SEC Commissioner Hester Peirce says Bitcoin ETF approval process was terribly mismanaged

Hester Peirce, a U.S. SEC Commissioner, said the approval process for spot Bitcoin ETFs was “terribly mismanaged” at the time of the approval. She urged those waiting for another round of approvals on crypto-related ETPs or broader regulatory clarity to realize a lot was going on.

Commissioner Peirce said the decade-long approval process for spot Bitcoin ETFs was “terribly mismanaged” at the time of the approval in January 2024. She issued a statement criticizing the regulator’s “flimsy explanation for its change of heart,” saying that the U.S. SEC had “alienated a generation of product innovators within the space.” 

After a decade of regulatory back-and-forth with issuers, the SEC approved the first 10 spot Bitcoin ETFs on January 10th. The funds accumulated about $60 billion in assets in 24 hours, with BlackRock’s iShares Bitcoin Trust (IBIT) generating $10 billion in AUM—faster than any ETF in history. IBIT currently stands at $59.73 billion in AUM as of May 7, 2025. However, Peirce emphasized that the U.S. SEC’s approval of a product did not imply it was a good investment, and “individuals must make that decision for themselves.”

Peirce expresses disappointment in the “mismanagement” of ETF approvals

SEC’s Hester Peirce says be patient on crypto ETF filings…

“Ongoing litigation we have that we’re trying to work through” & “lots of other considerations we’re thinking about”.

Also says spot btc ETF approval process “terribly mismanaged”.

via @EricBalchunas @joelwebershow pic.twitter.com/lAs5P3lpiY

— Nate Geraci (@NateGeraci) May 8, 2025

Peirce said the establishment of spot Bitcoin ETFs proved investors wanted the funds but added there was a “real problem” about how the agency “mismanaged” the initial approval process. She, however, urged patience from those waiting for approvals on crypto-related exchange-traded funds (ETFs) or broader regulatory clarity, citing ongoing litigation and other considerations that the U.S. SEC was working through, and advised people to be patient with filings.

Peirce also stressed that the agency’s “arbitrary and capricious” treatment of applications in this area will continue to harm the Commission’s reputation far beyond crypto, adding that diminished trust from the public would inhibit its ability to regulate the markets effectively. In the days and months leading up to the SEC approvals, crypto investors and analysts closely tracked the communications between the agency and issuers—an unusual scenario for ETF approvals.

“We built up so much attention around it, and then you had the [tech glitch] problems around the launch … When we built up that attention, it was just not a healthy way for us to be improving things.”

~ Hester Peirce, Commissioner at the U.S. SEC

Peirce pointed out that the Commission had squandered a decade of opportunities to do its job, saying the products could have been approved years ago if the agency had applied the standard it used for other commodity-based ETPs–instead of waiting until a court called its bluff. She added that the U.S. SEC’s approval came only begrudgingly even now, as demonstrated by its continued insistence that these products satisfy a correlation test it did not demand of prior commodity-based ETPs.

Peirce says the U.S. SEC’s denial of ETF approvals is legendary 

According to Hester Peirce, it was time for the Commission to stop denying spot crypto exchange-traded funds/products, claiming that the Commission’s continued resistance to spot crypto ETFs was becoming almost legendary. She added that the reluctance of the U.S. SEC to either approve such an offering or provide greater clarity on how issuers can do so baffles many in the industry. 

Peirce also claimed that the continued refusal by the U.S. SEC approval of spot crypto ETFs was puzzling to many agency observers. She added that the Bitcoin market had grown, matured, became more liquid, and attracted more sophisticated participants. Peirce, however, reiterated that while she continued to challenge the U.S. SEC’s position on spot crypto ETFs, she remained optimistic that the regulatory agency will change its course.

The Commissioner further revealed that watching the U.S. SEC’s refusal to engage productively with crypto ETF users and developers over the years prompted feelings of disbelief at the agency’s puzzling and out-of-character approach to regulation. 

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