Approval of the Spot Bitcoin ETF may be delayed as a result of this clause.

Fox reporter Eleanor Terrett recently highlighted a significant process by the US Securities and Exchange Commission (SEC) that could affect the fate of the approval of the highly-protected Bitcoin Exchange-Traded Fund (ETF).

According to Terrett's Jan. 9 tweet, although there is no planned commission vote on the Bitcoin ETF, each of the five SEC commissioners has the right to request a review and a full commission vote.

SEC Procedure Clause

This regulatory discrepancy could delay the approval of the Bitcoin ETF, a development highly anticipated by the crypto community.

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

Here's an interesting note on how the 5-member SEC Commission could delay approval of the $BTC Spot ETF.

While there is no scheduled commission vote on an ETF, each commissioner has the right to request a review and a full commission vote (under the said clause…

— Eleanor Terrett (@EleanorTerrett) January 8, 2024

Eleanor's revelation was in response to a tweet by Ann Kelly, which referred to a little-known phrase, 17 CFR Section 201.431.

It authorizes any SEC commissioner to consider a matter previously authorized by the employee delegation to the full commission. It is one of the few tools available to non-chairman commissioners to enhance transparency in the SEC's decision-making process.

Adding to the rhetoric, Eric Balchunas, senior analyst at Bloomberg ETF, commented on Eleanor's Twitter, expressing confidence in the approval process under SEC Chairman Gensler's direction.

I'm sure it's the correct reading of the regs but never mind. Gensler directed all of this. The employees who work tirelessly. Approval is the plan. There is no reason to complicate it.

— Eric Balchunas (@EricBalchunas) January 9, 2024

Balchunas advised staff to work diligently with issuers to get the plan approved and not overcomplicate the situation.

A string of tweets, emphasizing the ability to vote on issues without a formal meeting through the “seriatim” process, followed a statement by Justin Slaw, policy director at Paradigm.

In a subsequent tweet, Ann Kelly emphasized the potential for this clause to increase the time for the approval process, which raised the question of whether a commissioner could ask for a full commission vote.

The SEC is reported to be overwhelmed with paperwork

On January 2, Terrett expressed skepticism over the recent approval of a Bitcoin ETF, citing delays and workload at the SEC. Her comments came in response to speculation about crypto expert Scott Melker's endorsement.

@SECGov While certainly unpredictable, I'd be surprised if approvals were made tomorrow.

From my discussions with issuers, the SEC is still reviewing changes to S-1s filed on Thursday/Friday and in…

— Eleanor Terrett (@EleanorTerrett) January 1, 2024

Comparing the situation with Ethereum futures approval in October 2023, she described a similar timeline for the spot Bitcoin ETF, which could extend the process beyond the immediate deadline.

Teret also mentioned in another tweet that major exchanges such as Nasdaq, CBOE and NYSE are contacting each other regarding Bitcoin ETF applications.

These meetings allow developers to address application defects, moving them closer to approval. However, as the January 10 deadline approaches, the outcome of these meetings and the SEC's final decision are uncertain.