SEC Crypto Task Force Head Critiques ETF Approval Process, Emphasizes Importance of Patience

The leader of the US Securities and Exchange Commission’s (SEC) Crypto Task Force, Hester Peirce, expressed that the lengthy process leading to the approval of spot Bitcoin exchange-traded funds (ETFs) was poorly managed. She encouraged individuals in the cryptocurrency market to remain patient amidst the ongoing regulatory hold-ups.

In a discussion on Bloomberg’s Trillions podcast, Peirce addressed the sluggish pace of approvals for financial products related to cryptocurrency, emphasizing that the SEC is currently dealing with legal disputes and internal discussions pertaining to digital assets.

She emphasized the importance of patience, remarking, “Individuals must exercise patience. We are navigating through ongoing legal challenges, along with various other factors.”

Peirce, known for her strong support of the crypto sector and often referred to as “Crypto Mom,” has criticized the SEC’s process for reviewing spot Bitcoin ETFs leading up to their January 2024 approval.

At that time, she publicly denounced the process as “terribly mismanaged,” questioning the SEC’s rationale for reversing its previous rejections, which she found unconvincing. She noted that the delays had “alienated a generation of innovators within our field.”

As of April 21, the SEC had 72 ETF applications awaiting approval, encompassing various derivatives. Following a recent series of decision delays, Bloomberg ETF analysts anticipate that the regulator will continue to take its time, with the final deadlines set for October.

Amid ongoing regulatory discussions, Peirce reiterated that both institutional and retail investors must wait for additional clarity. She highlighted that there is “a lot happening” and that the SEC’s responsibilities involve litigation and complex policy issues related to new financial instruments.

The SEC has been actively meeting with industry stakeholders and hosting roundtables to explore different facets of the cryptocurrency landscape.

Peirce clarified in her interview that SEC approval of a product does not imply an endorsement regarding its investment potential.

She stated, “When something is approved or goes live at the SEC, it does not indicate that we are advising individuals that this is a sound investment for them or anyone else. People must arrive at that conclusion on their own.”