SEC Challenges BlackRock, Fidelity’s Bitcoin ETF Filings
• The U.S. Securities and Exchange Commission (SEC) is reportedly saying that BlackRock and Fidelity’s applications for a spot Bitcoin (BTC) exchange-traded fund (ETF) are unclear and incomprehensive.
• The regulatory agency recently told Nasdaq and the Chicago Board Options Exchange (CBOE), who filed the applications on behalf of the firms, that the applications are inadequate.
• According to Bloomberg senior ETF analyst Eric Balchunas, this is arguably good news as it indicates that the SEC wants more information on the proposed ETF before approving it.
BlackRock and Fidelity’s Spot Bitcoin ETF Filings Challenged by SEC
The U.S. Securities and Exchange Commission (SEC) has reportedly raised questions about BlackRock and Fidelity’s applications for a spot Bitcoin (BTC) exchange-traded fund (ETF). The regulatory agency has apparently told both Nasdaq and the Chicago Board Options Exchange (CBOE), who filed the applications on behalf of these firms, that the filings are inadequate in some respects.
Why Are SEC’s Questions Unclear?
One of key issues here is that the SEC has asked for further information regarding surveillance agreements between potential ETFs and cryptocurrency exchanges, but failed to name which cryptocurrency exchange or provide details about how such an agreement would work in practice. This lack of clarity has raised questions among industry observers as to why this issue wasn’t addressed earlier by BlackRock or Fidelity when filing their applications with Nasdaq or CBOE.
What Does This Mean For Potential Approval?
Despite being unanswered by both companies’ filings, some commentators have suggested that this may be a positive sign from the SEC as they are seeking out more information before making a final decision on approving an ETF application from either company. Bloomberg senior ETF analyst Eric Balchunas believes this could bode well for future approval prospects, noting: “Basically [the] SEC wants them to name the ‘crypto exchange’ and give more details on [surveillance agreement]. That’s understandable, arguably good news.”
Previous Rejections from Regulatory Agency
Despite potential progress towards achieving approval for a spot BTC ETF from BlackRock or Fidelity, previous attempts have been unsuccessful so far due to various reasons including concerns about liquidity issues or potential fraud associated with cryptocurrencies . VanEck & ARK Invest have also had their respective bids rejected at different times over similar worries expressed by regulators in recent years.
Conclusion
It appears therefore that there still remains significant hurdles ahead of any company wishing to gain regulatory approval for launching a spot BTC ETF in what is still a volatile market subject to intense scrutiny by regulators across many jurisdictions around world.