The SEC has now postponed decisions on several spot BTC ETF applications, including ARK 21Shares, Valkyrie, WisdomTree, VanEck, and Bitwise.
The United States Securities and Exchange Commission (SEC) has officially delayed making a decision on a spot Bitcoin exchange-traded fund (ETF) proposal from ARK 21Shares. The Commission seems to be exploiting the maximum time required to make a decision and had given itself an additional 60 days.
The SEC published a notice stating that it needed more time to either approve or reject the ARK 21Shares application proposed for listing on the Cboe BZX Exchange. This decision may be unsurprising to ARK Investment Management founder and CEO Cathie Wood, who said she expects the SEC to delay a decision. Optimistically, she also predicted that the Commission would approve a few spot BTC ETFs simultaneously. The SEC’s notice reads:
“The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change…and the issues raised therein.”
The notice is surprisingly early as the SEC wasn’t due for a decision until November 11. Considering the 60-day postponement, the notice now specifies that the Commission has until January 10, 2024, to approve or reject the proposal.
The US SEC has never approved a spot Bitcoin ETF, and rejected ARK 21Shares’ second attempt in January. According to the SEC, the Cboe BX Exchange was unable to establish a comprehensive surveillance-sharing agreement (SSA). The Commission concluded that the exchange would be unable to adequately protect investors from price manipulation and other fraudulent activity.
SEC Postpones ARK 21Shares Application Despite SSA Amendment
In June, Cboe amended its 19b-4 filing to reflect a spot BTC SSA. The updated filing specified that the SSA will provide Cboe BZX with data on spot BTC trades. In addition, the agreement assures transparency as it involves two members of the Intermarket Surveillance Group (ISG). The ISG runs a network where exchanges share information to prevent market manipulation and other forms of trading abuse.
The Cboe’s amendment followed a similar one from BlackRock (NYSE: BLK), also proposing an SSA. At the time, CF Benchmarks CEO Sui Chung noted that no US national stock exchange had ever proposed a rule change for this reason. The inclusion of an SSA is an attempt to allay SEC fears of market manipulation.
There are speculations that the SEC may finally approve a spot ETF this year. Observers had suggested that the SEC might be willing to approve BlackRock’s proposal because it is a traditional institution. In June, Bloomberg analysts stated that the asset management giant has a 50% chance of receiving approval from the SEC.
Unfortunately, the SEC recently delayed BlackRock’s proposal, postponing a decision until October 17. The Commission has also postponed decisions on spot Bitcoin ETF proposals from Valkyrie, WisdomTree, VanEck, and Bitwise.
In a letter sent on Tuesday to the SEC Chair Gary Gensler, four members of the US Congress requested the immediate approval of spot Bitcoin ETFs. According to the Reps, the SEC’s refusal to approve an SEC is inconsistent and discriminatory, especially as the Commission has approved crypto futures ETFs.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.