SEC sets deadline for applicants to finalize spot Bitcoin ETF filing

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The U.S. Securities and Exchange Commission (SEC) has set a deadline for spot Bitcoin ETF applicants to submit final S-1 amendments by December 29.

According to Reuters, SEC officials met on December 21 with representatives from at least seven firms aiming to introduce spot Bitcoin ETFs in early 2024. Among the attendees were representatives from BlackRock, Grayscale Investments, ARK Invest and 21 Shares.

The meetings also included representatives from potential listing exchanges like Nasdaq and the Chicago Board Options Exchange, along with legal professionals and issuers.

Officials allegedly informed meeting attendees that any issuer missing the December 29 deadline would not be considered for the initial potential approvals of spot Bitcoin ETFs in early January.

Fox Business journalist Eleanor Terrett shared the news, saying, “The SEC told issuers that applications that are fully finished and filed by Friday will be considered in the first wave.”

The SEC has turned down several attempts to introduce spot Bitcoin ETFs in recent years, citing concerns about potential manipulation in the cryptocurrency market. The only cryptocurrency ETFs approved by the agency are linked to Bitcoin and Ethereum futures contracts traded on the Chicago Mercantile Exchange.

Applicants, SEC intensify meetings

Leading up to the SEC’s approaching final deadline, discussions between the SEC and Bitcoin ETF issuers have recently grown more intense.

Last Thursday, the SEC, expected to approve ETFs linked to spot Bitcoin in early 2024, conducted seven meetings with potential Bitcoin ETF issuers, totaling 32 meetings with Bitcoin ETF applicants.

Bloomberg ETF analyst James Seyffart said that Bitwise, Invesco and Hashdex have not had meetings with the SEC. This has raised speculation that the regulator might have found the S-1 filings from these firms satisfactory.

“So far we know there were at least 7 separate meetings/calls between SEC and potential #bitcoin ETF issuers yesterday. Total meetings at 32. Notably @BitwiseInvest, @InvescoUS, & @hashdex aren’t showing official meetings (Yet?). Maybe SEC is okay with their current S-1 documents,” Seyffart said in a social media post.

Seyffart also revealed that Global X and WisdomTree, among the applicants, have yet to meet the SEC. He also expressed doubt about Pando and 7RCC, the new spot Bitcoin ETF applicants, meeting with the agency.

Applicants shifting to cash redemption

Ahead of the upcoming deadline, several spot Bitcoin ETF applicants have been rushing to change their S-1 filings. They are moving from in-kind redemptions to cash redemption models, which replace non-monetary payments like Bitcoin.

Besides the cash-only rule, the SEC requires Bitcoin ETF applicants to specify the authorized participants (AP) in their filings. Bloomberg’s ETF analyst Eric Balchunas suggests that finalizing the AP agreement will be the final obstacle for spot Bitcoin ETFs to overcome.

“This is no easy last step, and may keep some from starting gate. AP agreement + cash creates = approval,” Balchunas said in a social media post.

As of December 22, none of the spot Bitcoin ETF applicants had completed the AP agreement, while seven firms had exclusively switched their redemption model to cash.

Even with several firms making last-minute updates for their spot Bitcoin ETF applications, Seyffart remains confident that the SEC will approve the first spot Bitcoin ETFs by January 10.

“All this is to say — we still think this is happening by Jan. 10,” Seyffart said.