Spot Bitcoin ETFs poised for approval following SEC discussions

WEB DESK: In a significant development on Friday, investment management firms, stock exchanges, and the US Securities and Exchange Commission (SEC) engaged in discussions to finalise the wording changes on filings for spot bitcoin Exchange-Traded Funds (ETFs).

Multiple sources familiar with the matter revealed that this crucial step could pave the way for the approval of these funds in the United States as early as next week.

Executives and representatives from five issuers participated in discussions with SEC officials regarding the S-1 prospectus documents, which are mandatory for ETF approval.

While the identities of these firms remain confidential due to the ongoing nature of the talks, expectations are high among them for the final approval of S-1 filings by late Tuesday or Wednesday.

Three issuers noted that the SEC requested “minor” changes during these discussions. Some asset managers may need to amend their filings to disclose fees or the identities of market participants for their ETFs.

These updates are expected to be submitted by 8 a.m. ET (1300 GMT) on Monday, with the potential for public disclosure on the same day, according to sources knowledgeable about the process.

According to Reuters, the SEC spokesperson refrained from commenting on individual filings, maintaining the agency’s standard practice.

Simultaneously, regulatory bodies have been collaborating with exchanges to finalise 19b-4 filings, outlining the rule changes necessary for the approval of spot bitcoin ETFs.

On Friday, exchanges submitted revisions to 11 of these filings, marking progress in the regulatory process.

Insiders familiar with the filing procedure suggest that issuers meeting the end-of-year filing revision deadlines could receive approval to launch by January 10.

This date holds particular significance as it marks the deadline for the SEC’s decision on the Ark/21Shares ETF, currently first in line for approval.

Despite multiple applications for spot bitcoin ETFs since 2013, the SEC has consistently rejected them, citing concerns about their vulnerability to market manipulation.

Last year, fourteen firms, including industry giants BlackRock, Fidelity, and WisdomTree, submitted applications and currently await the SEC’s decision.

In an unusual move, the SEC has requested issuers planning to launch next week to prepare written requests for an accelerated effective date for their ETFs. Typically, such timing discussions occur more informally, making this directive stand out.

Previous reports from Bloomberg indicated that SEC commissioners are expected to vote on the 19b-4 rule changes next week, with a likely vote taking place on Wednesday, as revealed by a source from one of the issuers.

The outcome of these discussions and potential approvals could mark a significant milestone in the integration of spot bitcoin ETFs into the US financial landscape, providing investors with new avenues for exposure to the cryptocurrency market.

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