SEC Postpones ARK21Shares Spot Bitcoin ETF Approval to January 2024 – Here’s Why

The post SEC Postpones ARK21Shares Spot Bitcoin ETF Approval to January 2024 – Here’s Why appeared first on Coinpedia Fintech News

The Securities and Exchange Commission of the U.S. has delayed the approval or disapproval of a proposed rule up to the maximum period allowed. It will pass the rule in January 2024. 

Decision of the SEC

In a recent press release by the SEC, it announced that the Commission finds it appropriate to take longer time to approve or disprove a proposed regulation change that the ARK 21Shares’ spot BTC ETF would be permitted on the Cboe BZX Exchange or not. 

The postponement occurred on the same day that the SEC postponed deciding on fund manager GlobalX’s proposed Bitcoin ETF. Although the regulator typically waits until a few days before any deadline to submit a delay, it’s unclear why the commission allocated more extended periods to decide the outcome of the spot Bitcoin ETF proposals weeks ahead of their upcoming deadlines in October and November.

The ultimate date set by the SEC for ARK 21Shares is 240 days after the first application, i.e., November 10, after the additional 60 days to examine the offering. The following deadline for GlobalX’s ETF is set for November 21.

Letter from U.S. Lawmakers to SEC Urging the Approval of Bitcoin EFT

Soon after the SEC’s decision to delay the process, a joint letter from the bipartisan lawmakers, a group of four U.S. Representatives called for SEC chair Gary Gensler to “immediately” approve a spot Bitcoin ETF. 

The lawmakers claimed the SEC was practicing “inconsistent and discriminatory standards” in approving ETFs linked to crypto futures but not spot investment vehicles. The lawmakers argued that by not approving a spot Bitcoin ETF, the SEC hindered innovation and limited investment opportunities for American investors. They emphasized the need for regulatory clarity and urged the SEC to level the playing field by treating spot investment vehicles on par with crypto futures.

The SEC has not yet authorized any spot BTC ETFs for listing on American exchanges. Following the SEC’s defeat by Grayscale in the Court of Appeal for the District of Columbia in August, many industry insiders hypothesized that the agency would take a second look at any outstanding ETF applications. 

The following deadlines for spot crypto ETF applications are set for October by seven prominent companies: BlackRock, WisdomTree, Invesco Galaxy, Valkyrie, Bitwise, VanEck, and Fidelity. These deadlines may be postponed or extended by the SEC until March.

Market Opinion 

This approach by the SEC has sparked speculation among market participants about the potential reasons why the decision-making process has been extended unnaturally. Some experts suggest that the commission may take extra time to thoroughly evaluate the potential risks and benefits of approving a Bitcoin ETF, considering its impact on the broader financial market. Others believe the SEC’s decision could be influenced by external factors such as ongoing regulatory developments or market volatility surrounding cryptocurrencies.