SEC Delays Approval of Spot Bitcoin ETFs Even As Lawmakers Pile On Pressure for Green Light ''Immediately''

SEC Delays Approval of Spot Bitcoin ETFs Even As Lawmakers Pile On Pressure for Green Light ”Immediately”

Updated: 27 September 2023

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The US Securities and Exchange Commission (SEC) flouted calls from four congressman to ”immediately” approve spot Bitcoin ETFs and delayed until early next year a decision on an application by ARK 21 Shares.

It also deferred a decision on a Bitcoin ETF application from fund manager Global X until at least November, indicating that the regulator is also likely to delay decisions that may have been made as early as next month on applications by BlackRock, WisdomTree, Invesco Galaxy, Valkyrie, Bitwise, VanEck and Fidelity.

That would be a big setback for the crypto industry, which is banking on the approval of spot crypto ETFs to boost demand and help pull prices out of a funk. There was growing optimism of an early approval after Grayscale Investments won a landmark victory over the SEC when a judge called the regulator’s decision to approve Bitcoin Futures ETS, but not spot Bitcoin ETFs, ”arbitrary and capricious.” Former SEC chair Jay Clayton says the approval of spot Bitcoin ETFs is ‘’inevitable.’’

The SEC usual announces such delays a few days before the deadline for a decision, but in the case of ARK 21 Shares announced it early without explanation. The decision had initially been deferred from August 11 to November 11 and the SEC will now be required to give a final decision on January 10.

“It is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change […] and the issues raised therein,” it said on Sept. 26.

Pressure Mounts on SEC

The Ark 21Shares and Global X delays follow a letter sent by four members of the United States Congress requesting SEC Chair Gary Gensler to “immediately” approve the listing of spot Bitcoin ETFs.

In the letter, dated September 26, U.S. Representatives Tom Emmer, Ritchie Torres, Mike Flood, and Wiley Nickel urged the SEC to stop “discriminat[ing] against spot bitcoin exchange-traded products.”

Bipartisan letter from @USRepMikeFlood @RepWileyNickel @GOPMajorityWhip and @RitchieTorres to SEC Chair Gensler on not approving a bitcoin spot ETF: “there is no reason to continue to deny such applications under inconsistent and discriminatory standards.” https://t.co/6x5XaUsUqT

— Ron Hammond (@RonwHammond) September 26, 2023

The SEC was accused of adopting “inconsistent and discriminatory standards” by permitting crypto futures ETFs but not spot investment products, especially after the Grayscale court ruling.

According to the Congressmen, “A regulated spot bitcoin ETP would provide increased protection for investors by making access to bitcoin safer and more transparent.” “Congress has a duty to ensure the SEC approves investment products that meet the requirements set out by Congress,” they added.

The four lawmakers, two from each party, told Gensler there was “no reason to continue to deny” spot crypto ETF applications, urging immediate approvals.

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