SEC staff rejected a number of proposed Bitcoin ETFs on Wednesday, citing concerns about potential market manipulation and fraud. One day later, SEC Commissioner Hestor Peirce announced via Twitter that the rejection decision has been stayed pending a full Commission review by the regulatory agency’s four commissioners.
“Yesterday's staff orders disapproving SRO rules related to a number of bitcoin ETFs are stayed pending Commission review.
“In English: the Commission (Chairman and Commissioners) delegates some tasks to its staff. When the staff acts in such cases, it acts on behalf of the Commission. The Commission may review the staff's action, as will now happen here.”
While many cryptocurrency enthusiasts applauded the decision to review the rejection, experts remained skeptical. Several noted that Rule 431 of the agency’s Rules of Practice permit this type of review based on the request of just one Commissioner. A majority vote is required to overrule the reviewed decision.
It is also worth noting that Commissioner Peirce was the sole dissenter in a previous 3-1 rejection of a Bitcoin ETF application. Her dissent was cheered at the time, as she expressed her belief that regulators have a duty to avoid intervention that could potentially stifle innovation. Since that decision, however, here has been no public indication that her fellow commissioners have softened their positions.