In a significant advancement for the crypto industry, several spot crypto ETF applications have been published in the Federal Register, thereby progressing the approval process of the United States Securities and Exchange Commission (SEC). The applications are presented by several key players including BlackRock, Fidelity, Invesco Galaxy, VanEck, and WisdomTree.
By publishing these applications, the SEC is given a timeframe to either approve or reject the request, lengthen the existing period, or consider the application for public commentary. Interestingly, this latest development comes as a sequence of actions that commenced with the presentation of applications in June. As an intriguing move, the applications were then amended naming Coinbase, a popular crypto firm, as a surveillance-sharing partner. Relations in the crypto sphere indicated that the SEC found the initial applications non-comprehensive.
Despite the initial timeframe of 45 days for the SEC to reach a decision, the commission also holds the power to stretch the timeline for up to 240 days, pushing a final decision to March 2024. While this long road to approval presents some uncertainty for the involved firms, it also sparks a glimmer of hope for the broader crypto industry.
At present, the SEC has not yet permitted a direct exposure spot investment tool for cryptocurrencies like BTC. However, ETFs linked to BTC futures have been getting approvals since 2021. This announcement could potentially inch us closer to a future where such crypto vehicles are commonplace.
Notably, though, the SEC has faced intense scrutiny from fellow regulatory bodies, lawmakers, and the public due to its controversial regulatory approach. For instance, a federal court ruling proposed that the XRP token was not a security, while the SEC’s Chair, Gary Gensler, has been facing criticism for regulation by implementing enforcement actions. Crypto exchanges like Binance and Coinbase have also been embroiled in legal battles with the SEC.
Thus, while the move to publish these applications constitutes notable progress, it also underscores the regulatory minefield that the cryptocurrency industry needs to tread carefully. On the one hand, the long-awaited incorporation of crypto investment vehicles into mainstream financial products opens the door for broader adoption and investment. On the other hand, the extended review period and the volatile regulatory terrain heightens uncertainty and could pose a serious impediment to the innovation and maturation of the crypto market.
Source: Cointelegraph
