SEC Commissioner Hester M. Peirce urged the SEC to embrace FinTech innovation and permit more risk-taking by investors in cryptocurrencies.
In remarks before the Cato Institute's FinTech Unbound Conference, Ms. Peirce elaborated on her dissent from the SEC's rejection of an exchange-traded product ("ETP") that was designed to give investors exposure to bitcoin. Ms. Peirce explained her disagreement with the SEC's decision to deny an exchange's bid to list shares of the Winklevoss Bitcoin Trust (see previous coverage), asserting that "it seemed to turn on the Commission's assessment of bitcoin rather than on the exchange's plans for trading the [ETP]." She went on to state:
"The focus on the lack of regulation of cryptocurrencies particularly troubled me. What authority do we have to require that assets underlying securities be regulated as if they were securities? Even if we had this authority, private markets can and do regulate themselves."
Ms. Peirce urged the SEC to:
The SEC Division of Trading and Markets rejected applications for nine exchange-traded funds tied to bitcoin futures markets from three separate companies on the grounds that they lacked adequate means of preventing "fraudulent and manipulative acts and practices."
The SEC disapproved of a proposed rule change to list and trade shares of a bitcoin-backed exchange-traded fund on the Bats BZX Exchange.