Spot Bitcoin ETF Decision Nears as SEC Communicates December 29 Deadline for Amendments
The SEC has set December 29 as the date for final amendments to applications for spot Bitcoin ETFs, setting the stage for what would be a busy week for asset managers. The regulator will decide on the applications by January 10, 2024.
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The US Securities and Exchange Commission has set a December 29 deadline for spot Bitcoin exchange-traded fund (ETF) applicants to file their final S-1 amendments, according to a report by Reuters citing publicly available information and people familiar with the matter.
Reports emerged last week that the regulator had a conference meeting with at least seven asset managers. It appears that the deadline was communicated at that meeting—representatives of firms such as BlackRock, Ark Investments, 21 Shares, and Grayscale were in attendance.
With the regulator expected to make a final decision by January 10, every applicant seeking to be part of the first wave of spot Bitcoin ETFs in the US will have to meet the final deadline. Although the certainty of the SEC approving the application is not 100%, many analysts expect it to happen. Over the past few months, the agency has had several discussions with applicants to suggest that it will approve compliant applications.
Any approval will represent a milestone in making Bitcoin and digital assets more accessible to the public. The SEC has refused spot Bitcoin ETF applications since 2013, citing the risk of fraud and market manipulation.
However, events this year have forced the regulator to change its approach. Several factors nudged the SEC in this direction, including BlackRock filling out an application for a spot Bitcoin ETF. But the major determining factor might have been the federal appeals court's decision on the SEC's rejection of Grayscale's application to convert its GBTC to a spot Bitcoin ETF.
Since the discussions with the SEC started, the firms have amended their proposals several times to comply with SEC requirements. The latest amendment has seen BlackRock and Ark-21Shares allow cash redemptions in their ETFs. Those familiar with discussions claim the SEC requested the change from in-kind to cash.
Meanwhile, the final amendment would be where the asset managers will disclose their fees and the amount they will use to seed the ETFs. So far, only Ark Investment and 21 Shares have revealed that they will charge 0.80% for their joint EFTs. ETF fees could impact which fund records the most liquidity, especially in the early days. This is why many firms leave to the deadline to regain some advantage.
Hong Kong Regulators Open to Spot Crypto ETFs
The US might not be the only country to approve spot crypto ETFs in 2024. Regulators in Hong Kong have also expressed their openness to crypto ETFs as long as the applications address the risks associated with digital assets. The Securities and Futures Commission (SFC) and Hong Kong Monetary Authority (HKMA) disclosed this in a joint statement.
"The SFC is prepared to accept applications for the authorisation of other funds with exposure to virtual assets, including virtual asset spot exchange-traded funds."
Hong Kong is gradually becoming a digital asset hub since it updated its regulatory framework earlier this year. The country is already home to regulated exchanges and recently launched an e-HKD pilot program.
