Bitcoin ETF Gains Some Hope as SEC Extends Deadline for Decision

The United States Securities and Exchanges Commission (SEC) has extended the deadline for a decision involving 9 previously rejected Bitcoin ETF proposals, requesting public comments and proposing a change to rules. The involved parties can now file statements by October 26, as can the general public. The decision will now factor in this new information.

3 new filings were published, one each for GraniteShares, ProShares and Direxion, with Assistant Secretary Eduardo J. Aleman saying:

Accordingly, IT IS ORDERED, pursuant to Commission Rule of Practice 431, that by November 5, 2018, any party or other person may file a statement in support of, or in opposition to, the action made pursuant to delegated authority.

CBOE also filed amendments to its original proposal, as described in the report:

On August 21, 2018, CboeBZX filed Amendment No. 1 to the proposed rule change, stating that it was amending and replacing in its entirety the proposal as originally filed on January 5, 2018. On August 22, 2018, CboeBZX filed Amendment No. 2 to the proposed rule change, stating that it was amending and replacing in its entirety Amendment No. 1 to the proposed rule change.

In August, the SEC rejected 9 Bitcoin ETF proposals, submitted by 3 separate entities: ProShares, GraniteShares and Direxion, executed in cooperation with CBOE and NYSE Arca. The stated reason for the rejection of the proposals was that the market contained too much risk and was prone to manipulation.

The decision dampened investor confidence, which has long been wanting a formal acceptance of cryptocurrency.

However, the regulatory body stressed that it was not a final decision. The conclusion was made by junior staff members to whom the work had been delegated, but senior officials soothed doubts by saying that the decision would be reviewed just a day later.

Bitcoin ETFs are seen as an investment vehicle that can open up the market to a greater swathe of the population, who would have a more accessible and convenient way of investing in Bitcoin. It would also be seen as a nod of approval from financial regulators, which the uncertain cryptocurrency market, for the most part mired in regulatory uncertainty, would benefit greatly from.

The SEC has ramped up its examination of the cryptocurrency market in recent months, suspending trading of 2 Bitcoin and Ethereum products, because they were incorrectly labelled as ETFs, and filing charges against an international securities dealer that allowed security-based swaps to be funded in Bitcoin.

Analysts have warned that the U.S. needs to take the initiative in regulation or risk being left behind. One former SEC member said that XRP was a currency, while pointing out regulatory uncertainty. Meanwhile, security tokens continue to move forward with operations.

Related: “Cryptocurrencies Are Here to Stay,” Says CFTC Chairman Christopher Giancarlo