US SEC delays decision on crypto ETFs

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Despite having almost a year to determine whether or not cryptocurrency exchange-traded funds (ETF) should be allowed, the U.S. Securities and Exchange Commission (SEC) still can’t make up its mind. Several proposed rule changes to allow the funds are being considered by the commission and responses were expected to start rolling in at any time. However, the crypto community is going to have a wait a little longer.

The first proposal was submitted by Bitwise Asset Management and the NYSE Arca exchange. It was published on February 15, which launched the initial 45-day window for the SEC to make a decision. However, per SEC guidelines, the commission can announce an extension of up to 240 days if it feels it needs more time at which time it is required to issue its decision for or against the change. The SEC announced (in pdf) last Friday that it isn’t ready to rule yet and will spend the next 45 days considering the proposal. 

According to the SEC’s statement, “The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act, 6 designates May 16, 2019 as the date by which the Commission shall either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change (File No. SR-NYSEArca-2019-01).”

Another ETF has been waiting to find out its fate with the SEC, as well. The VanEck/SolidX ETF, which was created in conjunction with the CBOE exchange, has been around for almost a year. After several delays on the part of the SEC to rule on the proposal, CBOE withdrew its requested proposal amid a government shutdown earlier this year and resubmitted it a few days later. That had reportedly given everyone involved time to discuss the ETF with the SEC and tweak the application, but the SEC still isn’t ready to move forward.

In extending the consideration period for the VanEck/GlobalX ETF, the SEC didn’t offer any explanation regarding why it needed more time. It used a boilerplate announcement (in pdf), adding that it will make a decision by May 21. 

The delays may not be a shock to most individuals. It was reported just over a week ago that many of the comments received by the SEC regarding the ETFs have been negative, with several respondents asserting that the proposals shouldn’t be approved.