Four members from the House Financial Services Committee of the United States Congress have sent a letter to the Securities and Exchange Commission (SEC) Chairman Gary Gensler, demanding him to approve the listing of spot Bitcoin (BTC) exchange-traded funds, or ETFs, “immediately.”
In the letter dated September 26, U.S. Representatives Mike Flood (R-Nebraska), Wiley Nickel (D-North Carolina), Tom Emmer (R-Minnesota), and Ritchie Torres (D-New York), expressed their concerns about the securities watchdog hesitating to greenlight Bitcoin ETFs for U.S. spot markets.
House Financial Services Committee Requests The SEC To Approve All Spot Bitcoin ETF Applications
The bipartisan group claims that the SEC continues to discriminate against the investment product despite the ruling of the Court of Appeals last month, which said the Commission had violated the Administrative Procedures Act by denying crypto asset manager Grayscale’s application to convert its GBTC Bitcoin Trust into an ETF.
The lawmakers argued that there was no reason to deny spot crypto ETF applications following the court’s decision on the Grayscale vs. SEC case, where it ruled that the financial regulator’s decision was “arbitrary and capricious” after having already approved the listing of Bitcoin-focused investment vehicles tied to the futures market two years earlier.
The SEC defended its decision by arguing that spot Bitcoin ETF products are susceptible to market manipulation and have inadequate investor protections against it.
Spot Bitcoin ETFs “Indistinguishable” From Bitcoin Futures ETFs, Read The Letter
The letter further states that a spot Bitcoin exchange-traded product (ETP) is “indistinguishable” from a Bitcoin futures ETF, making the SEC’s current stand on the investment product “untenable moving forward”, according to the Representatives.
Due to this reason, the House Financial Services Committee members are demanding that the SEC approve all Bitcoin spot ETF applications filed with the agency by major traditional and crypto financial institutions.
The list of applicants includes BlackRock, Fidelity, Grayscale, Ark Invest, Invesco, Bitwise, VanEck, WisdomTree, Valkyrie Investments, and GlobalX.
Gary Gensler Set To Appear Before The Committee For A Oversight Hearing
The request came on the eve of Gary Gensler’s appearance before the Committee for an SEC oversight hearing that is scheduled for Wednesday, 27 September. The four members are also expected to address the matter mentioned in their letter.
The lawmakers noted that a regulated spot Bitcoin ETP would enhance investor protection by making access to the crypto asset “safer and more transparent”, also adding Congress has the duty to ensure that all investment products that meet its requirements are approved by the SEC.
A spot Bitcoin ETF would allow investors to gain exposure to the crypto market under a regulated environment. Since the ETPs are designed to be easy to trade in and out, investors can simply create a brokerage account and put their money into a fund holding Bitcoin and not worry about buying, storing, or selling the asset.
Representative Emmer, Flood, and Torres are also members of the Congressional Blockchain Caucus in the House, which is a bipartisan group that understands the potential of blockchain and believes the technology has a bigger role to play in the U.S. economy.
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SEC Delays Spot Bitcoin ETF Approvals Citing Federal Government Shutdown
Earlier today, the SEC extended its deadline to either approve or reject the spot Bitcoin ETF applications from Ark Invest and Global X. The Commission cited the looming threat of a U.S. government shutdown as the reason behind pushing its interim decision. Both applicants now have to wait until November 21 for a response from the regulator.
The U.S. government braces for a potential shutdown in the next seven days after Congress was unable to reach an agreement on the federal government’s spending prowess. This means that lawmakers will be unable to move forward with any legislation until they resolve the issues related to approving funding for the U.S. government going into the next fiscal year.
However, the House Financial Services Committee has confirmed its oversight hearing on the SEC will go ahead as planned.
At the time of writing, Bitcoin (BTC) is trading at $26,793 – up almost 2% from yesterday.
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