SEC Engages in Dialogue with Bitcoin ETF Issuers; Updated Documents Expected Tuesday
In a surprising turn of events, U.S. Securities and Exchange Commission (SEC) officials have sent comments to a group of potential issuers of bitcoin exchange-traded funds (ETFs) just hours after the companies filed documents outlining fees for their proposed products.
According to an individual familiar with the comments, the issuers have been asked to file updated documents on Tuesday. The comments primarily address minor details in the amended S-1 forms rather than significant changes, and are not expected to delay the potential approval timeline by the regulator.
Some of the issuers hoping to launch spot bitcoin ETFs in the U.S. include prominent names such as BlackRock, Grayscale, and Fidelity. These companies announced their expected fees in filings just hours before receiving feedback from the SEC.
Commenting on the swift response from the SEC, Bloomberg Intelligence analyst James Seyffart described it as “borderline unheard of” for applicants to receive feedback within the same day for amended filings.
The recent comments from the SEC indicate that the agency is actively engaged in dialogues with the prospective ETF issuers. The deadline for one of the applications, submitted by Ark and 21 Shares, is fast approaching on January 10, 2024.
The flurry of amended filings by issuers, reflecting their conversations with SEC officials, has raised hopes that the agency will approve spot bitcoin ETFs to trade in the U.S. Furthermore, exchanges including Nasdaq, NYSE Arca, and Cboe BZX recently filed amended 19b-4 documents, signaling a potential step forward in the approval process.
Both 19b-4 and S-1 filings need to be deemed effective by the SEC before an ETF can begin trading. Advocates of bitcoin ETFs hope that a regulated financial product will allow traditional financial institutions and retail investors to gain exposure to the cryptocurrency’s price without needing to navigate new financial structures.
Despite the SEC’s history of rejecting applications for spot bitcoin ETFs, the amount of feedback and the speed of the agency’s response to the latest applications suggest that they may be cleared for takeoff in the near future.
With stakeholders eagerly anticipating the outcome of the SEC’s review, the fate of the nearly-a-dozen applications for bitcoin ETFs remains uncertain. However, the recent developments indicate that a decision may be imminent.