SEC Punt New York Stock Exchange Bitcoin ETF Options

The US Securities and Exchange Commission has delayed a decision on allowing bitcoin options ETFs to trade on the New York Stock Exchange, the regulator announced Monday.

In a statement, the SEC extended the initial review period for trading any Bitcoin ETF options—including digital asset manager Bitwise's Bitwise Bitcoin ETF and Grayscale's Grayscale Bitcoin Trust—another 45 days until the end of May.

SEC Assistant Secretary Sherry R. Haywood wrote, “The Commission finds it appropriate to extend the period within which to act on the proposed rule change so that it has sufficient time to amend the proposed rule.”

According to Haywood, the SEC has set a deadline of May 29, 2024, to approve or reject the revised rules.

For some, the SEC's continued delay in making decisions on crypto-based ETFs will further damage the agency's reputation.

“There is an old saying, ‘Justice delayed is justice denied'.” said James Angel, associate professor of finance at Georgetown University. Decrypt. “Essentially, a regulatory agency that cannot do its job on time loses credibility with its constituents, the people it regulates, Congress, and the public at large.”

As Angelu explained, the SEC's argument to disallow Bitcoin ETFs has been hampered by the agency's approval. Bitcoin Futures ETFsand the growth of Bitcoin ETF approvals has slowed due to bureaucracy and red tape.

“Gensler has a very ambitious agenda, and he is more process-driven than previous SEC chairs,” Angelou added. “So, what we're seeing happening is the work coming out of the commission, things like the regulatory documents are getting longer and longer. And since the SEC keeps losing in court, they feel they need to do a better job of documenting what they do.

The proposal to allow the listing and trading of Bitcoin ETF options on the New York Stock Exchange was filed on February 29, a month after the SEC approved 11 spot Bitcoin ETFs in January.

An ETF option refers to a financial derivative that allows investors to buy or sell shares of an ETF on a specific date, providing a way to hedge, hedge, or earn income from the differences in ETFs.

According to data from the Chicago Board Options Exchange, over the past 24 hours the New York stock market has held 21.22% of the US options market volume and 19.43% over the past five days.

The SEC said it received two comments on the proposed rule change, though the agency did not say who the comments were from, but Grayscale and Angelou had comments on the filing.

“Our argument is straightforward: if investing in stock options for commodity derivatives is acceptable to investors, then so should investing in stock options for commodity derivatives,” wrote Michael Sonnenschein, CEO of Greyscale.

Sonnenshein stressed that since the SEC has already approved options on Bitcoin futures ETFs and approved Bitcoin ETFs for trading, it should also approve the list of options on Bitcoin ETFs.

In the year In August 2023, Grayscale won its appeal against the SEC. The win paved the way for Grayscale to convert Bitcoin Trust into an ETF.

Don't you have better things to do than waste time poring over these legal documents? In Angel's comments. “This delay has puzzled me and many others. Is the SEC looking for another fig leaf to deny this? If so, he must have a masochistic desire to suffer another humiliating defeat in court.

Although the SEC has approved Bitcoin ETFs, the regulatory agency has yet to approve a spot Ethereum ETF, delaying submissions from Invesco, Galaxy Digital and Ark/21Shares.

“The market treats Bitcoin as a speculative tech stock,” Angelou added, explaining the digital asset's correlation with other tech stocks. But just because the future is uncertain doesn't mean people can't trade this stuff in a well-regulated environment.

Grayscale and Bitwise did not immediately respond to a request for comment from Decrypt.

Edited by Ryan Ozawa.