SEC Faces Potential Legal Challenges Over Bitcoin ETF Approvals
As the deadline approaches for the US Securities and Exchange Commission (SEC) to make a decision on Bitcoin ETF applications, there are concerns about potential legal challenges that may arise. Major asset managers from around the world have submitted these applications, and if approvals are granted between January 5 and 10, it could have significant legal consequences for both the applicants and the SEC.
Insider Hints at Post-Approval Challenges
An insider known as AP_Abacus on the X platform has suggested that there are discussions within legal circles about potential legal challenges after Bitcoin ETF approvals. The SEC’s strict cash requirement for ETFs may lead to solid legal challenges from one or more firms. While the SEC has traditionally followed an “in kind” commodity ETF standard, introducing retail risk to Spot Bitcoin ETFs has raised concerns. It is speculated that crypto asset management firm Grayscale (GBTC) may be the first to initiate legal action.
Legal Expert’s Perspective
Legal expert Fred Rispoli believes that the SEC is trying to balance satisfying its clients, mainly large banks, and avoiding potential backlash from appellate courts for not promptly approving a Spot Bitcoin ETF. Rispoli suggests that a “strategic delay” by the SEC may be the best solution to mitigate these challenges.
Potential Implications of Legal Challenges
If legal challenges arise following Bitcoin ETF approvals, it could lead to further delays and uncertainties in the regulatory landscape. Applicants may face prolonged legal battles, impacting their plans and strategies in the cryptocurrency market. Additionally, the SEC could face legal scrutiny and criticism for its handling of Bitcoin ETF applications.
Predictions for Multiple Bitcoin Spot ETF Approvals
Cathie Wood, CEO of ARK Investment Management, is optimistic about the approval of Bitcoin spot ETFs. She believes that multiple Bitcoin ETFs could receive approval by January 10, 2024. Wood also mentioned the concept of “selling on the news,” where investors anticipate an event, drive up prices, and sell their holdings once the event occurs. She suggests that those who have already profited from Bitcoin may choose to sell following the news of Bitcoin ETF approvals.
Wood shared positive updates on discussions between industry players and the SEC regarding Bitcoin spot ETFs. She noted a noticeable shift in sentiment within the past month to six weeks, indicating a more favorable regulatory environment for Bitcoin ETF approvals.
Hot Take: Positive Outlook for Bitcoin ETF Approvals
As the deadline for Bitcoin ETF approvals approaches, there are potential legal challenges that may arise after the SEC makes its decision. However, there is optimism among some industry experts, such as Cathie Wood, who believe that multiple Bitcoin spot ETFs could receive approval by January 10, 2024. Despite these positive outlooks, there may still be delays and uncertainties due to potential legal battles and regulatory scrutiny. The coming weeks will be crucial in determining the future of Bitcoin ETFs and their impact on the cryptocurrency market.
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