SEC under congressional scrutiny as BlackRock’s spot Bitcoin ETF application moves forward SEC under congressional scrutiny as BlackRock’s spot Bitcoin ETF application moves forward
House Financial Services Committee Chair Patrick McHenry says he will "closely" watch the SEC's response to the asset manager's application
2 min read
Updated: Jul. 9, 2023 at 1:11 am UTC
U.S. House Office of Photography. Remixed by CryptoSlate
U.S. House Financial Services Committee Chair Patrick McHenry said he would “closely” watch how the Securities and Exchange Commission (SEC) responds to BlackRock’s application for a spot Bitcoin ETF in a June 16 tweet.
McHenry noted that while the decision now rests with SEC Chair Gary Gensler, the financial regulator “must not pick winners and losers based on inconsistent factors.”
The lawmaker’s comment suggests that the SEC would have to explain why it rejected all the previous spot Bitcoin ETF applications from other crypto firms if it approves that of BlackRock.
Considering BlackRock’s status as one of the biggest investment firms in the world and its influence, several crypto community members believe the SEC will be under significant pressure to approve its application.
BlackRock’s ETF application
On June 15, BlackRock applied for a Bitcoin spot ETF. Coinbase Custody would act as the custodian for the digital assets, while the Bank of New York Mellon would hold the ETF’s fiat.
According to its application, the SEC has previously approved unregulated spot exchange-traded products in the commodities and currency markets by relying on the underlying futures market. Thus, “the regulated market of significant size test does not require that the spot bitcoin market be regulated in order for the Commission to approve this proposal.”
SEC has a history of rejecting Bitcoin spot ETFs
The Commission has rejected over 10 spot Bitcoin ETF applications from different firms, including Ark Invest, 21 Shares, WisdomTree, Fidelity, SkyBridge, Valkyrie Investments, and VanEck.
Additionally, the regulator has frustrated Grayscale Investments’ effort to convert its Bitcoin Trust into a spot ETF. The crypto investment firm is currently challenging the SEC’s decision in court.
In these cases, the Commission has consistently maintained that these firms’ applications failed to comply with certain sections of the Securities Exchange Act and were not designed to prevent fraud and market manipulation or protect investors and public interests.
However, the SEC has approved various Bitcoin futures ETFs since October 2021, including ProShares Bitcoin Strategy (BITO) and Valkyrie Bitcoin Strategy ETF (BTF).
Mentioned in this article
Bitcoin 
Grayscale Investments 
BlackRock 
Valkyrie 
Fidelity Investments 
SkyBridge Capital Management 
Gary Gensler Author 
Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Grayscale Investments
Established in 2013 by Digital Currency Group, Grayscale Investments is a trusted authority on digital currency investing and cryptocurrency asset management.
BlackRock
BlackRock, synonymous with global asset management, is an American multinational investment management corporation based in New York City.
Valkyrie
Valkyrie Investments is a specialized alternative asset management firm at the intersection of traditional finance and the emerging digital asset sector which is headquartered in Nashville.
Fidelity Investments
Fidelity Investments Inc., commonly referred to as Fidelity, is a multinational financial services corporation based in Boston, Massachusetts.
SkyBridge Capital Management
SkyBridge offers a wide variety of digital asset offerings that include investments in equities and tokens and are available on both public and private markets.
Gary Gensler is an American government official and former investment banker who President Joseph Biden nominated to chair the U.S.