[WATCH] SEC Commissioner Hester Peirce’s Interview on Bitcoin ETF Approval

Hester Peirce, an SEC Commissioner, has received a great deal of attention lately for her comments concerning cryptocurrency and her dissent in the SEC’s denial of Winklevoss’s ETF.

Here is the full video of the entire hour long interview conducted by CNBC Africa's Crypto Trader show Ran NeuNer:

On August 1, 2018, Peirce participated in the interview by CNBC and had alot to say. Here is the clip of Hester Peirce's segment within the show:

Peirce’s Position at the SEC

According to Peirce, she is a “regulator of the SEC, which is the U.S. Securities and Exchange Commission.” Before her position as a commissioner, she was a staff attorney for the SEC. She is weighing in on cryptocurrency because “we have an important role to play in telling the United States and the World that our markets are open to innovation.”

This stance is what drove her to return to the SEC as a commissioner.

Whether the SEC Consulted Peirce Before Denying Winklevoss’s ETF

In response, Peirce explained the process for decisions that are issued at hearing. She stated, “what typically happens is that these decisions are made on the first instance by the staff, as opposed to the commissioners.” Essentially, it was first a staff-level decision that then got appealed. At the time of the staff-level decision, she was not a member of the agency.

Once at the appellate level, “we were confronted with the application actually being brought to us as a commission and that was when I was able to weight in.” There are normally five commissioners, however at the time of the decision, there were only four. In the Winklevoss case, the decision was made 3 to 1. A majority vote is necessary. Here, the majority stated that it was “replacing the staff analysis and decision with their own. But the staff had turned down the application.”

Why did the SEC Turn Down Winklevoss’s Application in Particular?

Peirce responded to this inquiry by stating, “if you read their order, which is relatively long, they go through an analysis and say that the rule change, which is how this is done – an exchange comes in and they say ‘we have a rule change that would like to put into place which would allow us to trade this product.’”

The majority of the commission said that “the proposed change was actually not consistent with the governing statue, in this case that would be the Securities and Exchange Act.” Peirce takes the position that “actually, that the change that was before us was consistent with the exchange act.

There was no reason for us to not allow this product to go ahead and to trade on the exchange.”In denying the application, the other commissioners cited several reasons for their decision and “specifically, in this case” they “looked through the underlying asset, in this case that would be bitcoin, and they raised some concerns about the market for that underlying product. I think by doing that, they went beyond what the statute allows us to do.” Peirce added that even if she were to focus on bitcoin and its underlying market, she would have come to a different conclusion.

Does the Commission take the dissent “to heart” and is it normal?

When asked whether the commission takes the dissent “to heart,” and whether a dissent is normal, Peirce stated “absolutely.” A five-member commission provides different perspectives and experiences to the table. It is not unusual for one or more to dissent, but it is unusual in this type of decision. “However, given that, again, we are a five-member commission, it is not unusual for people to come to different conclusions.” Peirce also hopes that her dissent will be taken to consideration and that it will help her colleagues when addressing the next like-situation.

What to Make of Valiant’s Just-Filed Exchange Traded-Fund?

When asked about Valient’s just-filed ETF and whether she will be on the commission, Peirce stated that the commission does not change, and such applications are first handled at the staff level. Later, it might come to the commission levels. She rightly declined to speak about any particular product that is “under review.” But, “again, as a general principle, I think that we should be looking for ways to increase opportunities for investors . . . I am hoping in the future we will be more willing to increase the potential opportunities for investors to participate in these markets in a way that is consistent with their preferences and consistent with a way that would be effective and efficient for them.”

Finally, Peirce stated that she does not take a particular stance on a specific cryptocurrency because she needs to remain objective.

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