The Chamber of Digital Commerce goes to bat for a spot bitcoin ETF in The US. Plus, it goes for Chairman Gensler’s throat. The organization doesn’t mince words in the report titled “The Crypto Conundrum. Why Won’t the SEC Approve a Bitcoin ETF?” The Chamber of Digital Commerce argues that all of the standards that the SEC demanded have been met, yet a Bitcoin ETF is as far away from approval as when the Winklevoss twins first asked for it in 2013.
“Since that time, the SEC has rejected each and every application seeking to list a Bitcoin ETF on a national securities exchange, citing a range of concerns that this Report will demonstrate have been fully addressed by asset managers seeking to offer responsible, transparent and regulated bitcoin exposure to retail and institutional investors.”
Before we explore their arguments, you should know that the Chamber of Digital Commerce defines itself as a “trade association representing the blockchain technology ecosystem. Our mission is to promote the acceptance and use of digital assets and blockchain technologies.” So, despite the official-looking name, it’s not a governmental institution.
What Does The Chamber Of Digital Commerce Argue?
What games is the SEC playing? Why doesn’t the United States have a spot Bitcoin ETF yet? “To date, at least 16 different companies have applied to the SEC for the right to offer a Bitcoin ETF to U.S. investors. All such requests have been denied – some multiple times,” the Chamber of Digital Commerce explains. According to the organization, the companies requesting the ETF have done everything in their power to comply with the SEC and the answer remains negative.
“Rather than playing a leading role in responsible adoption of new technologies and products, the United States is falling behind the rest of the world, as more countries approve such products. The United States is increasingly seen as being an undesirable place for innovators in the digital asset space to conduct operations due to the current regulatory environment.”
The Chamber of Digital Commerce warns that capital that would’ve been invested in the US was “deployed in other, more innovation-friendly countries.” Other advanced economies like “Canada, Germany, Sweden, Switzerland, and most recently, Australia,” have already approved Bitcoin ETFs. And “to date there have been no reported instances of hacking or theft and no indications of market manipulation relating to these internationally listed Bitcoin ETFs,” the Chamber of Digital Commerce points out.
BTC price chart for 09/13/2022 on Bitstamp | Source: BTC/USD on TradingView.com
The Standard Has Been Met
The Chamber of Digital Commerce soon takes its gloves off and goes for Chairman Gensler’s throat, “After nearly ten years of working with the SEC on the pursuit of a Bitcoin ETF, few market participants believe the true reason the SEC continues to issue denials on Bitcoin ETF applications has much connection to the legal standards the SEC cites in its denials.” As the Chamber of Digital Commerce sees it, the standard has been met.
The organization offers a theory:
“There is broad consensus that Chairman Gensler is now seeking oversight of the cryptocurrency exchanges through the SEC’s own rulemaking mechanism. In a February 2022 interview, SEC Commissioner Peirce echoed the widespread belief about Chairman Gensler’s intentions: “I think [Chairman Gensler] is trying to pull those crypto platforms into our orbit,” she said.”
The Chamber of Digital Commerce also offers a surprisingly bold solution:
“Litigating against the SEC, once considered an unthinkable approach, is now one of the most viable options for eventually getting a Bitcoin ETF to market. However, litigation is inherently uncertain and litigating against the government is notoriously time consuming and expensive.”
The Chamber of Digital Commerce Vs. Chairman Gensler
In case anyone missed their accusation the first time, the Chamber of Digital Commerce explains its theory one more time. With even more detail:
“It is becoming clear that Chairman Gensler does not intend to approve a Bitcoin ETF until the SEC’s authority to regulate is expanded to cover the cryptocurrency exchanges, whether that be through legislation, unilateral SEC rulemaking or SEC enforcement actions, creating a belief among market participants that the true pretext for the application denials is not based on any unmet legal standard but rather as a means of effectuating a jurisdictional land grab.”
The organization finishes its study with fighting words:
“Unfortunately, it is becoming increasingly probable that it will take litigation or focused efforts by Congress to break through the SEC’s increasingly arbitrary and unwarranted treatment of this important investment product.”
So yeah, the Chamber of Digital Commerce doesn’t play around. Even if its study also reads as a desperate plea for validation. The organization still went for the Chairman’s throat, and that counts.
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