The U.S. Securities and Exchange Commission (SEC) has reportedly instructed spot bitcoin exchange-traded fund (ETF) applicants to finalize amendments to their registration statements (S-1s) by Dec. 29 to be considered in the first wave of spot bitcoin ETF decisions. The SEC has emphasized the exclusion of the in-kind creation method in the filings, pushing for the use of the cash creation method.
Key Points:
Deadline for Final Amendments: The SEC has set a deadline of Dec. 29 for spot bitcoin ETF applicants to finalize amendments to their S-1 filings. The issuers have been informed that applications fully finished and filed by this date will be considered in the initial wave of spot bitcoin ETF decisions.
Exclusion of In-Kind Creation: The SEC has explicitly instructed applicants not to mention the in-kind creation method in their filings. The regulator has emphasized that any mention of in-kind creation will lead to the rejection of the applications. The SEC is advocating for the use of the cash creation method in spot bitcoin ETF filings.
Meetings with Issuers: SEC officials held meetings with representatives from at least seven companies seeking to launch spot bitcoin ETFs in early 2024. The discussions included participants such as BlackRock, Grayscale Investments, ARK Invest, and 21shares. Representatives from exchanges where the ETFs could be traded, such as Nasdaq and Cboe, were also involved.
Anticipated Approval in Early 2024: Executives who engaged with the SEC noted that the regulator suggested approval for the proposed spot bitcoin ETFs could come in the first few business days of 2024. The issuers are expected to receive direct notifications of the effective date for their ETF launch requests.
Spot Bitcoin ETF Landscape: Currently, there are 13 spot bitcoin ETF applications pending at the SEC. The industry anticipates that the regulator may approve multiple spot bitcoin ETFs simultaneously. BlackRock recently revealed plans to seed its spot bitcoin ETF with $10 million on Jan. 3, 2024.
Gary Gensler's Legacy: Some observers consider the approval of spot bitcoin ETFs as potentially forming SEC Chair Gary Gensler's legacy. Gensler recently issued a warning about investing in crypto, adding to the heightened anticipation surrounding spot bitcoin ETF approval.
Implications for Cryptocurrency Regulation: The SEC's deadline for spot bitcoin ETF applicants to finalize filings underscores the regulator's scrutiny of the industry and its emphasis on specific filing details. The exclusion of the in-kind creation method aligns with the SEC's push for the use of the cash creation model. The anticipated approval of spot bitcoin ETFs in early 2024 could have significant implications for the broader regulatory landscape surrounding cryptocurrency.
Conclusion: As the SEC sets a deadline for spot bitcoin ETF applicants and emphasizes specific filing requirements, the cryptocurrency industry awaits decisions that could shape the regulatory environment. The exclusion of the in-kind creation method and potential approval in early 2024 highlight the evolving dynamics of regulatory considerations in the crypto space. The outcomes will not only impact individual issuers but also contribute to the broader narrative of regulatory approaches to cryptocurrency-based financial instruments.
(Kevin Helms, Bitcoin News, 2023)