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On September 28, the U.S. Securities and Exchange Commission (SEC) submitted important documents concerning the pending spot Bitcoin exchange-traded funds (ETFs). These submissions act as formal orders that commence proceedings to assess whether the suggested rule modifications should be accepted or denied. Should these rule changes gain approval, it may pave the way for spot Bitcoin ETFs to be traded on commodities exchanges, representing a notable advancement in the cryptocurrency sector.
The SEC is currently requesting public feedback on various elements of these pending Bitcoin ETFs through these submissions. In the initial section, the SEC is looking for views on whether the proposed spot Bitcoin ETFs are vulnerable to fraud and market manipulation or if they possess mechanisms to mitigate such risks.
In another section, the SEC is asking for insights on particular characteristics of Bitcoin, such as its geographically diverse trading activity, relatively slower transaction speeds, and the level of capital needed for significant participation on trading platforms. The regulator is exploring whether these features inherently render the Bitcoin market resistant to manipulation.
Moreover, the SEC is examining the efficacy of a surveillance-sharing agreement with Coinbase in identifying, investigating, and preventing fraud. Several pending ETFs have included such agreements with Coinbase through amendments made in mid-July.
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The SEC is also seeking opinions on whether the Chicago Mercantile Exchange (CME) constitutes a regulated market of considerable size in comparison to the spot Bitcoin market. Additionally, it is looking for insights into the relationship between Bitcoin spot markets and the CME Bitcoin futures market. It is noteworthy that the SEC has previously authorized Bitcoin futures ETFs, which may affect its position on spot Bitcoin ETFs.
Significantly, the SEC has released orders for multiple ETFs at once. Two submissions relate to proposals from BlackRock (iShares) and Valkyrie, both seeking listings on Nasdaq. Another order pertains to an Invesco Galaxy proposal aimed at a Cboe BZX listing.
However, the most comprehensive order is associated with Bitwise’s spot Bitcoin ETF proposal, which differs from BlackRock’s submission and seeks a listing via NYSE Arca. This order consists of 88 pages, in contrast to the shorter eight-page orders for other ETFs. Bitwise has recently enhanced its filing with an additional 40 pages of documentation.
It is crucial to understand that these submissions do not explicitly postpone the SEC’s decision regarding the pending applications. Nonetheless, the extensive information requested by the SEC could prolong the proceedings. The SEC may either further delay its decision or outright reject the proposals. In the latter scenario, applicants could resubmit new applications and restart the regulatory process. The titles of the orders may imply potential approval, but the filings also contain cautionary language indicating that disapproval is being considered, with no final decisions made at this point.
The post SEC Seeks Input on Pending Bitcoin ETFs Amid Regulatory Scrutiny appeared first on BitcoinWorld.
