It is a very fast response time from the SEC I have to say. But I guess when it comes to BlackRock you either make it quick or you don't make it at all. If you catch my drift, nudge, nudge you know what I mean. ;)
Redo it and do it right
That is more or less what the SEC is telling BlackRock and its cronies, ARK Invest, Fidelity, and other asset managers. And why you might ask. Well, sadly it is not a big deal, at least I assume it is not. The SEC argues the applications are not “sufficiently clear and comprehensive”. To be more exact BlackRock and Friends should have listed the spot Bitcoin exchange with which they would have a "surveillance-sharing agreement" or provided sufficient information about the details of those surveillance arrangements.
The interesting thing tho is it was BlackRock’s application that introduced a “surveillance sharing agreement”. The general idea of it is that it will provide information about market trading and clearing activities and make sure these are shared between entities to avoid the possibility of market manipulation. This in turn then got ARK Invest and 21Shares thinking and they amend their third application for a spot BTC ETF, so it also would include a similar surveillance agreement. Presumably, they were hoping to ride Big Brother's cocktails, as they assumed they would get approval. And they then could just get it as well due to the similarity in their applications.
Hopefully, this whole thing means that these ETF will be given the runaround by the SEC for quite some time still. Seeing that some companies have had to resort to "third times the charm" and still failed gives me hope. No real idea how they managed to mess up their applications so many times. But I guess there are some things money can't buy.
BlackRock has a surprise in store for the SEC
BlackRock does appear to have had a little bit of a surprise up its sleeve for the SEC. At least I chose to look at it that way. When they recently refiled their papers with the SEC they, and the surprise was in the clarification.
Found on page 33 in the submission papers, link below
Yes, yes indeed. They have partnered with Coinase for their surveillance-sharing agreement. Something that I personally think is hilarious. But then again there are not that many options if you want to use an American exchange. And ARK Investment Management has also amended its spot BTC ETF application. It now includes a surveillance-sharing agreement with the Chicago Board Options Exchange, Cboe, and an unnamed U.S.-based crypto exchange.
The unnamed U.S.-based crypto exchange haw however caused some speculation. Many seem to think they as well have partnered up with Coinbase. Just like BlackRock have. If that is the case however it would put their and BlackRocks application in direct conflict. Not exactly sure why, but It might very well be it could put Coinbase in the position to do the very thing this surveillance-sharing agreement is trying to prevent. Manipulate the market. But that is 100% speculation on my part. So take that with a big bag of salt.
It will be interesting to follow to see who will be the first to get their U.S. spot ETF license. So far the SEC has rejected every application. Even to the point that in June 2022, Grayscale Investments filed a lawsuit against the SEC, alleging the regulator had failed “to apply consistent treatment to similar investment vehicles”. It will be interesting to follow this process and see if the lawsuit will be done before anyone else gets their ETF license, or if Grayscale wins, and get theirs first due to the lawsuit.
Do you have any thoughts on this whole EFT race that is currently going on? Do you think it will help spark the next bull run once the floodgates are opened? Please share your thoughts with me in the comment section.
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