SEC Issues Fresh Comments On Bitcoin ETF S-1s: A Delay Signal?

As the January 10 deadline for the approval of several spot Bitcoin ETF looms, the US Securities and Exchange Commission (SEC) has made a notable move by sending new comments on updated S-1 filings just hours after their submission. This swift response from the SEC has sparked a debate within the crypto community about the potential implications for the approval timeline of Bitcoin ETFs.

Will The Bitcoin ETFs Be Delayed?

Perianne Boring, founder and CEO of the Chamber of Digital Commerce, expressed concern over the SEC’s actions, suggesting it could be a signal for delay. She stated, “SPOT BITCOIN ETF UPDATE: The SEC just issued additional comments on pending applicant’s S-1s. This is a delay signal.”

However, this view is not universally held. James Seyffart, an ETF expert for Bloomberg, provided a more nuanced perspective. He remarked, it is true that comments came back on the S-1 documents which were filed on Monday morning with the fees that everyone wanted to see.

However, Seyffart expects to see more amendments tomorrow because of this. “That said — I don’t think this is necessarily a delay signal. Really this just shows how quickly the SEC is turning these things around. Borderline unheard of to send over a document to the SEC in the morning and get comments back the same day (I think). If they wanted to delay — the issuers wouldn’t have gotten comments back tonight,” the expert stated.

Fox Business journalist Eleanor Terrett, after speaking with some of the involved parties, also reported a general sentiment of confidence. “Just spoke with a couple of people who received additional comments. They say they’re not worried and the SEC hasn’t conveyed a change of plans. My sense is that they’re fairly confident this is just part of the process to get everything in before January 10th,” Terrett said.

Despite initial concerns, Perianne hopes for a positive outcome, “After reading commentary from people like James Seyffart and Eleanor Terrett, I hope I am wrong in my interpretation. BUT I’m worried the SEC has more tools at its disposal to block spot bitcoin ETFs from coming to market. Chair Gensler doesn’t want to go down without a fight. I’m hoping for a successful launch this week.”

S-1s Do Not Need To Be Complete

Adding to the optimism, Scott Johnsson, a finance lawyer at Davis Polk, pointed out the unusual speed of the SEC’s response. Moreover, he reminded the community that S-1s do not need to be complete when 19b-4s are approved.

“Take futures ETFs in 2022. Hashdex didn’t even get initial comments until after its 19b-4 was approved. More than anything, these quick comments demonstrate SEC working to push everything forward for a quick approval and launch (vs what we saw with futures),” said Johnsson.

Further investigation also reveals that the comments addressed minor details in the amended S-1 forms rather than significant changes, suggesting that they should not affect the timeline for potential approval by the regulator. Prominent issuers, including BlackRock, Fidelity, Bitwise, Ark and Grayscale had announced their expected fees in filings earlier on Monday.

Monday’s comments also indicate that SEC officials continue to engage in dialogues with the would-be ETF issuers. While a delay seems possible, it appears rather unlikely at this stage.

At press time, BTC was trading at 46,835. The price has broken out of the uptrend channel established in mid-October and is currently performing a retest. If this is crowned with success, the 0.618 Fibonacci retracement level at $48,700 would be the next target.