The U.S. Securities and Exchange Commission (SEC) has once again delayed its decision on the spot Bitcoin ETF proposed by ARK Investment Management and 21Shares. In a filing released on Friday and a notice dated August 11, 2023, the SEC announced that it would “institute proceedings” to determine whether to approve or deny the Bitcoin ETF, opening a 21-day public comment period.
This latest delay follows a series of postponements by the SEC, with the next ruling or delay set for November 11, 2023. The total period for consideration is 240 days, broken into four periods of 45, 45, 90, and 60 days, set to expire on January 10, 2024. The SEC had previously delayed its decision for this planned product in June, setting up August 13 as its next deadline.
In a joint statement, ARK Invest CEO Cathie Wood and 21Shares CEO Hany Rashwan expressed their understanding of the process, stating, “While we are highly confident, we understand that the process for approving a spot BTC product will not happen overnight.” Their sentiment reflects the complex regulatory landscape surrounding cryptocurrency products.
The SEC’s decision to delay comes with specific requirements for approval. For listing on the Cboe BZX Exchange, an applicant must provide evidence of a “comprehensive surveillance-sharing agreement in place with a regulated market of significant size.” The SEC has previously rejected similar proposals, citing concerns that they would not be “designed to prevent fraudulent and manipulative acts and practices” or protect investors.
The discussion around spot Bitcoin ETFs has intensified in recent months, with applications from other firms like BlackRock and amendments to existing applications to include cryptocurrency exchange Coinbase as a surveillance-sharing partner. Despite this, as of August 11, the SEC has not approved any spot crypto ETF application for listing shares in the U.S., although it started allowing investment vehicles linked to BTC futures in October 2021.
Industry experts had anticipated the delay. Bloomberg Intelligence analyst Eric Balchunas and ARK’s Wood both expected the SEC to postpone the decision. Wood also predicted that the commission could simultaneously approve multiple spot BTC ETFs in the future, reflecting a broader trend towards potential acceptance of such products.
The SEC’s continued caution and the opening of a public comment period signal a careful approach to the regulation of Bitcoin ETFs. With the next decision date set for November 11, the crypto community and investors will be closely watching for further developments in this ongoing regulatory saga.
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