SEC delays decision on approving NYDIG’s bitcoin ETF

abdelaziz Fathi

The top US regulator continues to delay the decision to approve any crypto exchange-traded funds (ETF), today issuing a fresh deadline extension notice for NYDIG’s proposal.

On Tuesday, the Securities and Exchange Commission (SEC) said it now expects to decide whether to approve or disapprove the spot bitcoin product proposed by New York Digital Investment Group (NYDIG) on March 15.

Stone Ridge Asset Management’s bitcoin spin-off firm has filed with the agency to list the ETF on the New York Stock Exchange under a yet-to-be-determined ticker symbol. The bitcoin tied to the product would be custodied with its trust arm. NYDIG’s filing also notes that the firm will be working with investment giant Morgan Stanley as an initially authorized participant.

NYDIG builds bitcoin-focused investment and custody products for institutional investors. It is fast approaching $10 billion in assets under management, and recently teamed up with US Bancorp (US Bank), Wells Fargo and JPMorgan to offer bitcoin funds to their high net worth clients.

SEC’s long history of rejections

There is a long history of proposed Bitcoin ETFs that have been rejected by the SEC, citing concerns over extreme price volatility and potential fraud risks for investors.

Last month, the regulator extended its review of NYSE Arca’s “actual” Bitcoin ETF, named Bitwise Bitcoin ETP Trust, and Grayscale Bitcoin Trust’s Bitcoin ETF. The regulatory body said in an extension notice that it would now give an answer on these proposal on February 1 and 6, respectively.

A decision was expected no earlier than mid-December, 45 days from the time the applications for the funds were published in the federal register, but the SEC is yet to approve a single BTC exchange-traded fund.

The agency only extended the deliberation window or opened the matter to public comments to avoid reaching any decision on a proposal, meaning today’s delay is no surprise.

Earlier in in October, the regulator also pushed the deadline to make a decision on Kryptoin Bitcoin ETF, Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, and Wisdomtree Bitcoin Trust.

SEC Chair Gary Gensler said that he would be open to approving a bitcoin-futures ETF, but only under certain conditions. The revelation rankled some fund managers who were hopeful of a physically backed ETF, but regulated like a normal exchange-traded fund under a 1933 law.

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