US Sen Toomey on Bitcoin ETF Rejection: SEC Denying Access to Financial Services

Key Takeaways

  • Pat Toomey described SEC’s decision to reject Grayscale’s Spot Bitcoin ETF application as “blanket rejection.”
  • Supporters of a spot bitcoin ETF approval believe it would offer a easily accessible and economical way for institutions and individuals to invest in BTC. 

On Wednesday, the U.S. Securities and Exchange Commission said in a filing that it rejected a proposal to list a spot bitcoin exchange-traded fund(ETF) by Grayscale, one of the world’s leading digital asset managers, on Intercontinental Exchange Inc’s NYSE Arca exchange. SEC’s indifference towards spot Bitcoin ETFs became much more reinstated with this move.

Grayscale has responded with a legal challenge to SEC’s decision, the latest in a series of rejections of proposals for U.S. listings of spot bitcoin ETFs over the past one year. The latest developments have also sparked interesting discussions on social media regarding SEC’s approach to tackling investor risks.

Pat Toomey, US Senator for Pennsylvania, took to Twitter to express his displeasure at SEC’s decision to reject Grayscale’s application.” Their blanket rejection of numerous Bitcoin spot ETFs—despite the SEC’s prior approvals of Bitcoin futures ETFs—demonstrates how this SEC has arbitrarily chosen to deny investors access to financial products,” his tweet reads.

He further added that he is pleased that the SEC’s decision will now be subject to court review. Supporters of a spot bitcoin ETF approval believe it would offer a easily accessible and economical way for institutions and individuals to invest in BTC. Some others, however, believe SEC’s rejection of Bitcoin spot ETF was needed considering the current market volatility otherwise, the effects of this crypto crash would be even worse.

“Thank goodness the SEC has rejected every Bitcoin spot ETF because otherwise the effects of this crypto crash would be even worse”, crypto-journalist Jacob Silverman’s tweet reads. Currently, Bitcoin is trading at $19,252 USD. SEC argues that the lack of a surveillance-sharing agreement between a regulated market of significant size and a regulated exchange made them reject spot Bitcoin ETF’s.

By rejecting over a dozen proposals for spot bitcoin ETFs over the past year, the SEC claims to have focused on a lack of surveillance-sharing agreements with a regulated market of significant size relating to the underlying assets. The regulatory body had recently approved numerous future-based bitcoin ETFs, including that of Valkyrie’s, while it’s yet to give the green light to even one spot bitcoin ETF. In 2022, SEC had denied Spot Bitcoin ETF applications by NYDIG and GlobalX, investment firm Kryptoin’s, VanEck, and WisdomTree, among others.

Saniya Raahath
Saniya Raahath

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