With multiple applications for a spot Bitcoin ETF already filed, many have continued to speculate when the SEC is likely to give its approval or otherwise. To further add to speculations, Galaxy Digital CEO Mike Novogratz, citing his sources, stated that approval was likely to come within four to six months. However, recent developments seem to suggest that the wait could be longer.
SEC Stalling?
In a release dated August 11, the US Securities and Exchange Commission (SEC) has moved to delay the ARK 21Shares Bitcoin ETF in a move that could be seen as a delay tactic by the regulator.
Cathie Wood’s ARK Invest and 21Shares had collaborated again to refile for a spot Bitcoin ETF earlier this year after the SEC rejected previous applications. Following the standard procedures, the SEC was meant to approve or disapprove the application by August 13. However, with its latest order calling for public input on ARK 21 Shares application, this deadline is consequently extended.
With this, the general public has three weeks to give further comments on the proposal, while the SEC has another five weeks to respond to any comments it may receive. Furthermore, the SEC can choose to extend the deadline by 240 days at the maximum (a move that could potentially delay a final response until Jan 10, 2024).
This news would most likely not come as a surprise to ARK Invest’s CEO Cathie Wood, as she had predicted a delay when speaking to Bloomberg on August 7. She also forecasted that the SEC might approve multiple Bitcoin ETF applications. However, nothing is certain, as the regulator could also deny all applications as it has done in the past.
Concerns Over Bitcoin Manipulation & Regulation
While the crypto community swallows the hard pill of the SEC’s latest move, some experts have called attention to the SEC’s multiple uses of the word “manipulation” in its latest release. This is worrisome, considering that the SEC had previously rejected spot Bitcoin ETF applications on the grounds of potential market manipulation.
Furthermore, the SEC’s continued reference to this word may also mean that the regulator, maybe in a bid to frustrate these applications, could ask that they prove that Bitcoin is not a manipulated asset class.
That will undoubtedly be a huge ask considering that, over time, there have been instances that raised speculations that the crypto market can be manipulated by major players. Furthermore, Bitcoin is a borderless and decentralized currency, and even if the SEC were to move to regulate its use in the US, the ETF market could still be manipulated by external activities from outside the US.
The SEC also made raised concerns about Bitcoin not having a “regulated market or significant size,” something which could hinder the approval of any spot-traded Bitcoin ETF. The agency pointed out the fact that Bitcoin Future ETFs were approved because they were regulated by the Commodity Futures Trading Commission (CFTC). Meanwhile, Bitcoin isn’t regulated by any agency.
