SEC Delays Another Bitcoin ETF, But Shares 39 Questions and Concerns Regarding Acceptance
- Bitcoin ETF sees another delay from SEC.
- SEC releases list of concerns that could force them to deny the approval of this Bitcoin ETF request.
No one likes to see another delay in the Bitcoin ETF from the Securities and Exchange Commission (SEC). However, this time was strikingly different. Even though the decision will not see the SEC again until August, there are some positive changes to come out of this delayed decision.
Much of the doubt that the SEC holds about the crypto industry is not so much about the fundamental nature of Bitcoin being considered digital currency, but about the volume and range that these markets hold.
The SEC explained that the concern with this specific Bitcoin ETF revolves around the uncertainty that it is:
“designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,” and “to protect investors and the public interest.”
If that statement was not enough, the SEC created an 11-point, 39-question list of concerns that could potentially lead to the disapproval after the next hearing.
Much like before, a lot of the reasoning for holding back approval has to do with the protection that the entity needs to implement to prevent insider trading and market manipulation.
The point of the ETF is to permit the trading of actual Bitcoin, rather than what Bitcoin Futures products do. The concept of over the counter (OTC) trading was introduced, but the SEC has doubts over these options as well, saying that this type of market is small and “unidentified.” They added that this trading option comes with “no formal structure.”
The Bitcoin market is always awake, which means that the SEC will need to also ensure that the network can prevent the manipulative activities when the ETF market is not available. One of the questions to this concern asked:
“Is the liquidity of the OTC bitcoin market is sufficient to support efficient arbitrage between the price of the Shares and the spot price of bitcoin?”
For anyone that wants to know the other questions that the SEC has posed, visit the official government website at https://www.sec.gov/.