SEC delays multiple spot Bitcoin ETF decisions
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(Kitco News) - In a move that was expected following last week's decision to delay a ruling on the ARK 21Shares spot Bitcoin (BTC) exchange-traded fund (ETF), the Securities and Exchange Commission (SEC) has pushed its decision on multiple applications from other financial institutions, including BlackRock.
As noted by Bloomberg Intelligence ETF analyst James Seyffart, Thursday filings by the SEC showed that the regulator has delayed its decision on the applications by BlackRock, Valkyrie, Bitwise, Invesco, and Galaxy Digital.
Seyffart went on to predict that the applications from WisdomTree, VanEck, and Fidelity would likely be postponed on Friday ahead of the looming U.S. government shutdown.
“Okay. Guessing the SEC is done for the night. We're expecting the other 3 Bitcoin ETF delay orders tomorrow before the government shutdown,” he tweeted. “Firms remaining are WisdomTree, VanEck, and Fidelity.”
Crypto-related ETF applications. Source: Twitter
An update from Seyffart on Friday morning confirmed that WisdomTree’s application had indeed been delayed. “We have WisdomTreeFunds' delay order on their spot Bitcoin ETF. Still waiting on VanEck & Fidelity. But they should be coming today,” he tweeted.
While many have highlighted the government shutdown as a potential reason for the delay, the fact that the SEC delayed its decision on the ARK 21Shares ETF well ahead of the November 11 deadline, extending its final ruling until January 10, 2024, suggests that the regulator intended to delay regardless of the developments with the U.S. government.
Along with the delay, the SEC has opened the applications for public comment to get feedback on the potential benefits and dangers of launching spot crypto ETFs.
“The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal,” the SEC said. “In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Section 6(b)(5) or any other provision of the Securities Exchange Act of 1934, and the rules and regulations thereunder.”
Concerns and considerations noted by the SEC in its decision to delay include legal and policy issues that the proposal has brought up, which require more in-depth analysis; ensuring that national securities exchange rules are designed robustly to prevent fraudulent and manipulative acts; issues related to the liquidity, transparency, and susceptibility of the Bitcoin markets to manipulation; and the effectiveness of the surveillance-sharing agreement with Coinbase in deterring malicious activities.
As it stands now, it's looking increasingly likely that a spot BTC ETF will not be approved in 2023.