🗣 SEC Commissioner Hester M. Peirce publicly dissents from the SEC's denial of the Winklevoss' ETF

Last week, the SEC rejected a proposed rule to list and trade shares of the Winklevoss Bitcoin Trust on Bats BZX Exchange, Inc. (“BZX”). In a strongly-worded public dissent, SEC Commissioner Hester M. Peirce argues three main points:

1. The Commission made the rejection decision solely based on the underlying bitcoin spot market, but not on evaluating the actual shares (i.e. Winklevoss Bitcoin Trust) to be listed on the exchange, essentially improperly refusing to approve the ETF only because the Commission thinks Bitcoin itself is a risky investment;
2. The SEC's rejection of the ETF listing undermines investor protection by precluding greater institutionalization of the bitcoin market. Peirce argues that more institutional investors in the bitcoin market would help bolster exchange defenses, encourage more investment in custody solutions, and make market manipulating activity easier to spot;
3. Lastly, the rejection dampens innovation and sets up securities regulators for the ill-fitting role of gatekeepers of innovation.