BlackRock’s Bitcoin ETF Application Accepted by SEC for Review

Rejoicing the community, the U.S. SEC accepted BlackRock’s proposal for Bitcoin ETF for review; a lengthy regulatory exercise awaits. Finally, the financial watchdog of the United States, the Securities and Exchange Commission (SEC), accepted the application from the world’s most prominent asset management firm on July 13, 2023. This follows the acknowledgment of a similar application by Bitwise a day before. 

BlackRock’s Bitcoin ETF Application Added to Official SEC Docket

The acknowledgment by the SEC indicates the inception of the Official review process of the Bitcoin ETF application. Experts suggest a lengthy regulatory journey is ahead of the application before it enters the market. Moreover, this acceptance indicates the agency’s willingness to explore the spot BTC ETF scenario and its potential effect on the market. 

As per the data officially published in the SEC’s Nasdaq Stock Market LLC (NASDAQ) Rulemaking, on July 13, 2023, they issued a notice of a proposed rule change to list and trade the shares of the iShare Bitcoin Trust. This would be done under the Nasdaq Rule 5711(d) and Commodity-Based Trust Shares. The comments on the rulemaking shall be accepted until 21 days after the date of publication. 

Exchange Traded Funds (ETFs) are generally investment funds and typically follow specific indexes, and are traded on exchanges. Considering cryptocurrencies, it shall be a fund that mimics the value of one or multiple digital tokens. It could also comprise numerous cryptocurrencies and shall be known as cryptocurrency ETF. 

On July 14, 2023, the SEC announced that it was reviewing the applications of other ETF applicants, including Wise Origin Bitcoin Trust, VanEck, Wisdom Tree, and Invesco Galaxy. 

What Does BlackRock’s Entry into Crypto Mean?

Interestingly the world’s biggest asset manager, BlackRock, shocked the world of cryptocurrency by applying iShare Bitcoin ETF on June 15, 2023. The timing was crucial as the industry has been facing a regulatory crackdown from the agency, which surged 183% after the FTX-saga. Also, they had sued the world’s biggest crypto exchange and Coinbase for unregistered securities. 

SEC might agree to the iShare BTC ETF if the Survelliance-Sharing Agreement (SSA) and the information-sharing deal are taken care of. This arrangement shall provide the regulator with more power. The agency argues that the structures are kept to circumvent the ill practice of market manipulation of cryptocurrencies. 

The SSA asserts that the data surveillance to be done by the spot exchanges is pushed onto the listing exchanges, ETF providers, and regulators. The information-sharing agreement shall allow the ETF providers and regulators to request this data from the exchanges. 

The data gathered through this procedure might contain details about specific trades or select traders. It could also push the crypto exchanges to share sensitive data with the regulators, including personally identifiable information (PII). It should be understood that crypto traders do not like their identities being revealed; they came into this for the same reason. If information sharing is mandatory, it might create an issue for them. 

Essentially, a spot Bitcoin ETF tracks the value of Bitcoin without the need to acquire the asset directly. Traditional stock exchanges like Nasdaq could allow the trading of BTC ETFs. If so, the cryptocurrency adoption rate could skyrocket, and the whole industry could benefit from the endeavor. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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