The U.S. Securities and Exchange Commission (SEC) has delayed its ruling on VanEck’s application for a spot Bitcoin ETF, according to a filing on August 24. The SEC will extend its decision on the application for another 45 days.
Clearly, the SEC wants more time to consider whether to accept a spot ETF application. However, based on previous SEC rulings, it is possible that the outcome will not be favorable.
The agency has rejected several spot ETF applications, including VanEck’s spot Bitcoin ETF application last year. VanEck filed this new application for a Bitcoin ETF in July, about eight months after that rejected application.
The SEC’s delay in this will upset the company and crypto enthusiasts. They argue that this will add some legitimacy to the market and actually suppress some of the concerns the SEC is worried about.
Those concerns include market manipulation and lack of investor protection, which the SEC has repeatedly highlighted as barriers to Bitcoin ETF approval. However, it still wasn’t enough to stop VanEck, one of the oldest ETF providers, from trying to launch the first spot Bitcoin ETF.
In its filing notice of the delay, the SEC said:
“The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”
In fact, the SEC approved futures ETFs, which it seems more willing to do. VanEck itself launched a Bitcoin Futures ETF in October 2021, alongside ProShares as one of the first companies to issue ETF Futures for the asset.
The lack of SEC approval for a spot Bitcoin ETF has led to a few unintended consequences. Accordingly, the Authority denied Grayscale’s request to convert the Grayscale Bitcoin Trust into an ETF. In response, the company quickly sued the agency, and the lawsuit is expected to take place between the third quarter of 2023 and the first quarter of 2024.
It may take some time before the crypto market sees the first spot Bitcoin ETF launch. Making regulations clearer could help make this happen, but it won’t happen overnight.
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