SEC Delays Verdict on Two Major Spot Bitcoin ETF Proposals
The U.S. Securities and Exchange Commission (SEC) has announced an extension of its decision-making duration for two pending spot Bitcoin Exchange Traded Funds (ETFs) by Global X and Franklin Templeton, following concerns over market manipulation, as revealed in separate filings on November 17.
SEC Delays Decision on GlobalX’s Bitcoin ETF
In a recent development, the U.S. Securities and Exchange Commission (SEC) has decided to extend the review period for two key spot Bitcoin Exchange Traded Funds (ETFs).
This decision, announced through separate filings on November 17, indicates a more cautious approach by the SEC in its evaluation of these financial products.
The focal point of this extension is a proposal by Cboe BZX Exchange to list GlobalX’s spot Bitcoin ETF. Initially filed on August 4 and subsequently published for public comment on August 23, the proposal has been under the SEC’s scrutiny.
The SEC had initially set November 21 as the deadline to either approve, deny, or commence proceedings to determine the future of this rule change.
However, in a recent turn of events, the SEC has opted for the latter, initiating proceedings that will extend the decision-making process until February 2024.
SEC Also Prolongs Review of Franklin Templeton’s Bitcoin ETF Application
Accompanying the extension for GlobalX’s ETF proposal, the SEC has also issued a second order delaying its decision on a similar spot Bitcoin ETF application from Franklin Templeton.
This application, initially submitted on September 26 and opened for public comment on October 3, was initially slated for a decision by November 17. The SEC has now extended this timeline, setting a new decision deadline of January 1, 2024.
The decision to prolong the review period for both GlobalX and Franklin Templeton underscores the SEC’s cautious and thorough approach towards the integration of Bitcoin-based financial products into the mainstream market.
These extensions are particularly notable given the rising interest in spot Bitcoin ETFs, a trend underscored by BlackRock’s mid-June application for a similar fund.
GlobalX and Franklin Templeton are part of a growing list of financial institutions seeking to capitalize on the burgeoning interest in cryptocurrency-based investment products.
The SEC’s extended review periods for these applications indicate a regulatory environment that is adapting to the complexities and nuances of the cryptocurrency market.
By allowing additional time for consideration and public feedback, the SEC aims to ensure that any approval of such ETFs is well-considered and aligns with broader market stability and investor protection objectives.
SEC Filings on Bitcoin ETFs: Seeking Input, Not Delays
Contrary to many reports characterizing the recent SEC decisions as ‘delays’, the official orders on the GlobalX and Franklin Templeton spot Bitcoin ETFs do not use this terminology.
Instead, these filings emphasize the SEC’s request for public input on critical issues like market manipulation and surveillance-sharing agreements. These concerns have been longstanding in the discourse around spot Bitcoin ETFs.
Since September, the SEC has been actively soliciting similar information for other proposed spot Bitcoin ETFs. In response, various applicants have been updating their filings to address these requests.
ARK Invest CEO and CIO Cathie Wood views these questions from the SEC as a constructive development. In a recent CNBC interview, she remarked that the SEC’s engagement and requests for additional information are more indicative of progress than stagnation.
Despite the possibility that the SEC might reject some of these pending proposals, there is a sense of optimism among some experts. Bloomberg analysts Erich Balchunas and James Seyffart, for instance, have projected a high likelihood of approval for a spot Bitcoin ETF, estimating the chances at 90% by January 2024.
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