SEC Reportedly Overwhelmed with Paperwork as Deadline for Spot Bitcoin ETFs Approach

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The Securities and Exchange Commission (SEC) is reportedly swamped with a substantial amount of paperwork as the January 10 deadline for the approval of spot Bitcoin (BTC) ETFs approach. 

According to Eleanor Terrett, a journalist for FOX Business, a spot Bitcoin ETF approval seems unlikely amid vacations and work overload. 

“While the SEC is surely unpredictable, it would surprise me if approvals were to happen tomorrow,” she said. 

“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 them.” 

Her comments were in response to speculation by crypto expert Scott Melker, who hinted at a potential approval today.

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

Melker had shared the rumor that the first Bitcoin ETF in the United States could be approved as early as January 2. 

However, Terrett compared the situation to the approval process for Ethereum futures in October 2023 and pointed out the tight timeline, considering the recent time off for SEC staff.

“If the SEC follows a similar approval timeline to the ETH futures in October, the agency will, after this round of reviews, communicate to the issuers a date they want the final S-1s to be filed and make them effective in the subsequent 24-48 hours. SEC staff has been off since Friday, so a Tuesday or even a Wednesday approval seems tight,” Terrett concluded.

No Communication From the SEC

Adding to the discussion, FOX Business journalist Charles Gasparino reported that sources at BlackRock indicated there had been no communication from the SEC. 

Breaking re BTC ETF: People at @BlackRock say it’s radio silence from @SECGov; @EleanorTerrett’s sources say the amount of paper work the SEC still needs to go through make the announcement likely toward week’s end

— Charles Gasparino (@CGasparino) January 1, 2024

Terrett’s sources also suggested that the amount of paperwork the SEC still needs to go through makes an announcement towards the end of the week more likely. 

This further supports the notion that the SEC is currently overwhelmed with the workload, potentially causing a delay in the announcement.

If the SEC manages to approve the ETF proposals from firms like BlackRock, Fidelity, Invesco, Bitwise, and VanEck by January 5, they would be slightly ahead of the expected schedule. 

Bloomberg ETF analysts Eric Balchunas and James Seyffart had previously predicted that the SEC would likely approve a batch of spot Bitcoin ETFs closer to the end of the deadline.

“We are definitely expecting it by January 10. Still, I think the official date is more likely January 8th – 10th,” Seyffart recently commented.

The statement came in response to a Reuters report suggesting that the SEC might notify issuers of their clearance to launch spot Bitcoin ETFs as early as Tuesday or Wednesday, paving the way for a launch in the following week.

The SEC has historically denied or delayed spotcoin ETFs due to concerns over market manipulation and investor protection. 

However, following a landmark lawsuit loss to Grayscale Investments in August, the agency began collaborating more closely with a dozen firms to explore the possibility of bringing such funds to the market. 

Many industry participants, including Cathie Wood of ARK Invest, believe that the SEC will approve multiple applications simultaneously to prevent any single firm from gaining a first-mover advantage.

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