SEC Delays Decision on Spot Bitcoin ETFs for BlackRock

• The US SEC has delayed its decision on the Bitcoin ETF application from BlackRock, Invesco, others.
• With looming government shutdown, timeline for the approval is now prolonged.

One more time, the United States Securities and Exchange Commission (SEC) has moved to delay a decision on the spot Bitcoin (BTC) Exchange Traded Fund (ETF) applications made by BlackRock, Invesco, Valkyrie, and Bitwise in separate filings. 

No official announcement has been made concerning Fidelity, VanEck, and WisdomTree but Bloomberg ETF analyst James Seyffart expects that they would also suffer the same fate. This comes amid serious speculations about the potential government shutdown that is looming in the United States. 

At the beginning of September, Fox Business journalist Eleanor Terrett highlighted the possibility of the SEC to defer its decision on multiple pending Bitcoin ETF applications just when the first deadline was approaching. Before now, the first deadline for either approval or rejection of most ETF applications was pushed to mid-October, and with the latest delays, market observers might not be seeing a new decision by mid-November, corresponding to the second deadline to watch out for now.

The third deadline date for the aforementioned firms is around mid-January and there is every possibility that it could also be moved forward. However, the regulator would be required to have made a final decision by mid-March irrespective of the maneuvers it makes until then. 

Markedly, the crypto industry watchers are on the lookout for a potential winner in the race to float a spot Bitcoin ETF product in the US and as such, garner the highly coveted first-mover advantage. 

U.S. Government Shutdown to Disable Activities 

The possibility of the U.S. government shutdown has been making rounds and is expected to happen on October 1 if a temporary funding Bill is not passed before the start of the next fiscal year. Like many other agencies in the US, the SEC might be impacted negatively by the shutdown. Gary Gensler, the SEC Chair claimed that his agency will be reduced to a “skeletal” staff, hence the commission may not have the appropriate oversight on the market as it used to while the shutdown is in effect.

Unfortunately, this means that the commission will not be able to process the filings of companies that intend to go public, it would also stop processing the filings for a spot BTC ETF product as well as other statutory market applications. In the end, the regulator would be left with a lot of financial and operational backlog. 

At the same time, it is worth noting that the decision to further delay its decision on the basis of the U.S. government shutdown may be perceived by many netizens as another excuse from the SEC. The regulator has not granted approval for any spot BTC ETF application before now. It has always cited several excuses including market manipulation, fraud, scams, and many other reasons for its rejections. Now, a government shutdown is poised to be its ultimate excuse.

Meanwhile, the two Chambers of Congress are yet to decide on various funding bills to finance government operations in the meantime. Also, Congress needs to submit a total of 12 separate full-year funding bills by October 1 to avoid a shutdown and send a pseudo-relief to the crypto industry.

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