Hashdex Discusses Bitcoin ETF with SEC
Hashdex, the investment management company, recently held discussions with the U.S. Securities and Exchange Commission (SEC) to address concerns raised by the regulator regarding its application for a spot Bitcoin ETF.
Asset management firm Hashdex recently met with the United States Securities and Exchange Commission (SEC) to tackle the regulator’s worries about its request to permit the inclusion of spot Bitcoin in the Hashdex Bitcoin Futures exchange-traded fund (ETF).
According to an official familiar with the situation, this meeting took place on October 13 and was attended by six SEC officials, along with representatives from Hashdex, NYSE Arca, Tidal Financial Group, and the law firm K&L Gates.
During the meeting, Hashdex presented its approach to facilitate the trading and retention of spot Bitcoin within the ETF on the Chicago Mercantile Exchange (CME), a platform overseen by the Commodity Futures Trading Commission.
A key concern raised by the SEC in explaining its delay or rejection of spot Bitcoin ETF applications is the lack of regulation. The SEC’s argument points to the regulated nature of the Futures market, overseen by the Chicago Mercantile Exchange (CME), as opposed to the unregulated nature of the spot market.
In response to this challenge, crypto asset manager Hashdex has devised an ETF that addresses this issue. As outlined in their filing, the ETF will adopt a strategy of acquiring physical Bitcoin from CME exchanges rather than spot exchanges. This unique approach distinguishes Hashdex from other applicants, as it would not depend on Coinbase for the SSA (surveillance-sharing agreement).
Applauding this strategy, Bloomberg ETF analyst James Seyfart described the ETF as undoubtedly suitable for SEC approval in a tweet:
“In the event that the SEC finds a way to deny all other #Bitcoin ETFs (not my base case) Hashdex’s application is tailored to every argument SEC has made in the past. I don’t think they’ll be able to deny this one.”
The presentation given to SEC officials in this month’s meeting reveals that the strategy is also grounded in the Commission’s Teucrium Order, affirming the maturity of the Bitcoin futures market for supporting financial products aiming to track BTC.
As a result, the SEC might seek additional details before the initial deadline of November 17, according to the individual familiar with the situation.
If all goes well, Hashdex might even beat BlackRock to launch the first spot Bitcoin ETF.
As BlackRock is considered a front-runner in the competition for a spot Bitcoin ETF, any developments related to it tend to influence the market. This influence was evident during the recent surge in Bitcoin’s value when BlackRock’s ETF application was detected on the clearing house DTCC listing.
According to analysts, “the current consensus view is that the SEC will approve all spot ETFs within three months.”
