With the SEC having a maximum 240-day window to delay crypto ETF applications, some firms may have to wait until March 2024 to hear back on submissions filed in July 2023.
After several years of applications, the United States Securities and Exchange Commission (SEC), the financial regulator with the final say on permitting a spot cryptocurrency exchange-traded fund (ETF), may be edging closer to approving the investment vehicle.
According to SEC standards, the federal regulator has the right to postpone ETF applications for up to 240 days after the first filing in the Federal Register, either by opening them to public comment or otherwise. Nonetheless, the SEC has never authorized a spot Bitcoin ETF proposal from a US firm and will only begin accepting investment vehicles linked to BTC futures in October 2021.
The structure of the investment vehicle may be one of the hurdles in obtaining SEC approval for a spot crypto ETF. Individuals and businesses can also invest in Bitcoin futures-linked ETFs without using an exchange, but a spot BTC ETF could involve holding Bitcoin within a fund for more direct investing.
BlackRock, ARK Invest, Bitwise Asset Management, VanEck, WisdomTree, Invesco and Galaxy Digital, Fidelity and Valkyrie were among the top asset management firms with spot Bitcoin ETF applications under evaluation by the SEC at the time of publishing. With the SEC’s maximum 240-day extension window, the final date for ARK’s Bitcoin ETF is January 2024, while approval or disapproval of all other firms’ offerings might come as late as March 2024.
Part of the SEC’s apparent reluctance to approve a spot crypto ETF may stem from the structure of the US crypto sector, which, while regulated, has left many lawmakers and industry executives demanding for additional clarity and supervision.
However, The SEC is currently pursuing enforcement cases against Coinbase, Binance and Ripple, and it has already levied financial penalties against firms such as Bittrex.
U.S. lawmakers are currently considering legislation to better define the roles the SEC and Commodity Futures Trading Commission (CFTC) should have in regulating digital assets.
Furthermore, both the regulator and the sector may have to consider court rulings until regulations are better defined, as a judge in the SEC vs. Ripple case mainly determined that XRP was not a security, which has repercussions for everyone dealing with crypto in the United States.
Please note that this articles does not offer any instructions or suggestions regarding investment decisions. Therefore, it is essential that you carefully evaluate your financial situation and conduct thorough analysis, or seek advice from a qualified professional, before making any investment decisions.