April 19, 2024
Policy & Regulation

SEC Pushes Bitcoin ETF Approval Deadlines to Early 2024

The US Securities and Exchange Commission (SEC) has a maximum window of 240 days to decide on crypto exchange-traded fund (ETF) applications, potentially pushing approval decisions to early 2024. This move has garnered attention due to several years of ETF applications and growing interest from investors.

BlackRock, the world’s largest asset management firm, added its Bitcoin ETF application to the list of filings under SEC review in June, reigniting interest in the crypto space. The SEC is also reportedly considering ETF applications with “surveillance-sharing agreements” like those from BlackRock and Coinbase. Other firms, including ARK Invest and Bitwise Asset Management, are awaiting SEC decisions.

SEC guidelines allow the regulator to delay ETF applications for up to 240 days from the initial filing in the Federal Register, often for public comment. Notably, the SEC has never approved a spot Bitcoin ETF proposal in the US. Bitcoin futures-linked ETFs, which the SEC accepted in 2021, might have posed fewer regulatory challenges.

The prolonged delay for a spot crypto ETF could be attributed to the complex nature of the crypto market in the US, which remains regulated yet lacks clarity and oversight. The SEC’s ongoing enforcement cases against major platforms like Coinbase, Binance, and Ripple have also contributed to cautious decision-making.

Some experts predict that multiple crypto ETF applications could be approved simultaneously to avoid giving any one company a significant advantage. This move aligns with the industry’s growing anticipation of regulatory clarity.

As the SEC’s decisions on crypto ETFs remain in the spotlight, regulatory debates continue among US lawmakers. The proposed legislation aims to define the roles of the SEC and the Commodity Futures Trading Commission (CFTC) in regulating digital assets. Recent court rulings, such as the SEC vs. Ripple case, also contribute to the evolving regulatory landscape.

Experts suggest that the SEC’s decisions on crypto ETFs are heavily influenced by Chairman Gary Gensler and the political composition of the commission. At present, there is an approximate 65% chance of a spot Bitcoin ETF being approved in the US, with analysts considering BlackRock’s application as a significant factor in this calculation.

With the 240-day window in place, the final decision for many crypto ETF applications might not be reached until early 2024, showcasing the SEC’s pivotal role in shaping the crypto investment landscape.

Image: Wikimedia Commons

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