Per multiple reports, the deadline for the US Securities and Exchange Commission (SEC) to approve global asset management firm ARK’s request for a Bitcoin (BTC) Spot Exchange Traded Fund (ETF) is fast approaching. Accordingly, the crypto community is counting the days to the August 13 deadline, when the regulator would announce an approval or rejection of the firm’s ETF filing.
Will The SEC Push Its Decision To 2024?
The application for ARK’s Bitcoin ETF entered a new phase on May 15 after the Federal Register officially documented its filing. This marked the beginning of the countdown to the regulator’s decision.
Another submission on June 15 provided additional clarity, identifying August 13 as the critical date when the SEC is expected to conclude its final decision on the application. As a result, the securities watchdog would either approve the proposed rule change or decline ARK’s request.
However, the SEC’s authority to extend this deadline (if necessary) is an important consideration. In addition, the maximum allowable extension is 240 days, which could mean that ARK’s application may receive a final response on January 10, 2024.
Similarly, other applicants’ decisions may be postponed until March 2024. Meanwhile, the potential timeline extension adds uncertainty to the numerous ETF applications at the SEC’s desk. It is worth noting that aside from ARK, a slew of other firms have submitted their applications for the approval of spot BTC ETFs.
BlackRock, Bitwise, First Trust, Fidelity, Galaxy, WisdomTree, Wise Origin, Valkyrie, and VanEck are notable mentions in this category. Moreover, Grayscale has also joined this group.
It submitted a request to convert its Grayscale Bitcoin Trust into a Bitcoin Spot ETF. This request adds to the complication of the multiple ETF applications.
If the SEC approves one of the BTC ETFs without approving the other, it will undoubtedly spark debate about the importance of its biased approach to issues. The call for equal treatment and eliminating any bias among applicants would gain traction among BTC ETF enthusiasts.
Concerns Over Market Manipulation
In contrast to previous spot Bitcoin ETF filings, the current batch of applications adds new intrigue to the mix: including a unique “surveillance sharing” arrangement with significant exchanges like Cboe and Nasdaq. This novel agreement is intended to simplify information sharing about several market activities, such as clearing activities and customer identification.
Thus, investors and traders will have less fear of market manipulation, which has consistently been a concern. Moreover, the agreement is intended to protect against unauthorized diversions of investor funds, effectively addressing a critical issue the SEC gave as a reason for rejecting previous applications.
While these changes are significant, their impact on the SEC’s stance remains unknown. Most analysts argue that the regulator will only be active if forced to act by the ETF applicants.
Meanwhile, Grayscale filed a lawsuit against the SEC after the agency refused to approve the firm’s transformation into a Spot Bitcoin ETF. Judges probed the SEC’s refusal throughout the legal proceedings, pointing to the commission’s previous approval of Bitcoin futures contracts with comparable surveillance measures.
The court battle adds an intriguing dimension to the unfolding scenario, further questioning the SEC’s position and selective approach. As this legal battle continues, the SEC must provide well-defined justifications for its decision.
Although there is growing optimism within the crypto community that the SEC will approve a Spot Bitcoin ETF soon, there is still some reservation about the agency’s willingness to approve one. This mix of hope and doubt shape the ongoing debate around this significant regulatory decision.
Nevertheless, Bloomberg Intelligence analysts opined that the SEC has a 65% chance of approving a Bitcoin ETF based on current circumstances. They based their prediction on several factors, such as the regulator’s ongoing challenges in the Grayscale legal case and the potential impact of political dynamics, particularly from entities such as BlackRock.
As the deadline for the SEC’s decision on ARK’s Bitcoin ETF proposal approaches, the cryptocurrency ecosystem is anticipating a decision that could significantly alter the landscape of digital asset investment.
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