The lawmakers including Reps. Mike Flood, R-Neb., Tom Emmer, R-Minn., Ritchie Torres, D-N.Y. and Wiley Nickel, D-N.C., in a letter on Tuesday argued that a bitcoin spot ETF will make bitcoin investing easier and safer.
“Congress has a duty to ensure the SEC approves investment products that meet the requirements set out by Congress,” they said. “To that end, we urge you to approve the listing of spot-bitcoin ETPs immediately.”
This is coming on the heels of a recent ruling on the Grayscale ETF application. A three-judge panel of the District of Columbia Court of Appeals in Washington early this month ruled that the SEC was wrong to turn down the company’s request without any explanations.
Grayscale had applied to the SEC requesting to convert its large cap crypto asset management platform into a Bitcoin spot ETF. The judges found no reason why the SEC should turn down the request when it approved a Bitcoin futures ETF under similar circumstances.
“The Court’s finding underscores the fundamental point,” the lawmakers said. “A spot bitcoin ETP is indistinguishable from a bitcoin futures ETP. Thus, the SEC’s current posture is untenable moving forward.”
There are already several applications submitted to the SEC this year alone for a Bitcoin spot ETF. The most notable of these are those of BlackRock, Ark Invest, and others. The SEC had last month postponed its decision on all the pending applications, saying it needed more time to decide.
SEC Soft on Chinese Crypto Companies
While the SEC seems so strict about approving Bitcoin spot ETF applications by American companies, lawmakers have expressed concern that the agency isn’t using a similar approach towards Chinese crypto companies.
Rep. Blaine Luetkemeyer, R-Mo., sent a letter to Gensler and Financial Industry Regulatory Authority President Robert Cook on Tuesday, expressing concern that both agencies allow registered broker-dealers with ownership ties to the Chinese Community Party to operate in the U.S.
Luetkemeyer argued that the SEC wasn’t doing enough to address concerns regarding non-China based U.S. firms with ties to the CCP, mentioning examples such as Prometheum Inc, Webull Financial, LLC and Moomoo, Inc.
“The SEC’s limited effort in this regard is particularly troubling given the important role registered broker-dealers play in our financial markets, including the fact that many of these firms provide (or intend to provide) products and services directly to retail investors, which requires the collection of substantial amounts of customers’ personal information,” the lawmaker said.
Luetkemeyer, who sits on the House Financial Services Committee, questioned Gensler about the SEC’s data security concerns on ties to the CCP, among others.
SEC Postpones Decision on Bitcoin ETF
Despite the call by lawmakers for the SEC to approve a Bitcoin spot ETF urgently, the agency has announced that it will postpone decisions on another ETF till next year 2024. The agency is suspending its decision on the ARK 21Shares Bitcoin ETF to Jan 10 deadline.
Meanwhile, the SEC’s decision on the other applications is still expected after the first postponement. The crypto community is more hopeful now than ever that a Bitcoin ETF coils become a reality and with the support of lawmakers, there is light at the end of the tunnel.