US Government Shutdown Makes Bitcoin ETF Approval Unlikely, According To Lawyer Chervinsky
U.S. Government Shutdown Makes Bitcoin ETF Approval Unlikely, According To Lawyer
The bitcoin community has been hoping for the approval of a bitcoin ETF for over a year. According to one expert, however, the U.S. government shutdown makes approval of a bitcoin ETF unlikely in the near future.
In statements on social media, securities lawyer Jake Chervinsky wrote that bitcoin ETF approval was “Not going to happen”.
Since last summer, the United States Securities and Exchange Commission has been analyzing the bitcoin ETF proposed by VanEck and SolidX. The Bitcoin Trust ETF is seen as one of the most promising exchange traded funds in the space – and the one most likely to receive approval. The decision on the ETF has been delayed twice already. In December, the SEC pushed the final decision on the VanEck/SolidX bitcoin ETF to February 28, 2019. The SEC must approve or deny the ETF on that date: it can delay the ETF no further.
Chervinsky, who has previously been outspoken about bitcoin ETFs on social media, was responding to multiple tweets from the crypto community asking if a proposed rule change from the SEC would pave the way for bitcoin ETF approval.
The theory from the crypto community goes like this: with the United States government shut down for the foreseeable future, agencies like the SEC could be left undermanned. President Donald Trump has suggested he is willing to let the shutdown drag on for months or even years over the funding dispute on the Mexican border wall.
In the midst of the government shutdown, the crypto community became aware of a specific rule: if the SEC is faced with a rule change proposal and does not specifically approve or deny that rule change before the deadline, then the rule change is automatically implemented.
The crypto community assumed this means that the rule change governing the bitcoin ETF would be automatically approved, immediately paving the way for bitcoin ETF approval.
Unfortunately, securities lawyer Jake Chervinsky shut down this idea. When asked if the rule change could pave the way for bitcoin ETF approval, Chervinsky responded:
“Not really. It's true that a proposed rule change is auto-approved if the SEC doesn't make a decision by the deadline, but in reality it would never happen. The SEC has enough staff to put out a decision, even if it's a one-pager saying “denied for reasons to be explained later””
It’s important to note that Chervinsky, a Washington-based securities lawyer, knows considerably more about this topic than the average crypto analyst.
“Not going to happen,” Chervinsky replied to another member of the crypto community asking if a government shutdown could pave the way for bitcoin ETF approval.
Meanwhile, approximately 800,000 government workers have been affected by the ongoing shutdown, and there are few signals that the shutdown will end in the near future. Unfortunately for bitcoin bulls, however, this shutdown is unlikely to lead to bitcoin ETF approval.
The SEC has until February 28, 2019 to make a final decision on the VanEck/SolidX bitcoin ETF.