SEC Seeks Public Feedback For Franklin Templeton and Hashdex Spot Bitcoin ETFs
The United States Securities and Exchange Commission (SEC) wants public opinion on the spot Bitcoin (BTC) ETF applications of Franklin Templeton and Hashdex.
In an announcement on Nov 28, the Commission highlighted the next phase in the scrutiny of spot BTC ETF applications filed by both companies after several weeks of uncertainty.
The SEC has requested official public comments to aid its decision on whether to approve or reject the spot ETF approval and its Forms 19b-4.
Form 19b-4 is a document approved by the Trading and Markets Division of the SEC for public disclosure of certain details on an application before a potential approval.
Market manipulation concerns linger
According to the release, the financial regulator seeks information primarily regarding market manipulation and fraud concerns alongside the issue of Coinbase being the custodian and price discovery efforts.
This continues to be a recurring issue as the SEC has rejected all previous spot Bitcoin ETF applications citing market manipulation concerns with the crypto community pushing back by citing similar approvals in other sectors and calling Gary Gensler’s approach to the market as stifling rapid development.
“The Commission is providing notice of the grounds for disapproval under consideration… the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices’ and ‘to protect investors and the public interest.”
The Commission explained that the institution of any proceeding is not conclusive proof that the SEC has reached a decision concerning issues relating to the ETF but a call for interested persons to provide comments geared towards a rule change.
This latest development is standard procedures for ETF applications under review by the SEC and will span 35 days. Both applications were filed to the Commission and September with great optimism following recent events and renewed institutional interest in the market.
Optimism grows with new developments
While Hashdex spot Bitcoin ETF would be traded on the New York Stock Exchange Arca, Franklin Templeton’s will be on Cboe BZX. Comments will be due 21 days with a further two weeks window for rebuttals.
Hashdex applications have been explained to be structured as a futures ETF that would have spot BTC and would not rely on Coinbase. The company proposes reliance only on pricing while BTC will be acquired from other exchanges including the CME.
Along social media spaces, there is renewed optimism about the SEC approving a spot BTC ETF in the near future which will usher a new cycle in the market. The regulator previously delayed making decisions on the ETF applications.