According to an August 24 filing, the U.S. Securities and Exchange Commission (SEC) has put off its hearing on Bitcoin ETF applications. The SEC is delaying the Spot ETF application filed by the investment manager, VanEck, by 45 days.
Crypto exchange-traded funds (ETFs) are an attractive investment product for people looking to invest in cryptocurrency. The Bitcoin Spot ETF is based on the value of BTC, which the SEC has not yet approved for the market.
The SEC Calls for More Time
The regulatory commission is currently not ready to give its stamp of approval on the Bitcoin Spot ETF. It calls for more time before deciding on its next course of action.
However, past rulings show that it would be unlikely for the commission to give the go-ahead for fund managers to start issuing Bitcoin ETF products. Moreover, the agency has turned down several spot ETF applications from different firms. Meanwhile, the regulator has put the application on hold, indicating that it would review the request after 45 days.
Meanwhile, the firm’s customers yearn for approval because they have been pushing for the Spot ETF on VanEck. As a result, the VanEck Bitcoin Trust is on the brink of idleness due to the delay on the part of the SEC.
Supporters of the Spot ETF believe the approval will add some official backing to the market. Since the SEC is worried about the market, approving the Spot ETF applications will lessen doubt over investors’ participation in the ETF products.
Furthermore, the SEC is concerned about market manipulation and the absence of investors’ protection in ETF trading. As a result, the commission highlighted this as the main barrier to its willingness to approve the Bitcoin Spot ETF.
The SEC Faces a Fight Back
Aggrieved digital asset managers are fighting back as regulators continue to outline regulatory measures to oversee the crypto space. Following the clamor for the SEC to allow for the issuance of the Bitcoin Spot ETF, the regulator is bidding its time as it considers it too soon. However, the continued lack of approval has led to some ugly incidents between the commission and some companies.
After Grayscale saw its request to convert the Grayscale Bitcoin Trust to Spot ETF rejected, it sought court redress. In response to the SEC’s action, the company sued the agency. The lawsuit is expected to last between the third quarter of 2023 and the first quarter of 2024.
This is not the first time the SEC has taken the same stance against crypto companies seeking to offer Bitcoin Spot ETFs. Over the past year, it has rejected over a dozen applications while approving the Bitcoin Futures ETF. Digital asset managers continue to face a hard time convincing the agency.
The crypto industry will take a while to get its first Bitcoin Spot ETF approval. Only regulations can bring forth the drive, but this will also take a while.
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