According to a document that was filed on the 24th of August, the United States Securities and Exchange Commission (SEC) has decided to postpone its hearing on applications for Bitcoin ETFs. The application for a Spot ETF that was submitted by VanEck, an investment manager, will be delayed by the SEC for a period of 45 days.
People who are interested in investing in cryptocurrencies may want to consider crypto exchange-traded funds (ETFs), which are an attractive investment product. The value of BTC, which the SEC has not yet certified for trading on the market, serves as the basis for the Bitcoin Spot Exchange Traded Fund.
The SEC Requests Additional Length of Time
At this point in time, the regulatory commission is not prepared to offer the Bitcoin Spot ETF their official seal of approval. It requests further time before moving on to choose its next course of action.
On the other hand, previous decisions indicate that it is highly improbable that the commission will give the go-ahead for fund managers to begin creating Bitcoin ETF products. This is because of the precedent that has been set. In addition, the SEC has denied several applications for spot ETFs that were submitted by different companies. In the meanwhile, the regulating body has indicated that it would evaluate the request after a period of forty-five days and has put the application on hold.
In the meantime, the company’s clients are anxiously awaiting clearance because they have been lobbying for the Spot ETF to be offered by VanEck. As a direct consequence of this, the VanEck Bitcoin Trust is on the verge of becoming inactive as a direct result of the delay caused by the SEC.
Spot exchange-traded fund proponents hope that the approval of the fund will lend the market some governmental support. If the Spot ETF applications are approved, there will be less uncertainty over investors’ involvement in the ETF products. This is because the SEC is concerned about the market.
In addition, the SEC is worried about investors not being protected from market manipulation and the absence of such protection in ETF trading. As a direct consequence of this, the commission identified this as the primary obstacle standing in the way of its willingness to sanction the Bitcoin Spot ETF.
There Will Be a Fight Back Against the SEC
The administrators of digital assets that are upset about the regulatory procedures that are being outlined to supervise the cryptocurrency market are now fighting back. As a response to the widespread demand that the SEC grant permission for the creation of the Bitcoin Spot ETF, the governing body is currently hedging its bets since it believes the time is not yet right. On the other hand, the persistent absence of approval has resulted in a number of unpleasant episodes involving the commission and other companies.
Following the denial of Grayscale’s request to convert the Grayscale Bitcoin Trust into a Spot ETF, the company decided to seek legal action. In response to the SEC’s move, the firm sued the agency. It is anticipated that the legal proceeding will continue until sometime between the third quarter of 2023 and the first quarter of 2024.
It is not the first time that the Securities and Exchange Commission has taken this approach against crypto businesses who are attempting to issue Bitcoin Spot ETFs. Over the course of the past year, it has turned down more than a dozen applications while at the same time giving its OK to the Bitcoin Futures ETF. The agency remains resistant to the arguments of digital asset managers despite their best efforts.
It will take some time for the cryptocurrency industry to receive clearance for its first Bitcoin Spot ETF. Only rules will be able to instill the necessary drive, but this process will take some time.