In a document published Tuesday morning, the U.S. Securities and Exchange Commission (SEC), who presides over such products, revealed that it won’t be issuing a final verdict (approve or deny) just yet. The new deadline to review Bitwise proposal has been shifted to undisclosed date, as the agency said that it needs more time to review the potential rule change further.
To please SEC and make them approve a cryptocurrency-based exchange-traded fund, ETF became almost like a Grand Prix for many crypto analysts over the last few years. Many of them think that having SEC’s approval would finally give the crypto versification a sign of respectability and credibility from a regulatory agency that it’s lacked so far.
Also, it would probably mean that ways to enter the game would be much easier for institutional investors. However, so far, many applications have been sent to SEC, but they’ve all been denied.
SEC’s resistance on the matter didn’t discourage analysts and companies of the value that an ETF would have for the cryptospace as a whole and, moreover, to the company that manages to pull the trick off first, which is why there are new projects and new applications to approve them.
On February 15, Bitwise filed its application with NYSE Arca hoping that SEC will decide on their ETF proposal within 45 days of the filing i.e. April 1. However, the SEC decided to take the privilege of extending the period, with a maximum permissible extension up to 90 days. The SEC last postponed a decision on both the Bitwise and VanEck/SolidX proposals at the end of March saying that May 16 will be the ultimate date for it to make the decision. The filing read that by this date:
“The Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.”
As a result of this delay, cryptocurrency markets fell. Bitcoin prices pushed lower in the last few hours from its one-year high it hit earlier in the session to trade around $7,812 at the time of writing.
The regulator has yet to comment on the proposal from VanEck and SolidX, which many investors believe has a higher chance of succeeding.
While this happened, from Bitwise they said that they still believe its proposal should be approved.
Bitwises’s Co-Founder and CEO, Hunter Horsley, recently said that cryptocurrencies as an asset class are in their “most viable” state ever. He also added that considering the market conditions, a crypto-linked ETF could be the logical next step.
The truth is that sooner or later there will come a project that will meet SEC’s criteria, and there’s no reason to believe that one of those three propositions currently under review couldn’t be it.
However, this is the game where the strongest are surviving – or at least – most patient ones. In April, SEC has published fresh regulatory guidance for token issuers that took them nearly half a year for making.
At the Consensus 2019 conference in New York, SEC official Valerie Szczepanik said that they could decide to look into US-based crypto exchanges that have carried out initial exchange offerings (IEOs).
According to Szczepanik, exchanges may be operating as unauthorised securities dealers under U.S. securities laws if they take a fee for facilitating token sales, and they’d need to fulfill broker-dealer licencing requirements.