Spot Bitcoin ETF Approval Faces Potential Delay Due to This Clause

Fox Reporter Eleanor Terrett has recently highlighted a significant procedural aspect of the U.S. Securities and Exchange Commission (SEC) that could influence the fate of the much-anticipated spot Bitcoin Exchange-Traded Fund (ETF) approval.

According to Terrett’s January 9th tweet, even though there is no scheduled commission vote on the Bitcoin ETF, each of the five SEC commissioners retains the right to request a review and a full commission vote.

SEC’s Procedural Clause

This procedural nuance could potentially delay the approval of a spot Bitcoin ETF, a development eagerly awaited by the crypto community.

The current SEC commissioners are Gensler, Crenshaw, Peirce, Lizárraga, and Uyeda.

An interesting caveat here on how the 5-member SEC Commission could potentially delay a $BTC Spot ETF approval.

While there’s no scheduled commission vote on the ETF, each commissioner apparently has the right to request a review and full commission vote (under the clause cited… https://t.co/W3pnOPXe2b

— Eleanor Terrett (@EleanorTerrett) January 8, 2024

Eleanor’s revelation was in response to a tweet by Anne Kelley, which shed light on a little-known clause, 17 C.F.R. Section 201.431.

It empowers any single SEC Commissioner to require the full Commission to review a matter previously approved via staff-delegated authority. It is one of the few tools available to non-chair commissioners to enhance transparency in the SEC’s decision-making process.

Adding to the discourse, Eric Balchunas, a senior Bloomberg ETF analyst, commented on Eleanor’s tweet, expressing confidence in the approval process under SEC Chair Gensler’s direction.

I’m sure it’s accurate reading of regs but I’m not worried about. Gensler directed all this. Staff working tirelessly w issuers. Approval is the plan. No reason to complicate it.

— Eric Balchunas (@EricBalchunas) January 9, 2024

Balchunas suggested that the staff’s diligent work with issuers indicated a plan for approval and advised against over-complicating the situation.

The string of tweets followed a statement by Justin Slaughter, policy director at Paradigm, highlighting the SEC’s ability to vote on matters without a formal meeting through the “seriatim” process.

In a subsequent tweet, Anne Kelly emphasized the potential for this clause to add time to the approval process, raising the question of whether a commissioner might request a full commission vote.

SEC Reportedly Overwhelmed with Paperwork

On January 2, Terrett had expressed skepticism about an imminent spot Bitcoin ETF approval, citing vacations and work overload at the SEC. Her comments responded to crypto expert Scott Melker’s speculation about a potential approval.

While the @SECGov is surely unpredictable, it would surprise me if approvals were to happen tomorrow.

From what I understand through conversations I’ve had with issuers, the SEC still has to review all the changes made to the S-1s filed on Thursday/Friday AND make comments on… https://t.co/CnkYdXsbD4

— Eleanor Terrett (@EleanorTerrett) January 1, 2024

Comparing the situation to the Ethereum futures approval in October 2023, she outlined a similar timeline for the spot Bitcoin ETF, suggesting that the process might extend beyond the immediate deadline.

Furthermore, Terrett mentioned in another tweet that the SEC and major exchanges such as Nasdaq, CBOE, and NYSE were meeting regarding the spot Bitcoin ETF applications.

These meetings allow issuers to address application shortcomings, moving them closer to approval. However, with the January 10 deadline approaching, the outcome of these meetings and the SEC’s final decision remain uncertain.