SEC delays Valkyrie spot Bitcoin ETF decision again 

In this post:

  • The U.S. Securities and Exchange Commission (SEC) has once again extended its decision deadline to October 19, 2023, for the listing of Valkyrie Bitcoin Fund shares on the Nasdaq Stock Market, citing legal and policy issues.
  • The SEC is inviting public comments on various aspects of the proposal, including its alignment with Section 6(b)(5) of the Securities Exchange Act of 1934, which mandates rules to prevent fraud and protect investors.
  • This delay is part of a broader pattern of SEC postponements on cryptocurrency-based financial products, including other Bitcoin-related funds from companies like BlackRock, Fidelity, and VanEck. The approval process is expected to extend for several more months.

The U.S. Securities and Exchange Commission (SEC) has extended its decision-making period to October 19, 2023, concerning the listing and trading of Valkyrie Bitcoin Fund shares on the Nasdaq Stock Market.

The proposed rule change, filed by Nasdaq on July 3, 2023, and open for public comment since July 21, aims to govern the listing under Nasdaq Rule 5711(d), which oversees Commodity-Based Trust Shares. The SEC’s primary focus is to assess the proposal’s alignment with Section 6(b)(5) of the Securities Exchange Act of 1934. This section mandates that national securities exchange rules must aim to prevent fraudulent activities and protect both investors and the public interest.

The SEC stated during the filing: “Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change.”

SEC seeks public input on multiple aspects

Moreover, the SEC is inviting public comments on various facets of the proposal. These include the potential for manipulation of the proposed Trust and Shares, the liquidity and transparency of Bitcoin markets, and the efficacy of a surveillance-sharing agreement with Coinbase, Inc. The Commission is especially keen on understanding how the proposal contributes to the prevention of fraudulent and manipulative acts and serves the public interest.

The Valkyrie Bitcoin Fund intends to mirror the performance of Bitcoin’s value, as indicated by the CME CF Bitcoin Reference Rate—New York Variant. The fund will solely hold Bitcoin, stored by a custodian on behalf of the Trust. Additionally, the SEC’s proceedings aim to scrutinize whether the proposed rule change is in line with the legal requirements that focus on investor protection and public interest.

Previous delays and ongoing evaluations

The SEC’s move to extend the decision period is not an isolated incident. The regulatory body previously delayed decisions on several other Bitcoin-related funds, including those from BlackRock, Fidelity, VanEck, WisdomTree, Invesco Galaxy, and Bitwise. This pattern suggests a cautious approach by the SEC in greenlighting cryptocurrency-based financial products. Just earlier this week, the SEC also postponed a decision on the ARK 21Shares Bitcoin ETF, setting a new deadline for January 10 of next year.

The SEC recently clarified in the filing that initiating proceedings does not imply any conclusions regarding the issues at hand. Valkyrie Funds, which already offers a Bitcoin Strategy ETF and a Bitcoin Miners ETF, had filed for a spot fund in June this year. The proposed ETF aims to hold Bitcoin to reflect the performance of the CME CF Bitcoin Reference Rate, New York Variant, and plans to list its shares on the Nasdaq exchange under the ticker BRRR.

According to the filing, commentators have a 21-day window to submit their views, followed by a 35-day period for rebuttals. Hence, the approval process is likely to extend for several more months. 

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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