US SEC Sets Deadline For Spot Bitcoin ETF Applicants

Applicants for a spot Bitcoin exchange-traded fund (ETF) have just a few days to make final changes to their filings to meet a looming deadline set by the US Securities and Exchange Commission (SEC). 

The regulator has set a deadline for spot BTC ETF applicants to file final S-1 amendments by December. 29, Reuters reported Dec. 23, citing people familiar with the discussions. Officials from the SEC met on Dec. 21 with representatives of at least seven companies seeking to launch spot Bitcoin ETFs, as per the report. 

Notable participants in these discussions included representatives from Grayscale Investments, BlackRock, ARK Investments, and 21 Shares. The meetings also reportedly included representatives from exchanges that would potentially list the new products, including the Chicago Board Options Exchange and Nasdaq, as well as attorneys representing the applicants.

The SEC told attendees at the meetings that any applicant who doesn’t meet the Dec. 29 deadline will not be included in the initial wave of potential approvals in early January. The final submissions from the companies are expected to address comprehensive details, fee structures, including technical specifications, and initial funding strategies for these ETFs. 

Following their discussions, companies such as Bitwise and BlackRock have adjusted and submitted their S-1 application form to the agency’s requirements on December 4. 

SEC Stance On ‘In-Kind’ Creation Model

Eleanor Terrett, a Fox Business journalist, was among the first to report on the deadline. Terrett later confirmed that the date for final amendments to all S-1s is December 29. She emphasized that the filings that mention in-kind creation will be rejected. In-kind creation enables individuals to redeem ETF shares for real Bitcoin instead of cash, offering direct exposure to cryptocurrencies without custody.

Confirming the date for final amendments to all S-1s by Friday the 29th. The @SECGov has told issuers that applications that are fully finished and filed by Friday will be considered in the first wave. Anyone who is not will not be considered. In addition, the filings cannot… https://t.co/syyINu1BEI

— Eleanor Terrett (@EleanorTerrett) December 24, 2023

BlackRock had previously indicated a strong preference for the in-kind creation structure. However, the SEC is not complying with their preference. The regulator doesn’t want broker-dealers to deal with cryptocurrencies directly. Many spot BTC ETF issuers have been rushing to update their S-1 filings with the cash redemption model. 

The SEC’s deadline for amending spot ETFs indicates its careful approach to digital assets. The crypto community eagerly awaits the SEC’s decisions in early January, which could potentially herald a new era in the global financial system.