Franklin Templeton’s application for a spot Bitcoin exchange-traded fund received acknowledgment from the Securities and Exchange Commission [SEC] in a historic and pivotal move. This development holds immense significance for the AUM, managing assets worth up to $1.5 trillion, as it solidifies its presence in the asset management sector. With the filing of a 19b-4 form for their spot Bitcoin ETF proposal and the subsequent approval, Franklin Templeton has set the regulatory wheels in motion.
The 19b-4 form serves as a formal notification to the Commission regarding a proposed rule change by a self-regulatory organization [SRO]. Essentially, it is a document that informs a non-governmental entity exercising regulatory authority over a particular industry or profession about changes being proposed.
This announcement arrives at a time when the SEC is also deliberating on applications for spot crypto ETFs from various entities, including Hashdex. Franklin Templeton’s application stands out due to the company’s substantial footprint in the asset management landscape.
Over the past few days, the SEC has come under intense scrutiny for its stance on spot ETF products. Notably, the regulator has announced delays in its decisions regarding Ethereum ETF applications from VanEck and ARK. It is essential to recognize that the SEC has a maximum of 240 days from the date of filing in the Federal Register to either approve or deny an ETF application.
This timeline places the decision date for these proposed funds in late May 2024. However, the regulator has the authority to solicit additional public input during several interim deadlines, potentially further extending the final verdict.
Bitcoin: SEC’s Gensler Doesn’t Hold Back
On September 26, U.S. Representatives Mike Flood, Wiley Nickel, Tom Emmer, and Ritchie Torres shot a letter to Gary Gensler, the chief of the U.S. securities watchdog, accusing him of displaying bias against spot Bitcoin exchange-traded products. They pointed to the legal precedent set by Grayscale Investments, which won a review of its own ETF offering.
The four lawmakers asserted that following the Grayscale court decision, there is “no reason to continue to deny” applications for spot crypto ETFs, emphasizing that the SEC’s rationale was deemed “arbitrary and capricious” in approving investment vehicles linked to Bitcoin futures. Despite the ongoing legal battles between his agency and crypto firms, Gensler has maintained a tight-lipped stance on the SEC’s approach to spot Bitcoin ETFs.
In fact, he upheld his confrontational stance against crypto “hucksters” during congressional testimony on September 27, choosing not to address the industry’s pressing questions. Gensler argued that digital asset companies had been recklessly handling customer assets, fueling further speculation about the SEC’s intentions in the evolving cryptocurrency landscape.