SEC Commissioner Mark Uyeda has expressed "strong concerns" regarding three aspects of the approval order for spot Bitcoin exchange-traded funds (ETFs) by the United States Securities and Exchange Commission (SEC). While Uyeda voted in favor of the Bitcoin ETF approvals, he criticized the underlying analytical approach and legal analysis used by the commission, stating that the flawed reasoning in the approval order could have long-term repercussions.


Uyeda argued that the SEC missed an opportunity to treat Bitcoin like any other commodity and expressed dissatisfaction with the commission's novel "significant size" test, which spot Bitcoin ETFs failed to satisfy. He contended that spot Bitcoin ETFs should have been approved long ago based on this standard. The commissioner criticized the lack of additional explanation for treating spot Bitcoin ETFs differently than Bitcoin futures ETFs under the "significant market" test.

The SEC's approval, according to Uyeda, introduced a new standard after years of applicants pursuing the "significant market" requirement. He suggested that the commission should have actively communicated its expectations instead of requiring multiple attempts by applicants. Uyeda also raised concerns about the SEC's motivation for accelerating spot Bitcoin ETF approvals, suggesting a lack of analysis on how the cash-only creation and redemption feature could prevent fraud.

Despite his objections to the legal analysis, Uyeda supported the issuance of the approval order due to independent reasons for concluding that the applications satisfy the standards for approval outlined in the Exchange Act.

Key Points:

  • "Strong Concerns": SEC Commissioner Mark Uyeda raised "strong concerns" about three aspects of the approval order for spot Bitcoin ETFs, emphasizing the potential long-term repercussions of the flawed reasoning.

  • Missed Opportunity: Uyeda criticized the SEC for missing an opportunity to treat Bitcoin as any other commodity and expressed dissatisfaction with the "significant size" test, which spot Bitcoin ETFs failed to satisfy.

  • Different Treatment: The commissioner questioned the lack of additional explanation for treating spot Bitcoin ETFs differently than Bitcoin futures ETFs under the "significant market" test.

  • New Standard: Uyeda argued that the SEC introduced a new standard after forcing applicants to pursue the "significant market" requirement for years.

  • Communication of Expectations: The commissioner suggested that the SEC should have actively communicated its expectations to applicants rather than requiring multiple attempts to satisfy standards.

  • Motivation for Acceleration: Uyeda raised concerns about the SEC's motivation for accelerating spot Bitcoin ETF approvals and noted a lack of analysis on the fraud prevention capabilities of the cash-only creation and redemption feature.

  • Support for Approval: Despite objections, Uyeda supported the issuance of the approval order based on independent reasons for concluding that the applications meet the standards outlined in the Exchange Act.

Conclusion: SEC Commissioner Mark Uyeda's "strong concerns" about the spot Bitcoin ETF approval order highlight issues with the analytical approach and legal analysis used by the commission. While supporting the approval due to independent reasons, Uyeda emphasizes the need for transparency, clear communication of expectations, and a consistent approach to treating Bitcoin as a commodity. The commissioner's statements indicate a desire for a more robust framework for evaluating and approving cryptocurrency-related financial products.


(ARIJIT SARKAR, COINTELEGRAPH, 2023)