Hong Kong’s Securities and Futures Commission (SFC) has published a list of two licensed crypto trading platforms and 17 pending applicants under the new regulations that went into effect on June 1. The financial regulator stresses that operating without a license is a criminal offense and commits to taking appropriate actions against any legal breaches. […]
Bitcoin News
10 Spot Bitcoin ETF Applicants Submit Final Amendments With SEC
Ten spot bitcoin exchange-traded fund (ETF) applicants have filed their final amended registration statements with the U.S. Securities and Exchange Commission (SEC). The amended filings reveal a fierce fee war among spot bitcoin ETF issuers. Grayscale charges the highest fee of 1.5% while Bitwise undercuts rivals with the lowest fee of 0.24%, applicable after a six-month fee waiver. Blackrock, the world’s largest asset manager, will charge 0.20% for the first 12 months and billion, rising to 0.30% thereafter.
Spot Bitcoin ETFs Get Closer to Approval
Ten final amended registration statements for spot bitcoin exchange-traded funds (ETFs) flooded the U.S. Securities and Exchange Commission (SEC) by Monday’s 8 a.m. deadline. Bloomberg analyst James Seyffart shared on social media platform X Monday morning an updated list of spot bitcoin ETF issuers that have submitted their amended S-1 filings (S-3 for Grayscale’s spot bitcoin ETF conversion) with the SEC by the deadline.
The amended filings have revealed a fee war among spot bitcoin ETF issuers. Crypto asset manager Grayscale Investments has set the highest fee of 1.5% while Bitwise offers the lowest fee of 0.24% with a fee waiver for 6 months on the first billion of trust assets.
The Ark Invest/21shares‘ spot bitcoin ETF offers the second-lowest fee of 0.25% with a fee waiver for the first six months or billion. Vaneck also offers a fee of 0.25% but without a waiver. Blackrock, the world’s largest asset manager, offers 0.20% for the first 12 months and billion, with the fee rising to 0.30% thereafter. Meanwhile, Franklin Templeton offers 0.29%, Fidelity 0.39%, and Wisdomtree 0.5%.
Hashdex did not file an amendment on Monday morning. However, Seyffart pointed out that “they are different from the rest of the pack solely because they’re the only product on this list that is already operating as an ETF.” Fox Business journalist Eleanor Terrett added that Hashdex is “the only one trying to convert their existing BTC futures ETF to a spot product,” noting: “As a result, the timings of its filings may also be slightly different but this doesn’t necessarily mean they won’t get approved if and when the others do.”
Commenting on spot bitcoin ETF fees, Vaneck’s director of digital assets strategy, Gabor Gurbacs, detailed: “It costs less to hold a bitcoin ETF for a year than a single trade on Coinbase. (~40-60bps vs ~25bps for a retail size trade).” He added: “The profits will be so razor-thin (even at $ multi-billion AUM) that a flee can barely make a sandwich from it, precisely due to storage and execution costs as you said. In my opinion, this is long term not a great incentive structure.”
Moreover, all 10 applicants have named authorized participants (APs) for their spot bitcoin ETFs. “The firms acting as APs for these ETFs are Jane Street, Virtu, JP Morgan, ABN AMRO, Macquarie, Cantor Fitzgerald, and Marex Capital,” the Bloomberg analyst noted. In its fourth amended filing, Grayscale finally named some authorized participants. The asset manager said it has “engaged Jane Street Capital, LLC, Virtu Americas LLC, Macquarie Capital (USA) Inc., and ABN AMRO Clearing USA LLC as authorized participants.”
The SEC is expected to make a decision on spot bitcoin ETFs by Wednesday, which is the deadline for the joint proposal by Cathie Wood’s Ark Invest and 21shares. While some believe that the securities regulator could make an announcement before that date, Blackrock expects its Ishares Bitcoin Trust to be approved on Wednesday. The world’s largest asset manager has reportedly lined up more than billion for its spot bitcoin ETF launch.
How many spot bitcoin ETFs do you think the SEC will approve this week? Let us know in the comments section below.
Spot Bitcoin ETF Applicants Flood SEC With Filing Updates Before Deadline
Major asset managers, including Blackrock, Fidelity, Bitwise, and Wisdomtree, submitted their revised spot bitcoin exchange-traded fund (ETF) filings shortly before the deadline set by the U.S. Securities and Exchange Commission (SEC) on Friday afternoon. The securities regulator reportedly wants authorized participants named in the filings.
The Race Is on for Spot Bitcoin ETFs
Spot bitcoin exchange-traded fund (ETF) applicants rushed to meet the U.S. Securities and Exchange Commission (SEC)’s deadline for registration statement (S-1) updates on Friday. The securities regulator reportedly told them to update their filings by Friday to be included in the first wave of spot bitcoin ETF decisions in early January.
Major asset managers, including Blackrock, Vaneck, Valkyrie, Bitwise, Invesco/Galaxy, Fidelity, Wisdomtree, and the Ark Investments and 21shares joint filing, submitted updated documents to the securities regulator Friday afternoon. According to reports, the SEC wants authorized participants (APs) — financial institutions that dynamically manage the creation and redemption of ETF shares in the primary market — named in amended spot bitcoin ETF filings.
Bloomberg ETF analyst Eric Balchunas wrote on social media platform X Friday:
Blackrock just dropped its updated S-1 and it DOES name the APs: Jane Street and JPMorgan … Looks we have our first horse that at the starting gate.
The analyst added: “Just to be clear: the AP names weren’t due in S-1s, so Blackrock adding them in there is a bit of a flex in that regard. So if we see other S-1s not naming AP doesn’t mean they don’t have one lined up. But this does make Blackrock the first horse officially ready imo.”
Valkyrie named two authorized participants, Jane Street and Cantor Fitzgerald, in its fresh filing with the SEC. “They join Blackrock as the two horses officially at [the] starting gate,” Balchunas described, noting that Bitwise did not name an AP in its amended filing.
The Bloomberg analyst continued, “Fidelity’s S-1 filing included its fee which will be 0.39%,” emphasizing that currently, this fee is “by far” the lowest. The financial services giant named Jane Street as its spot bitcoin ETF’s authorized participant.
Wisdomtree also named Jane Street as its spot bitcoin ETF’s AP. “Another horse makes it to [the] starting gate,” Balchunas noted, adding:
Invesco/Galaxy is in and here’s a whopper: it will be waiving fee for first six months AND for first b in assets, APs named as well, Virtu and JPMorgan … Another horse in.
The analyst clarified: “What makes this AP thing tricky — and could keep some from starting gate — is not only does SEC want the AP named in docs but it wants them to be the underwriter of the ETF too, which may make them nervous re lawsuits/risk given how brand new the asset class is.”
What do you think about the spot bitcoin ETF race? Do you think the SEC will approve all applications in early January? Let us know in the comments section below.
SEC Sets Deadline for Spot Bitcoin ETF Applicants — 3 Days Left to Update Filings for Early January Decision
The U.S. Securities and Exchange Commission (SEC) has reportedly set a deadline of Dec. 29 for spot bitcoin ETF applicants to finalize their filing amendments. According to reports, the SEC has told spot bitcoin ETF issuers that applications that are fully updated and filed by this Friday will be considered in the first wave of its spot bitcoin ETF decision.
SEC’s Spot Bitcoin ETF Deadline
The U.S. Securities and Exchange Commission (SEC) reportedly instructed spot bitcoin exchange-traded fund (ETF) applicants during their meetings last week to finalize the amendments to their registration statements (S-1s) by Dec. 29 to be considered in the first wave of spot bitcoin ETF decision.
Fox Business journalist Eleanor Terrett shared on social media platform X on Dec. 24:
Confirming the date for final amendments to all S-1s by Friday the 29th. The SEC 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.
Moreover, she noted that the SEC has emphasized to the applicants that their spot bitcoin ETF filings cannot mention the in-kind creation method or the applications will not be considered. The regulator has pushed for the use of the cash creation method. “The filings cannot mention in-kind creation or they will be rejected,” Terrett wrote.
Blackrock, the world’s largest asset manager, and several other spot bitcoin ETF applications have argued for the use of the in-kind model. However, failing to convince the SEC with its revised in-kind model, Blackrock adopted the cash creation model in its latest amendment.
SEC officials held meetings last Thursday with representatives from at least seven companies seeking to launch a spot bitcoin ETF early next year, Reuters reported, citing public memos and insiders. Key participants in these discussions included Blackrock, Grayscale Investments, ARK Invest, and 21shares, the news outlet conveyed, adding that the meetings also included representatives from exchanges where the spot bitcoin ETFs could be traded, such as Nasdaq and Cboe.
Executives from two companies who engaged with the SEC on Thursday told the publication that the regulator suggested during the meeting that approval for the proposed ETFs could come in the first few business days of 2024. They noted that the issuers would be directly notified of the effective date for their ETF launch requests. The first deadline for a spot bitcoin ETF decision next year is Jan. 10 for a joint spot bitcoin ETF proposal from Ark and 21shares.
There are currently 13 spot bitcoin ETF applications pending at the SEC. Many expect the regulator to approve multiple spot bitcoin ETFs at once. Blackrock recently revealed its plan to seed its spot bitcoin ETF with million on Jan. 3. Former SEC internet enforcement chief John Reed Stark said approving spot bitcoin ETFs could be SEC Chair Gary Gensler’s legacy. Gensler issued a warning about investing in crypto last week amid soaring anticipation of spot bitcoin ETF approval.
What do you think about the SEC setting Dec. 29 as the deadline for spot bitcoin ETF applicants? Do you think the regulator is preparing to approve multiple spot bitcoin ETFs in early January? Let us know in the comments section below.
SEC Makes ‘Rare’ Calls to Spot Bitcoin ETF Applicants — Analyst Says ‘Good Sign’ for January 10 Approval
The U.S. Securities and Exchange Commission (SEC) has reportedly made “rare” calls to spot bitcoin exchange-traded fund (ETF) issuers and exchanges regarding their applications. A Bloomberg ETF analyst views this development as a “good sign” for the expected approvals by Jan. 10. The securities regulator has insisted on the cash creation model, rather than the in-kind model, for spot bitcoin ETFs.
SEC’s ‘Rare’ Calls Regarding Spot Bitcoin ETFs
The U.S. Securities and Exchange Commission (SEC) actively held meetings with spot bitcoin exchange-traded fund (ETF) applicants this week. Blackrock, the world’s largest asset manager, and several other spot bitcoin ETF applicants met with the securities watchdog on Thursday, according to filings with the SEC.
Moreover, Fox Business Network’s senior correspondent, Charles Gasparino, shared on social media platform X Thursday that the SEC is “having what’s described as a rare joint conference call with prospective spot BTC ETF filers, as its closely watched decision looms on whether to give these companies the green light to sell to small investors access to crypto.” Fox Business reported a day prior that “the decision is coming by Jan 10.”
Referencing this “rare joint conference,” Bloomberg ETF analyst Eric Balchunas stated on X:
We [are] hearing it wasn’t one giant conf call b/t SEC and every issuer but rather many calls to exchanges/issuers to reiterate that its cash creates or you will wait.
The analyst views this development as interesting and a “good sign” for the expected spot bitcoin ETF approvals by Jan. 10. He has maintained that there is a 90% chance of approval by that date.
While many spot bitcoin ETF issuers prefer to use the in-kind creation model, the SEC prefers the cash creation model. Blackrock, the world’s largest asset manager, recently amended its spot bitcoin ETF filing to adopt the cash creation model.
Balchunas detailed on Wednesday, referencing Gasparino: “SEC worried about money laundering via in-kind creations in a spot bitcoin ETF, this is why they so dug in on cash creates only (which is a much more closed system).” The Fox Business correspondent shared on X: “Firms believe the SEC will rule after Jan 8; they feel confident the SEC will approve but with a twist; unlike normal ETFs, you can only purchase shares with cash; SEC worried about ETFs being used as a vehicle for money laundering.”
Another Bloomberg analyst, James Seyffart, wrote on X:
We still think this is happening by Jan 10. Some issuers may be left behind … base case I’m expecting approvals Jan 8-10.
What do you think about the SEC making rare calls to spot bitcoin ETF applicants? Do you think the regulator will approve these filings by Jan. 10? Let us know in the comments section below.
Bitcoin Spot ETF Applicants To Integrate Mandatory Cash Redemption Model
Recent reports have revealed that the United States Securities and Exchange Commission (SEC) has implemented a “new regulatory standard” for all Bitcoin Spot Exchange-Traded Fund (ETF) applicants while awaiting approval from the regulatory body.
Cash Redemption Model For Bitcoin ETF Applicants
Top Bloomberg Analyst James Seyffart took to X (formerly Twitter) to share the latest update by the regulatory watchdog. According to him, every Bitcoin Spot ETF applicant will have to bend their knees to this new model.
The SEC’s latest “Cash Redemption Model” came amid the spot Bitcoin ETF issuers ironing their filings with the US regulator. It seems that the SEC is unwavering in its demand, rather than approve the different model that other issuers have suggested.
The model enables authorized participants to deposit funds in the ETF equal to the net asset value of the creation units to be created. The underlying assets, which in this case is Bitcoin, are subsequently purchased by the fund using this money.
Seyffart’s X post was accompanied by another post from financial lawyer Scott Johnsson, who initially shared the update. The financial lawyer shared a screenshot which revealed more details about the new model by the regulatory body.
Johnsson asserted that Invesco is the most recent company to adopt the cash creation and redemption standard for its ETF. The trust anticipates that “creation and redemption transactions will be made in cash at first.”
However, in the future, the Trust may permit/require creation and redemption transactions to be carried out with the “in-kind” model. This is the initial model that several ETF applicants have suggested.
For the in-kind model, the participant deposits a collection of securities that are weighted and composed in accordance with the ETF’s portfolio. This will allow investors to receive creation units from the fund without having to sell the securities for cash instantly.
Bloomberg Senior ETF analyst, Eric Balchunas has also confirmed Invesco’s adoption of the latest cash model. The analyst asserted that the firm is embracing the initiative as per its just updated S-1 filing.
Blackrock’s In-Kind Redemption Model
Blackrock recently adjusted its Spot Bitcoin Exchange-Traded Fund (ETF) application introducing an in-kind redemption model called “Prepay.” This is to tackle the restrictions that financial firms are facing in order to hold cryptocurrencies.
The adjustment aims to make it easier for Wall Street Banks to participate in the fund. With this modification, authorized participants (APs) would be allowed to issue new fund shares using cash instead of just Bitcoin.
The funds that the APs use for this procedure can subsequently be converted into Bitcoin through an intermediary and kept in storage by the ETF’s custody provider. As a result of this, it provides access to banks that are unable to store cryptocurrencies directly.
So far, Blackrock believes the model will offer greater protection against market manipulation, which has since been the major reason behind the SEC’s rejection of an ETF.
SEC Commissioner: Bitcoin ETF Applicants Should Focus on Liquidity, Custody, Market Surveillance
Even amid bearish market conditions, the regulatory status of crypto assets remains a hot-button topic, as global governments attempt to discern how to best approach this emerging market.
Leading the charge for fair regulation is arguably the U.S. Securities and Exchange Commission (SEC), which has done its best to protect investors from unwarranted financial risk, while still treating this industry with respect.
SEC Commissioner Stein Talks Crypto
American attorney Kara Stein, who currently serves as an SEC Commissioner, recently sat down with Bloomberg to discuss the regulatory climate surrounding cryptocurrencies.
SEC Commissioner Stein on Corporate Earnings Reports, Crypto Fund Proposals https://t.co/4hi7A4PNBc pic.twitter.com/DLMS0lKhiG
— Bloomberg Australia (@BloombergAU) October 22, 2018
Bringing up the age-old debate of whether Bitcoin should be classified as a non-correlated asset, legitimate currency, commodity, or security, the Bloomberg host questioned the regulator what the SEC classifies the digital asset as. Approaching how she responded with caution by not giving any conclusive answers, Stein stated:
“Well, we [at the SEC] determine whether it is a security or not and leave whether it’s a currency or not to others… But I think it depends on the form of the product that is being presented because Bitcoin can be, as you already know, backed by blockchain technologies. So I see many folks in the market thinking through how they can use blockchain to make what they do better.”
What Stein seems to be referring to is although Bitcoin has been classified as a non-security on a majority of occasions, some vehicles that involve the cryptocurrency have been labeled securities. Most recently, as reported by NewsBTC, the SEC, coupled with enforcement efforts from the CFTC and FBI, resulted in the shut down of 1Broker, who was reportedly offering “security-based swaps funded with Bitcoins.”
While this by no means indicates that the cryptocurrency is a security, the unfortunate case of 1Broker’s temporary demise reminds startups that the use of Bitcoin for investment products isn’t a get-out-of-jail-free card.
Although Stein made no mention of Ethereum or its regulatory status, which is widely regarded as “up in the air,” it can be assumed that her comments regarding how the status of Bitcoin differs from case-to-case and product-to-product can be logically applied to Ether.
The Bloomberg host went on to ask the question that has been on the minds of cryptocurrency enthusiasts worldwide — is a Bitcoin — or crypto-backed exchange-traded fund (ETF) in the cards?
Again, as if she was walking on hot coals, the Commissioner responded with caution, noting that she doesn’t know the answer to that question as it depends on the “facts and circumstances” of an ETF application. This vague answer prompted the Bloomberg anchor to make another query, asking what concerns the SEC has with a Bitcoin-centric ETF.
Exuding more confidence this time around, the attorney noted:
“At the end of the day, whatever fund presents a concept to us will have to show how they can get accurate valuations, how they make sure that there is physical custody, and how to make sure that there is adequate liquidity, especially in a 40 act fund context, where investors can get the money when they need their money. So we will look at all of those factors and make a decision based on that particular fund and how it will be able to handle those particular requirements.”
Interestingly enough, Stein’s comments mirror the qualms brought up in the SEC’s recent rejection of a handful of crypto-backed ETFs. However, these regulatory issues are rapidly getting resolved. In terms of custody, Fidelity’s recently-launched subsidiary, Fidelity Digital Asset Services, will offer a valued cold storage custody solution, which may satisfy the SEC’s standards.
On the liquidity side of things, many, including NewsBTC’s Joseph Young, have claimed that the arrival of Bakkt’s physically-backed BTC futures in December will facilitate a surge in liquidity, likely quenching the SEC’s thirst for “markets of sufficient size.”
Although the regulator’s concern regarding accurate valuations has yet to be meaningfully addressed by innovators within the cryptosphere, it is apparent that moves are being made to satisfy the SEC’s agenda, which may catalyze the regulator to finally green light a crypto-backed ETF.
Featured image from Shutterstock.
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Abra CEO SEC Denies Bitcoin ETFs Because Applicants Do Not Fit Industry Archetype
n Abra CEO Bill Barhydt suggested that the SEC has denied crypto ETFs because people who are doing the applications don’t fit mold of who the SEC is used to approvingn
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Abra CEO: Bitcoin ETF Applicants Don’t Fit the Mold for the SEC
Abra’s CEO is expressing confidence that the U.S. Securities and Exchange Commission (SEC) will approve the first Bitcoin ETF later this year.
In the past few months, news regarding the approval and denial of Bitcoin ETFs have dominated the cryptocurrency community’s discussions, and many people see the potential approval of the CBOE VanEck/SolidX Bitcoin ETF as the next major catalyst for a Bitcoin bull run.
Bill Barhydt, the CEO of Bitcoin payment processor, Abra, explained to CNBC that the SEC has been slow to approve any Bitcoin ETFs due to the applications not fitting the financial model that the SEC is used to.
While speaking to the hosts of CNBC’s “Squawk Box Europe,” Barhydt explained his views:
“I think the issue with the SEC, quite frankly, is that the people who are doing the applications don’t fit mold of who the SEC is used to approving…I used to work for Goldman Sachs, but if you look at how I’m dressed you probably wouldn’t know it. So I probably, unfortunately, couldn’t go like I am here to a meeting at the SEC to say I’m applying for the ability to issue an ETF.”
SEC Discerning on Which Bitcoin ETF to Approve
The SEC has yet to show any signs of approving a Bitcoin ETF, first declining the reapplication for the Winklevoss Bitcoin ETF and since declining several other Bitcoin ETFs. The CBOE VanEck/SolidX ETF is the most anticipated one, as many analysts see it as the most likely to be approved.
The markets saw a rapid downturn following news that the SEC was postponing their decision on the VanEck/SolidX ETF until later this month, signaling that regulators need more time to reach a conclusive decision. Many cryptocurrency advocates believe that the approval of a Bitcoin ETF will lead to unprecedented institutional investments, which could lead to a major rally.
While speaking about which ETF application will be approved, Barhydt explained that it will take an applicant that “looks, feels, and smells” the way the SEC wants them to. He added that a reputable, trusted, financial institution will likely be the first to garner the SEC’s blessing.
Recently, CBOE’s president and CEO, Chris Concannon, expressed that he is convinced that their application will receive approval, adding that the SEC may need to alter their rules and expectations before approving any applications.
While speaking to Bloomberg last month, Concannon said:
“As we chip away at their issues to make them less concerned, at some point they’ll be comfortable with an ETF… Having the underlying futures come to market first, prior to an ETF, I think you have a healthier, more mature market. The problem with a futures-based ETF is, what is the right level of liquidity? It’s never been tested before.”
Abra’s Barhydt importantly noted that he would “bet” that the first Bitcoin ETF will receive approval within the next year. He said, “it’s going to happen in the next year, I would actually make a bet on it. There is too much demand for it.”
Featured image from Shutterstock.
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