s no reason for us to not allow this product to go ahead. Therefore I would have let it go forward whereas my colleagues believe that it should not go forward,” she said.
The SEC instead of looking at the specific market where ETF product would be traded looked at the underlying asset Bitcoin and its possible price manipulation in markets, Peirce said, which according to her is beyond the agency’s jurisdiction.
She pointed out that in gold and oil markets, the actual underlying assets are not scrutinized.
“It’s not within our purview to go and look at how those [gold, oil] markets are actually working, we should be focused on the market that’s trading the security, which in this case would be the exchange-traded product,” she said.
Image via Shutterstock
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