The launch of a spot Bitcoin exchange-traded fund (ETF) in the United States may face a longer delay as recent applications from investment managers have been deemed inadequate by the Securities and Exchange Commission (SEC).
The SEC has notified the Nasdaq and the Chicago Board Options Exchange (Cboe), representing asset managers, that their filings lack clarity and comprehensiveness.
The main concern raised by the SEC is the absence of a “surveillance-sharing agreement” with a spot Bitcoin exchange or insufficient details about surveillance arrangements.
However, the asset managers have the option to resubmit their applications after providing the necessary clarifications.
Following BlackRock’s inclusion among the companies aiming to launch the first spot Bitcoin ETF on Wall Street, a series of applications have been filed in recent weeks.
BlackRock’s application introduced a surveillance sharing agreement, which involves sharing information about market trading and clearing activities between entities to prevent potential market manipulation.
This move prompted ARK Invest and 21Shares to amend their own applications, including a similar surveillance agreement.
Other asset managers such as Invesco, WisdomTree, Valkyrie, and Fidelity have also resubmitted or amended their applications, with ARK Invest reportedly leading the race.
Exchange-traded funds (ETFs) are investment vehicles that track specific indices and are typically traded on exchanges.
In the cryptocurrency market, a cryptocurrency ETF refers to a fund that tracks the price of one or multiple digital tokens and comprises various cryptocurrencies.
The SEC has consistently denied spot Bitcoin ETFs since 2017. However, Canada has already made this financial product available.
Three notable funds—Purpose Bitcoin, 3iQ CoinShares, and CI Galaxy Bitcoin—have directly invested in spot Bitcoin in Canada.
In summary, the launch of a spot Bitcoin ETF in the United States is likely to experience a delay as the SEC has deemed recent applications inadequate due to a lack of clarity and comprehensive information.
Asset managers have the opportunity to rectify the filings and resubmit them after addressing the SEC’s concerns.
While spot Bitcoin ETFs have been denied by the SEC since 2017, Canada has already approved and offers several funds that directly invest in spot Bitcoin.
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