SEC's "Five Elders" - Can they open the era of ETF navigation?
Author: Azuma
As the "final judgment day" for Bitcoin spot ETF on January 10 approaches, the speculation about "approval" or "rejection" is becoming increasingly heated.
Yesterday evening, apart from Hashdex, the major ETF applicants have successively submitted updated S-1 (S-3) documents. Next, the SEC will vote on these documents and the earlier submitted 19 b-4 documents to decide whether to approve the application for a Bitcoin spot ETF.
According to FOX reporter Eleanor Terrett, the five current commissioners of the SEC (the full name is the "U.S. Securities and Exchange Commission") who can participate in the "life and death" resolution of the ETF are Chairman Gary Gensler, as well as commissioners Hester Peirce, Caroline Crenshaw, Mark Uyeda, and Jaime Lizárraga.
What are the attitudes of these five individuals towards Crypto and Bitcoin spot ETF? What choices will they make in this crucial vote? Combining their past statements, we try to find some clues.
Voter One: Chairman Gary Gensler
As the most influential figure in this vote, Gary Gensler, who is often referred to as the "public enemy" and "human black swan," may be the most disliked regulator in the Crypto industry as the SEC chairman.
Gensler was once considered an ally of the industry due to his early academic research on Crypto. However, with his leadership in numerous lawsuits against companies and projects in recent years, Gensler's attitude towards Crypto has made a 180-degree turn.
Yesterday evening, Gensler once again issued a risk warning about Crypto, emphasizing that individuals providing investment/services in crypto assets may violate applicable laws, including federal securities laws. Investors participating in crypto asset securities should be aware that they may lose key information related to their investments and other important protections. In addition, investing in crypto assets may involve extremely high risks and significant volatility. Many major platforms and crypto assets have experienced bankruptcy and/or devaluation. Continuing to invest in crypto assets requires an awareness of significant risks.
In conclusion, considering his past statements and actions, Gensler is more likely to vote against. However, some believe that since the SEC has been willing to spend a great deal of effort in recent months to communicate with ETF applicants, Gensler, in his position as chairman, may make an unexpected decision.
Voter Two: Commissioner Hester Peirce
In contrast to Gensler, Commissioner Hester Peirce has always been the most Crypto-friendly regulator, and she has been given a friendly nickname - "Crypto Mom."
Peirce has been outspokenly against using litigation as a substitute for regulation, believing that the SEC should actively consider establishing a Crypto regulatory framework.
As for her attitude towards ETFs, Peirce may be more aggressive than you think. She has stated that a Bitcoin spot ETF should have been approved five years ago and even said, "The logic behind why the SEC has not approved a Bitcoin spot ETF has always puzzled me."
You can boldly expect Peirce to vote yes.
Voter Three: Caroline Crenshaw
Compared to Gensler and Peirce, Caroline Crenshaw's work does not seem to be as focused on the Crypto industry. However, from her few public statements, it seems that Crenshaw also holds a somewhat negative attitude towards Crypto.
In November 2021, Crenshaw emphasized the regulatory issues of DeFi, stating that while DeFi can bring certain benefits, it can also pose dangers if protective regulatory frameworks are not adopted.
In January 2023, Crenshaw attended a Twitter Space event hosted by the U.S. Army with Gensler, where she stated that Crypto is "known for scams" and those considering investing should "carefully consider" their percentage of investment in digital assets.
It is conservatively speculated that Crenshaw is more likely to vote against.
Voter Four: Mark Uyeda
Like Peirce, Mark Uyeda also holds a friendly attitude towards Crypto, and the two have jointly opposed enforcement actions initiated by the SEC against industry projects.
In March 2023, after the SEC rejected VanEck's Bitcoin spot ETF, Uyeda and Peirce jointly issued a statement of opposition, stating that the SEC's review of ETP applicants exhibited "double standards," resulting in the prolonged non-approval of a Bitcoin spot ETF.
It is inferred that Uyeda is highly likely to vote in support.
Voter Five: Jaime Lizárraga
Among the five commissioners, Jaime Lizárraga seems to be the farthest from the Crypto industry. Cointelegraph mentioned in a 2022 news article about Lizárraga's appointment that "Lizárraga has basically never made any public statements about Crypto and blockchain."
Since Lizárraga took office, we have not found any clear statements from him regarding Crypto.
Lizárraga's voting inclination is currently unpredictable.
Conclusion
In summary, the current five commissioners of the SEC have significantly different attitudes towards Crypto. Considering that Peirce and Uyeda hold clear supportive attitudes, the approval of the ETF is quite worth anticipating.
However, it should be emphasized that the above content is only a glimpse of the attitudes based on the historical statements of the five SEC commissioners and cannot fully represent their comprehensive judgments. It also cannot cover potential attitude changes of the commissioners over time.
Holding the power to determine the fate of the ETF? What are the attitudes of the five SEC commissioners towards Crypto? Let's end with the speculation of Bloomberg ETF analyst Eric Balchunas. Balchunas believes that since Gensler has been willing to spend a great deal of effort, even sacrificing holidays to cooperate with the applicants in modifying the documents, he may also vote in support. Coupled with the relatively certain two votes (Peirce and Uyeda), the ETF is likely to pass with a majority of 3 votes.
What will the final result be? Let's patiently await the answer in the last two days and embrace the fate.
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