Public Input Sought by SEC on Franklin Templeton and Hashdex Bitcoin ETFs

The SEC Requests Comments on Franklin Templeton and Hashdex Bitcoin ETF Proposals

The United States Securities and Exchange Commission (SEC) has announced that it is seeking written comments on the proposed Franklin Templeton and Hashdex spot Bitcoin exchange-traded fund (ETF) bids. The agency has requested comments on whether to approve or deny the applicants’ Forms 19b-4, which are public disclosures approved by the SEC Trading and Markets Division. The SEC’s requests for comments have a 35-day open period for responses.

Proposed Rule Changes for ETF Trading

The proposed rule changes for the ETFs were filed in late September, with the Hashdex ETF set to be traded on the New York Stock Exchange Arca and Franklin Templeton’s ETF on Cboe BZX. The SEC extended its deadline for deciding on the applications until November 15. Commenters are invited to assess potential manipulation risks and the size of the exchanges hosting the ETFs.

Complex Structure of Hashdex Bitcoin ETF

The structure of Hashdex’s proposed Bitcoin ETF is more complex than Franklin Templeton’s. It would be a futures ETF that holds spot BTC, acquiring BTC from other exchanges on the CME for pricing instead of relying on a Coinbase surveillance sharing agreement. The SEC is asking commenters about the size and liquidity of the CME in relation to this fund structure, as well as sponsor Toroso Investments’ calculations regarding the BTC price on regulated and unregulated exchanges.

Hot Take: SEC Seeks Public Input on Bitcoin ETF Proposals

The SEC’s decision to request public comments on the Franklin Templeton and Hashdex Bitcoin ETF proposals shows that it is taking a cautious approach to approving these investment vehicles. By seeking input from market participants, regulators can gather valuable insights into potential risks and concerns related to the ETFs. This move also highlights the SEC’s commitment to transparency and accountability in its decision-making process. As the crypto market continues to evolve, it is crucial for regulators to carefully evaluate new financial products and ensure they meet the necessary regulatory standards to protect investors.