SEC Progresses Towards Spot Bitcoin ETF Approval With 19b-4 Amendment Filings

Here are some of the major developments in the world of cryptocurrencies over the past few days.
Some of the major developments from the world of crypto
Some of the major developments from the world of crypto

As the week concludes, the United States Securities and Exchange Commission (SEC) appears to be moving closer to approving a spot Bitcoin exchange-traded fund (ETF). Eleven applicants for spot Bitcoin ETFs have submitted 19b-4 amendment forms, signalling a crucial stage in the SEC approval process. Major asset managers, including BlackRock, Valkyrie, Grayscale, and others, filed these amendments on January 5, setting the stage for potential regulatory approval of a spot Bitcoin ETF valued at $43,641. The completion of S-1 documents is now essential for the U.S. exchanges to list investment securities directly linked to cryptocurrency exposure, marking one of the final stages in the approval process.

Speculation is rife among experts, with indications suggesting that the final approval for spot Bitcoin ETFs might come before January 10, coinciding with the deadline for an offering from ARK Invest and 21Shares. Such an approval could catalyze greater adoption of cryptocurrencies in the U.S. and globally. Bloomberg ETF analyst Eric Balchunas expressed optimism, indicating that the SEC is nearing approval, with the final S-1 submissions expected on Monday, aligning with a potential January 11 launch. However, a more cautious sentiment prevails among U.S. financial advisers, as highlighted in a recent Bitwise survey where only 39% believe a Bitcoin ETF will be approved in 2024.

Approving Bitcoin ETF Would Be a 'Historic Mistake': Better Markets CEO

The CEO of the non-profit organization Better Markets, Dennis M. Kelleher, has urged the United States Securities and Exchange Commission (SEC) not to approve a spot Bitcoin exchange-traded fund (ETF), stating it would be a "grave" and potentially "historic mistake." In a letter addressed to SEC Secretary Vanessa Countryman on January 5, Kelleher argued that approving the spot Bitcoin ETF could expose investors to significant risks, including the potential for fraud and manipulation within the crypto market. Kelleher emphasized the potential harm to investors, asserting that approval would be a deviation from the core principles of the regulatory body.

This call against approval comes amidst rising concerns about fraud and phishing scams in the crypto industry, with over 324,000 users falling victim to such scams in 2023, resulting in approximately $295 million in digital assets lost. While Kelleher's stance is met with criticism from some prominent crypto commentators, including Bloomberg ETF analyst James Seyffart, the debate intensifies as 11 spot Bitcoin ETF applicants submitted 19b-4 amendment forms, marking one of the final stages in the SEC approval process. The regulatory body has until January 10 to make a decision on the spot Bitcoin ETF applications.

Digital Currency Group confirms settling $700M of debt with Genesis

Digital Currency Group (DCG) has confirmed the settlement of $700 million in debt with the now-defunct crypto lending platform Genesis. Barry Silbert, CEO of DCG, announced the successful fulfilment of all short-term loans currently due, totalling over $1 billion paid to creditors in just over a year. Despite challenges in the crypto market throughout the year, DCG managed to repay these debt commitments, with Silbert emphasizing the accomplishment of repaying over $1 billion, including the recent $700 million to Genesis.

The settlement follows a November 2023 agreement reported by Cointelegraph, where DCG committed to repaying all outstanding loans to Genesis by April 2024. This arrangement aimed to resolve a lawsuit initiated by Genesis in September, seeking repayment of overdue loans amounting to approximately $620 million. Genesis had filed for bankruptcy in January, following the suspension of withdrawals in November 2022, leaving the company with over $3.5 billion in debt to its top 50 creditors, including notable firms like Gemini and VanEck’s New Finance Income Fund.

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