As the deadline approaches for the US Securities and Exchange Commission (SEC) to approve, reject or potentially delay the long-awaited bitcoin ETF ApplicationsIntriguing theories have emerged about the potential legal challenges that may arise.
Major asset managers around the world have submitted these applications and, if forecasts hold, approvals between January 5 and 10 could lead to significant legal repercussions for both applicants and the SEC.
SEC Faces Dilemma Over bitcoin Spot ETF Approvals
An SEC expert, known under the pseudonym AP_Abacus (Andrew) on platform
According For Andrew, the SEC's strict cash requirements can pave the way for strong legal challenges by one or more companies. While the SEC has typically followed the “in-kind” commodity ETF standard, the introduction of retail risk into spot bitcoin ETFs has raised concerns.
Interestingly, Andrew suggests that multiple conversations have led to speculation that crypto asset management company Grayscale (GBTC) could potentially take legal action first.
Legal expert and XRP supporter Fred Rispoli has given his perspective on the matter. Rispoli suggests that the SEC is striking a delicate balance between satisfying its customers, primarily the big banks, and avoiding potential backlash from appeals courts for not quickly approving a bitcoin Spot ETF. Rispoli claims that the SEC's “strategic delay” may be the best solution to mitigate these challenges.
The implications of potential legal challenges following bitcoin ETF approval are significant. If these challenges materialize, they could introduce further delays and uncertainties into the regulatory landscape.
Applicants may face protracted legal battles, which will affect their plans and strategies in the emerging cryptocurrency market. At the same time, the SEC could face legal scrutiny and possible criticism to handle bitcoin ETF applications.
Multiple bitcoin Spot ETF Approvals Before January 10?
Cathie Wood, founder and CEO of ARK Investment Management, recently shared her positive outlook on the approval of bitcoin spot ETFs. in a interview On CNBC, Wood expressed his belief that several bitcoin ETFs could receive approval before January 10, 2024.
Wood explained the concept of “selling on the news,” a term traders use to describe the phenomenon in which investors anticipate an event, drive prices up in advance, and sell their holdings once the event occurs.
Wood suggested that those who have already experienced important bitcoin profits They may choose to sell their positions following the news of bitcoin ETF approvals.
During the interview, Wood also shared positive updates on discussions between industry players and the US SEC regarding bitcoin spot ETFs. Wood expressed optimism, saying the talks have been “very positive.”
Additionally, Wood mentioned a notable shift in sentiment over the past month to six weeks, indicating a shift in the regulatory landscape.
While no specific details were provided, Wood's statement suggests that recent developments have contributed to a more favorable environment for bitcoin ETF approvals.
Featured image from Shutterstock, chart from TradingView.com
