Bloomberg analyst calls for FOIA request into SEC’s Ethereum ETF decision

Bloomberg ETF analyst James Seyffart called for freedom of information access (FOIA) requests regarding the SEC's approval of spot Ethereum ETFs.

In a June 5 KITCO interview, Seyffart said that public requests should search for “emails, calls, [and] anyone that had conversations with [SEC chair] Gary Gensler” to determine what happened during the SEC's decision-making process.

He said unused denial orders could exist due to the agency's rapid change in stance.

Voting is unclear

Seyffart said the SEC approved the spot Ethereum ETFs through delegated authority, a common approach but a rare choice for the issue at hand.

Delegated authority also means voting records are unclear.

Seyffart said that the choice points to a politically motivated decision, stating:

“Until I have somebody come out and show me smoking gun evidence … this was political.”

Seyffart said the “leading theory” is that a Biden administration member called SEC chair Gary Gensler and influenced the agency's decision.

A secondary theory posits that someone swung the vote of a Democratic SEC commissioner who previously voted against spot Bitcoin ETFs. The reversed vote could have led the SEC to vote at least 3-2 in favor of spot Ethereum ETFs even if Gensler voted against the funds.

It is still possible for a commissioner to challenge the decision and force a vote. However, Seyffart said Democratic commissioners are unlikely to gain anything from making the voting record transparent.

He previously said a challenge is unlikely to influence the actual voting results.

SEC should be less political

Seyffart also discussed the broader impact of politics on the SEC. He argued the SEC should not be wholly apolitical but less political than it currently is.

Seyffart believes that, until recently, the SEC has decided to deny spot crypto ETFs and proceeded to find legal justification for its stance after the fact.

Instead, the chair should choose the issues the agency focuses on and seek legal input from individual commissioners, leading to a decision “based on logic and reason,” Seyffart said.