The battle over approval of Bitcoin ETFs continues unabated, with news bringing the SEC closer to Franklin Templeton and Hashdex ETFs and pushing away those of VanEck and ARK.
News on Bitcoin ETF approvals difficult to decipher
The US Securities and Exchange Commission (SEC) has recently made several moves in the world of crypto world ETFs.
In this article, we will analyze the SEC’s consideration of ETF applications filed by Franklin Templeton and Hashdex, as well as the delay in decisions regarding spot ether ETFs by VanEck and ARK.
Franklin Templeton and Hashdex have both applied for a spot ETF on Bitcoin, while Hashdex is seeking approval for a spot ether ETF.
The SEC operates on a timeline that provides a maximum of 240 days to approve or reject an ETF application from the date of publication in the Federal Register.
This timeline places the decision date for these proposed funds at the end of May 2024. However, it is worth noting that the SEC has the flexibility to request additional public feedback at various interim deadlines, which can potentially lead to further delays in the final decision.
Delays of the Security Exchange Commission
Historically, the SEC has often used the full 240-day period for its decisions. Currently, there are high expectations for a number of ETF applications from major players in the cryptocurrency industry, including BlackRock, WisdomTree, Invesco Galaxy, Wise Origin, VanEck, Bitwise, and Valkyrie Digital Assets.
Initially, the decisions were scheduled for mid-October. However, due to concerns about a possible federal government shutdown, the SEC extended the deadlines for bitcoin ETF applications from Ark 21Shares and Global X, and further delays may be on the horizon.
In a major development in late August, a federal appeals court ruled that the SEC must reconsider the denial of Grayscale Investments’ request to turn its Grayscale Bitcoin Trust into an ETF.
The court cited inconsistencies in the SEC’s approval process for similar bitcoin products. This decision drew the attention of four members of the US Congress, namely Mike Flood, Wiley Nickel, Tom Emmer and Ritchie Torres.
The willingness of members of Congress to approve ETFs on Bitcoin
In a 26 September letter addressed to SEC Chairman Gary Gensler, these lawmakers called for the immediate approval of Bitcoin spot exchange-traded funds (ETFs).
They argue that the SEC is discriminating against spot bitcoin ETFs and point to the legal precedent set by Grayscale Investments, which obtained a review of its proposed ETF.
The court ruling found fault with the SEC’s reasoning, deeming it “arbitrary and capricious,” especially considering that the agency had already approved investment vehicles linked to Bitcoin futures.
The lawmakers stressed that a regulated spot bitcoin ETF would improve investor protection by providing a safer and more transparent point of access to bitcoin.
They stressed the responsibility of Congress to ensure that the SEC approves investment products in line with the requirements set by Congress.
In conclusion, recent SEC actions and decisions have brought significant attention to the cryptocurrency ETF landscape.
While Franklin Templeton and Hashdex await their verdicts, the delay in decisions regarding VanEck and ARK’s ether ETFs adds an element of uncertainty to the market.
The federal appeals court ruling in favor of Grayscale Investments has also prompted members of Congress to push for quick approval of spot ETFs on Bitcoin, underscoring the need for investor protection and transparency in this rapidly evolving industry.
As the saga of cryptocurrency ETFs unravels, the industry continues to await the SEC’s final decisions.