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SEC Delays Decision On Hashdex And Grayscale ETF Applications



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The United States Securities and Exchange Commission has delayed its decision on the Hashdex spot bitcoin ETF application and Grayscale’s Ether futures filing. 

The agency stated in its filing that it would make a decision on the applications by the 1st of January, 2024. 

SEC Decides It Needs More Time 

The United States Securities and Exchange Commission has conveyed that it is delaying a decision on the application by Hashdex to convert its existing bitcoin futures exchange-traded fund (ETF) into a spot vehicle. The agency added that it was also delaying a decision on Grayscale’s attempt to launch a new futures-based Ether ETF. 

Hashdex had filed its application to convert its bitcoin futures ETF into a spot bitcoin ETF back in September. Grayscale, a subsidiary of the Digital Currency Group, had also filed its application for an Ether futures ETF in the same month. Both filings had the same initial deadline of the 17th of November for a decision. However, in response to the September filing by Hashdex, the SEC stated it would take another 45 days to come to a decision on the matter. This put the next deadline on the 1st of January, 2024. 

“The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised therein.”

Hashdex’s attempts to convert an existing Bitcoin ETF into a spot vehicle are unique because the fund manager has proposed holding a mix of Bitcoin futures contracts, spot Bitcoin, and cash to avoid risks arising out of market manipulation. Several other major institutions, such as Fidelity and BlackRock, have also sought approval from the United States Securities and Exchange Commission to launch spot bitcoin ETFs of their own. 

Ethereum Futures ETF Decision Delayed As Well 

The Securities and Exchange Commission used identical language when explaining its decision to delay a ruling on a rule change related to Grayscale’s proposed Ethereum futures ETF in a separate filing. The SEC added that a ruling in this case will also be made on the 1st of January, 2024. Grayscale filed for the ETF shortly after the Securities and Exchange Commission cleared the path for the first Ethereum futures ETF. Additionally, VanEck and ProShares have also launched Ethereum futures-based ETFs. 

Anticipation For A Spot Bitcoin ETF Growing 

The delays from the Securities and Exchange Commission come at a time of heightened anticipation and speculation of a spot bitcoin approval by the regulator. However, the SEC has so far rejected all efforts and applications to list such a product for the general investment community. So far, over a dozen institutions and asset managers have filed applications to launch spot bitcoin ETFs in 2023. Several others have also applied for similar products with exposure to Ether, which is the second largest cryptocurrency after Bitcoin. 

The Securities and Exchange Commission has yet to indicate how it plans to rule on the latest batch of applicants. Previous rejections by the regulator raised concerns about market manipulation and a lack of surveillance-sharing documents. However, the applicants have stated that these concerns have been addressed or are no longer relevant after the approval of bitcoin futures ETFs. This view was echoed by an appeals court as well. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.


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