Applicants for a spot Bitcoin exchange-traded fund (ETF) are facing a critical deadline set by the United States Securities and Exchange Commission (SEC). According to a Reuters report, citing public memos and sources familiar with the matter, the SEC has mandated that final S-1 amendments for spot Bitcoin ETFs must be filed by December 29.
Key Developments in the Spot Bitcoin ETF Filings
SEC’s Firm Deadline: The SEC’s deadline for final amendments to S-1 filings is rapidly approaching, with a cut-off date set for December 29. This deadline is crucial for applicants aiming to be part of the initial approvals.
High-Profile Meetings: On December 21, SEC officials convened with representatives from at least seven firms aspiring to launch spot Bitcoin ETFs in early 2024. Notable attendees included representatives from BlackRock, Grayscale Investments, ARK Invest, and 21 Shares.
Involvement of Major Exchanges: The meetings also involved representatives from potential listing exchanges like Nasdaq and the Chicago Board Options Exchange, alongside lawyers and issuers.
Implications of the SEC Deadline
First Wave of Approvals: The SEC has reportedly informed attendees that only issuers meeting the December 29 deadline will be considered for the first wave of potential spot Bitcoin ETF approvals, which is expected in early January.
Reporting by Fox Business Journalist: Eleanor Terrett, a journalist with Fox Business, was among the first to report this deadline. She confirmed the final amendment date and noted that the SEC would prioritize applications completed and filed by this Friday.
Specific Requirements and Challenges
Rejection of In-Kind Creation Filings: The SEC has indicated that filings mentioning in-kind creation, which involves non-monetary payments like Bitcoin, will be rejected.
Shift to Cash Redemption Model: In response, multiple spot Bitcoin ETF filers have been updating their S-1 filings to adopt a cash redemption model, moving away from in-kind redemptions.
Requirement for Authorized Participants (AP): The SEC also expects Bitcoin ETF filers to name their authorized participants in the filings. According to Bloomberg ETF analyst Eric Balchunas, securing an AP agreement is a significant hurdle for approval.
Current Status of Filings: As of December 22, none of the filers had an AP agreement in place. However, seven firms have already switched their redemption model to cash.
Outlook and Expectations
Despite the rush for last-minute updates, Bloomberg analysts remain confident that the SEC will approve the first spot Bitcoin ETFs by January 10. This development marks a significant moment in the cryptocurrency market, potentially paving the way for greater mainstream adoption and investment in Bitcoin.
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