The US Securities and Exchange Commission (SEC) has postponed its decision on the WisdomTree application for the launch of an exchange-traded fund (ETF) on Bitcoin until the fall and requested expert comment.
This week, the SEC solicited public and industry commentary on WisdomTree’s application to launch a Bitcoin ETF. Comments must be submitted within three weeks of the publication of the document in the Federal Register.
In the decision to extend the deadline for the application, the SEC raised questions about whether the ETF would be “subject to manipulation” and how the proposed product could be protected from fraud. The regulator is also concerned about whether the CME Bitcoin futures market is large enough to avoid manipulation.
The SEC is currently reviewing more than ten applications to launch Bitcoin ETFs. Several industry participants, including WisdomTree, have also applied to launch ETFs on Ether and BTC futures. Unlike Canada, the US has yet to approve a Bitcoin ETF launch, although proponents of the proposals argue that it will help create a more regulated market.
The SEC usually defers decisions on Bitcoin ETF applications until the maximum legal deadline. The Commission recently extended the deadline for consideration of SkyBridge Capital’s application to launch a Bitcoin ETF – a decision will be made in August.
Bitcoin ETF will expand access to cryptocurrency markets. Since ETFs are regulated, some fund managers, financial institutions or even retail investors will be able to buy ETF shares and not participate in BTC trading directly.
However, it is not yet clear when the US regulator will approve the launch of such an exchange-traded fund. SEC Chairman Gary Gensler has previously expressed concerns about manipulation and fraud in the BTC market, as well as investor protection concerns. The agency has frequently cited market manipulation as a key issue in rejecting past applications to launch Bitcoin ETFs.
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