the United States Securities and Exchange Commission (SEC) has decided to initiate a procedure on the approval of the WisdomTree’s EFT on Bitcoin, which will delay the launch of the same until next autumn, according to Nikhilesh De on Coindesk.
In a Tuesday order, which initiated proceedings on whether or not the agency should approve the application, the SEC requested comments from the general public and industry experts in particular about the WisdomTree app for others, know if the ETF will be a safe product for investors. These comments must be submitted within three weeks of the document’s publication in the Federal Register, the national record book. Also, rebuttals must be filed within seven weeks.
Currently, the SEC is reviewing more than a dozen active bitcoin ETFs applications. Industry participants, including WisdomTree, have also submitted applications for an ether ETF product and a bitcoin futures ETF. For its part, the federal securities regulator has not yet approved any cryptographic ETFs within the United States, although proponents claim that a bitcoin ETF can help investors by creating a more regulated market.
“Typically, the SEC has delayed making firm decisions on bitcoin ETF applications whenever it can legally, meaning Tuesday’s delay is not a surprise. This is the second active request that passes to this phase of sec regulation in 2021, joining a similar request filed by VanEck, indicating that the process to potentially approve an ETF continues to move forward,” says Nikhilesh De.
Advocates also believe that a bitcoin ETF will expand access to encryption markets. Because an ETF is regulated, some fund managers, financial institutions, or even retail investors may be more willing to buy shares of an ETF, rather than buying bitcoins directly.
Still, the chances of the SEC approving a bitcoin ETF seem slim. the SEC Chairman Gary Gensler, has expressed concern about bitcoin market manipulation and investor protection during his testimony before Congress. The agency has often cited market manipulation as a key concern in rejecting previous bitcoin ETF applications.
In fact, the SEC posted questions about whether the ETF “would be susceptible to manipulation” and how the proposed product could be protected from fraudulent activity in its decision on Tuesday.
The SEC also questioned whether the CME bitcoin futures market it is large enough to evade manipulation.
“What are the views of commentators on whether there is a reasonable probability that a person attempting to manipulate stocks will also have to trade in CME to manipulate stocks?” the document asked.
Ron Hammond, director of government relations, Blockchain Association, tweeted that investor protection and concerns about market structure remain a priority for the agency, and said rumors suggest an ETF will not be approved this year.