On September 13, Nasdaq executive Giang Bui commented on the early dismissal of BlackRock’s planned spot Bitcoin BTC 0.84% ETF, stating that it should not impact its eventual success. BlackRock had filed an application for this ETF on June 15. While BlackRock utilized Form S-1 for its product registration, Nasdaq was in charge of filing Form 19-b4, which suggests the necessary rule changes for product listing. The U.S. Security and Exchange Commission (SEC) deemed the latter filing, among others, insufficient on June 30, leading to its premature rejection. This decision was more about regulatory procedural matters than the product’s substance or potential viability. Giang Bui emphasized that such early rejections might not be negative for the applicants. After this initial denial, Nasdaq and other entities filed updates for different ETF applications, specifically naming Coinbase as a partner in a surveillance-sharing agreement. Bui recognized this move, noting that it’s uncommon to list partners in this manner. However, she mentioned that this late addition was an effort by Nasdaq to make its filing as robust as possible.
Regulatory Procedures vs. Product Viability: The SEC’s early rejection of BlackRock’s Bitcoin ETF was based on procedural issues rather than the product’s potential success. This distinction is crucial for stakeholders and potential investors to understand, as it highlights the complexities of navigating the regulatory landscape.
Role of Partnerships in ETF Applications: The explicit mention of Coinbase as a surveillance-sharing agreement partner in updated ETF applications underscores the importance of partnerships in strengthening such filings. It also indicates the evolving dynamics between traditional financial institutions and emerging crypto platforms.
Growing Interest in Bitcoin ETFs: BlackRock’s application is just one among many. With multiple entities, including Nasdaq, handling similar proposals and the SEC set to decide on certain filings soon, the landscape for Bitcoin ETFs is rapidly evolving, indicating a growing mainstream interest in cryptocurrency investment vehicles.
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In a recent statement, Giang Bui, a notable executive at Nasdaq, shed light on the early dismissal of BlackRock’s planned spot Bitcoin ETF. Bui emphasized that the rejection should not deter its eventual success, suggesting that the procedural nature of the decision was not an indicator of the product’s potential viability.
BlackRock, a global investment management corporation, had filed an application for a spot Bitcoin exchange-traded fund (ETF) on June 15. As part of the application process, while BlackRock used Form S-1 to register its product, the responsibility for filing Form 19-b4 fell on Nasdaq. This form proposes the necessary rule changes required to list the product.
However, on June 30, the U.S. Security and Exchange Commission (SEC) found the latter filing, along with several others, to be inadequate. This led to its early rejection. But rather than being a reflection on the product’s substance, this decision was rooted more in regulatory procedural challenges.
Addressing this, Giang Bui, Nasdaq’s Head of U.S. Equities & ETPs, provided clarity in a conversation. She stated, “Once the exchange files [19-b4], the SEC has seven business days to reject it if it determines that it doesn’t comply with the SEC rules related to form. The rejection at that stage is purely procedural, rather than an indication of the viability of the product.”
Following this initial setback, Nasdaq, along with other institutions, filed updates for various ETF applications. Interestingly, these updated filings explicitly listed Coinbase, a major cryptocurrency exchange, as a surveillance-sharing agreement partner. Bui acknowledged this move, noting its unusual nature. However, she also pointed out that the late addition of such partners was a strategic move by Nasdaq to bolster its filing, aiming to make it “as strong as possible.”
It’s worth noting that BlackRock’s proposed spot Bitcoin ETF isn’t alone in its category. Nasdaq is concurrently managing a similar proposal from Valkyrie Investments. Additionally, other exchanges, such as Cboe, are overseeing proposals from various asset management giants, including Ark Invest, VanEck, WisdomTree, Invesco, and Fidelity. NYSE Arca is also in the process of reviewing an ETF proposal from Bitwise. Many of these proposals share similarities, especially in their mention of a surveillance-sharing agreement with Coinbase.
