The highly anticipated approval of a spot Bitcoin Exchange-Traded Fund (ETF) has been a subject of discussion among the crypto community. However, a recent revelation by Fox Reporter Eleanor Terrett sheds light on a procedural aspect of the U.S. Securities and Exchange Commission (SEC) that could have a significant impact on the approval process. This article explores the power held by SEC commissioners and its potential to influence the fate of the Bitcoin ETF.
According to Terrett’s tweet on January 9, each of the five SEC commissioners retains the right to request a review and a full commission vote, even if there is no scheduled commission vote on the Bitcoin ETF. This procedural nuance has the potential to delay the approval process, much to the anticipation of the crypto community. The current SEC commissioners, namely Gensler, Crenshaw, Peirce, Lizárraga, and Uyeda, hold significant decision-making power in this matter.
Anne Kelley’s tweet brought attention to a little-known clause, 17 C.F.R. Section 201.431, which empowers any single SEC Commissioner to require the full Commission to review a matter previously approved via staff-delegated authority. This clause serves as a tool to enhance transparency in the SEC’s decision-making process, giving non-chair commissioners a means to influence the final outcome. It introduces an additional layer of scrutiny and potentially prolongs the approval process.
Senior Bloomberg ETF analyst Eric Balchunas expressed confidence in the approval process under the direction of SEC Chair Gensler. Balchunas suggested that the diligent work of the staff with issuers indicates a plan for approval and advised against over-complicating the situation. While his insight provides some reassurance, the power and potential influence of individual commissioners cannot be overlooked.
Justin Slaughter, policy director at Paradigm, highlighted the SEC’s ability to vote on matters without a formal meeting through the “seriatim” process. This implies that decisions can be made individually, without the need for a collective meeting. However, Anne Kelly raised the question of whether a commissioner might request a full commission vote, which could potentially add time to the already uncertain approval process. This raises concerns about potential delays and further prolonging the wait for a spot Bitcoin ETF.
Terrett’s tweets also mentioned that the SEC and major exchanges like Nasdaq, CBOE, and NYSE were engaging in meetings to discuss the spot Bitcoin ETF applications. These meetings serve as a platform for issuers to address any shortcomings in their applications and bring them closer to approval. However, with the approaching January 10 deadline and the uncertain outcome of these meetings, the fate of the Bitcoin ETF approval remains uncertain.
The power held by individual SEC commissioners in requesting a review and a full commission vote has added a new dimension to the approval process of a spot Bitcoin ETF. While Eric Balchunas remains confident in the approval process, the potential for time extension and further delays cannot be disregarded. As the crypto community eagerly awaits the outcome, it is clear that the fate of the Bitcoin ETF lies in the hands of the SEC commissioners and their interpretation of the procedural nuances.