SEC Conducts Conference Call With All Applicants for Spot Bitcoin ETF: Anticipated Approval by January 10th, 2024
The U.S. Securities and Exchange Commission (SEC) has reportedly held a series of targeted conference calls with all filers of spot Bitcoin Exchange-Traded Funds (ETFs). These engagements, considered rare in regulatory actions, aimed to persuade issuers to modify their Bitcoin ETF redemption models.
Fox Business Network’s Senior Correspondent, Charles Gasparino, described the SEC’s conference calls as a unique occurrence. The main objective of these discussions was to convince issuers to change their Bitcoin ETF redemption models.
During these meetings, the SEC placed particular emphasis on the “cash creates” model, as highlighted by Fox Business Network journalist Eleanor Terrett. This model requires issuers to eliminate the option of “in-kind redemptions” in their filings, meaning they must convert Bitcoin to cash before trading ETF shares. This approach aligns with the SEC’s policy of disallowing broker-dealers from directly engaging in Bitcoin trading. By insisting on cash conversions, the SEC aims to mitigate the risks associated with direct Bitcoin transactions, especially if it approves these ETFs.
Contrary to earlier reports of a joint conference, Bloomberg’s senior analyst, Eric Balchunas, clarified that these were separate calls to exchanges and issuers, specifically focused on the “cash creates” model. There are indications that the SEC may be encouraging issuers to adopt a stricter model, possibly the Prime Execution Agent model, where a third party oversees Bitcoin transactions for the ETF.
The SEC’s decision on multiple ETF filings is expected by January 10. The emphasis on the Prime Execution Agent model has become a central topic of discussion. Issuers like BlackRock may need to revise their filings to comply with these new guidelines. This regulatory action indicates the SEC’s shift towards a more interactive and cautious approach to cryptocurrencies.
As the situation unfolds, the implications for retail investors and the broader cryptocurrency market remain significant. Coinpedia will continue to provide the latest updates on this developing story.