Former SEC Official Can a Spot Bitcoin ETF Be Approved? What Benefits Will Cryptocurrencies Have If the Republican Party Wins in 2024

Former SEC Official on Bitcoin ETF Approval and Cryptocurrency Benefits with Republican Party Victory in 2024

Author | Former SEC official John Reed Stark

Translation | Wu Shuo Blockchain

Will the SEC approve the recent Bitcoin spot ETF application?

I believe that for a series of convincing reasons, the current SEC will not approve the application for a Bitcoin spot ETF. Independent and objective experts from @BetterMarkets made an excellent presentation in an SEC opinion letter dated August 8, 2023 regarding multiple proposed rule changes submitted by the SEC (these proposals are about the listing and trading of exchange-traded products based on spot Bitcoin). Their presentation is much better than what I can say (see specific links and excerpts below).

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However, I also believe that the trend of cryptocurrency regulation may undergo significant changes after Election Day.

Cryptocurrency and Partisanship

Unfortunately, SEC regulation of cryptocurrencies has become increasingly partisan. This is surprising because when I first started writing about cryptocurrencies in 2017, cryptocurrencies were not a partisan issue at all.

For example, at that time, President Donald Trump, Secretary of State Hillary Clinton, and Congresswoman Maxine Waters all held the same view on cryptocurrencies, that cryptocurrencies were a dangerous and terrible plague.

See:

A Roadmap for President Trump’s Crypto-Crackdown

In addition, the SEC’s crackdown on cryptocurrencies began with SEC Chairman Jay Clayton, who was appointed by the Republican Party. Chairman Clayton has always been a sharp and consistent critic of cryptocurrencies, with years of speeches and congressional testimony against cryptocurrencies, and has also led a series of groundbreaking enforcement actions and proactive/comprehensive SEC regulatory statements related to cryptocurrencies.

https://linkedin.com/pulse/sec-triples-down-its-cryptocurrency-offensive-john-reed-stark/

If a Republican is elected as the President of the United States in 2024

Considering the partisan divisions that have formed within the SEC, particularly regarding cryptocurrencies, I believe that if a Republican is elected as the President of the United States in 2024, Republicans appointed to the SEC may:

1) Significantly reduce the enforcement efforts of the SEC on cryptocurrencies, potentially focusing mainly on fraud cases and shifting efforts to bring charges from purely registration violations (such as cryptocurrency trading platforms not registered as exchanges, broker-dealers, and clearing agencies);

2) Become more accepting of approving Bitcoin spot ETFs and are more likely to take other significant pro-cryptocurrency regulatory actions.

Hester Pierce as SEC Chairman

Background: The SEC is an independent federal agency established under the Securities Exchange Act of 1934, led by a committee of five commissioners. The commissioners are appointed by the President and confirmed by the Senate. The President designates one of the commissioners as Chairman.

In order to ensure the non-partisan nature of the committee, no more than three members can belong to the same political party. The president also designates one of the members as the chairman, who is the highest executive officer of the SEC.

When any president is elected, the current chairman of the SEC usually resigns, and the new SEC chairman position usually takes at least 3-4 months to be confirmed and appointed after the inauguration day.

Therefore, if a Republican is elected president, Chairman Gensler is likely to resign, and the appointed senior Republican SEC commissioner (in this case, the famous “Crypto Mom” @HesterPeirce) may become the acting chairman.

In addition, considering the equal number of Republicans and Democrats on the current committee, any vote by the committee, especially those related to cryptocurrency proposals from staff, could easily split 2-2, as the committee has at least one vacancy.

If @HesterPeirce becomes the acting chairman of the SEC, given her long-standing record of opposing most SEC actions related to cryptocurrencies, the world should expect most of the US SEC’s cryptocurrency-related enforcement to suddenly stop.

https://linkedin.com/posts/john-reed-stark-3806866_secs-hester-peirce-says-the-us-has-dropped-activity-6936713517370683392-IhVu/?utm_source=linkedin_share&utm_medium=member_desktop_web

These are my views for reference.

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