Reuters reports active SEC talks with Bitcoin-ETF issuers

Negotiations between the SEC and asset managers who filed applications to launch spot Bitcoin-ETF have progressed to the stage of discussing technical details. Reuters reports this.

According to sources familiar with the matter, such details are already being discussed at the final stage before product approval.

Specifically, the SEC is interested in details of the mechanism for storage, creation and redemption of positions, as well as disclosure of risks to investors.

“I anticipate that several ETFs will be approved at once, which will give investors a better opportunity to compare them,” said Morningstar equity analyst Brian Armour.

In July the Commission took up requests to launch spot funds on digital gold from BlackRock, VanEck, Invesco, Fidelity Investments and WisdomTree. Later, joined Franklin Templeton.

On August 31, the regulator delayed decision on several applications at least until mid-October. At the end of September the regulator moved the consideration of the Bitcoin ETF to January 2024.

According to internal memos and Reuters sources, previous meetings were mainly with staff from the SEC’s divisions of trading, markets and corporate finance, and some with staff from the office of the agency’s chairman Gary Gensler.

The frequency of information requests to the SEC has also accelerated: from several months to weekly inquiries.

According to a person familiar with the matter, as discussions progressed, issuers had to update their filings promptly to reflect new details. For example, BlackRock made amendments to its documentation to provide more information about investor-protection measures.

Some sources believe that the wording of the court’s decision in the Grayscale case narrows the grounds on which the SEC could again reject the filings.

PlanB analyst noted that 91% of all bitcoins are in profit.

?91% of all bitcoin in profit

Feels like ETF approval is leaking and SEC insiders are buying. How long will the SEC contain it … pic.twitter.com/SJfbLdboEd

— PlanB (@100trillionUSD) December 6, 2023

“It seems that information about ETF approval has already leaked and insiders are buying. How long will the SEC stay silent?” he speculated.

Earlier the SEC began collecting public feedback on spot Bitcoin ETFs. Lawyer Scott Johnson saw in this a signal that the regulator was ready to approve all applications for the instrument by 10 January 2024.

In November, representatives of the Commission and BlackRock held a meeting, during which they discussed the details of a spot exchange-traded fund based on the first cryptocurrency.

Before that, the regulator met with Grayscale leadership to discuss converting their Bitcoin trust into an ETF.