SEC Chair Gary Gensler stated on Wednesday that the Securities and Exchange Commission (SEC) has not yet determined its response to a recent court ruling regarding spot Bitcoin exchange-traded funds (ETFs). The court decision found that the SEC had made an error in rejecting applications for these ETFs. However, the possibility of a government shutdown adds further complications to the situation.
During a House Financial Services Committee hearing, Gensler confirmed that the agency is actively considering the appellate court’s decision. He emphasized that he did not want to preempt the decisions made by the staff or his fellow commissioners.
However, the looming possibility of a government shutdown may further delay any definitive action taken on this matter.
The Future of Bitcoin ETFs in Light of Potential Government Shutdown
The fate of several Bitcoin exchange-traded fund (ETF) applicants hangs in the balance as the Securities and Exchange Commission (SEC) faces a mid-October deadline to decide whether it will appeal the Grayscale decision. However, the possibility of a government shutdown adds further uncertainty to the equation.
SEC’s Dilemma
SEC Chair, Gary Gensler, has warned that a potential shutdown would force the agency to furlough approximately 92% of its staff, prioritizing only the most critical tasks. Consequently, many pending Bitcoin ETF applications have already been delayed until 2024, contrary to the SEC’s usual practice of addressing them promptly.
Delays and Hurdles
Even if the SEC were to grant approval in October, fund companies would still need to navigate the process of filing prospectuses and other necessary documents with the SEC. Unfortunately, this can be a time-consuming endeavor that could further postpone the debut of Bitcoin ETFs in 2023.
Uncertain Outlook
While the SEC may face limitations in preventing the arrival of Bitcoin ETFs, a government shutdown would considerably diminish the likelihood of these products hitting the market in 2023.