The U.S. Securities and Exchange Commission (SEC) is reportedly in active discussions with several companies that have filed applications for a spot Bitcoin exchange-traded fund (ETF). According to Bloomberg, the SEC has been sending feedback and holding private meetings with applicants to address some of the concerns and challenges that have prevented the approval of a Bitcoin ETF so far.
A spot Bitcoin ETF would track the price of the underlying asset directly, unlike futures-based ETFs that track contracts that bet on the future price of Bitcoin. Many investors and experts believe that a spot Bitcoin ETF would be more beneficial for the crypto market, as it would provide more exposure, liquidity and transparency.
However, the SEC has been reluctant to approve a spot Bitcoin ETF, citing issues such as market manipulation, custody, valuation and investor protection. The regulator has repeatedly delayed or rejected applications for a spot Bitcoin ETF, while approving several futures-based ETFs in October.
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The Bloomberg report suggests that the SEC is not completely opposed to a spot Bitcoin ETF, but rather wants to ensure that the applicants meet the high standards and requirements that the regulator has set. The report also indicates that the SEC is open to dialogue and feedback from the applicants, and that some of the issues could be resolved in the near future.
Some of the companies that have filed for a spot Bitcoin ETF include VanEck, WisdomTree, NYDIG, Valkyrie and Bitwise. These companies have been waiting for months or even years for a response from the SEC, and some of them have expressed frustration and disappointment with the regulator’s approach.
However, the Bloomberg report could signal a positive development for the prospects of a spot Bitcoin ETF in the U.S., as it shows that the SEC is actively engaging with the applicants and not dismissing their proposals outright. While there is no guarantee that the SEC will approve a spot Bitcoin ETF anytime soon, the report could boost the hopes and expectations of the crypto industry and investors.
SEC asks judge to deny Coinbase motion to dismiss its lawsuit
The Securities and Exchange Commission (SEC) has filed a motion to oppose Coinbase’s request to dismiss the lawsuit that the agency brought against the cryptocurrency exchange in September 2021. The SEC claims that Coinbase violated federal securities laws by offering a lending program that involved digital assets.
The lawsuit stems from Coinbase’s announcement of a product called Lend, which would allow users to earn interest on their crypto holdings by lending them to other users. The SEC alleges that Lend involved the sale of unregistered securities, namely the contracts that promised interest payments. The SEC also accuses Coinbase of failing to disclose material information about the risks and rewards of the program, as well as the identity and qualifications of the borrowers.
Coinbase, on the other hand, argues that Lend did not involve securities, but rather simple loans that were fully collateralized and subject to consumer protection laws. Coinbase also asserts that it cooperated with the SEC and sought guidance from the agency before launching the product but received no clear answer. Coinbase claims that the SEC’s lawsuit is an attempt to stifle innovation and competition in the crypto industry, and that it violates due process and fair notice principles.
In its motion to dismiss, Coinbase contends that the SEC has failed to state a plausible claim for relief, and that the court should dismiss the lawsuit for lack of jurisdiction and failure to state a claim. Coinbase also requests that the court grant it leave to amend its complaint if the motion is denied.
The SEC’s opposition motion, filed on October 3, 2023, challenges Coinbase’s arguments and asks the court to deny the motion to dismiss. The SEC maintains that Lend involved securities, and that Coinbase did not comply with the registration and disclosure requirements of the securities laws. The SEC also disputes Coinbase’s allegations of cooperation and lack of clarity and asserts that it has jurisdiction and authority to enforce the securities laws against Coinbase.
The motion is now pending before Judge Richard Seeborg of the U.S. District Court for the Northern District of California. The court has scheduled a hearing on the motion for November 15, 2023. The outcome of the motion could have significant implications for the future of crypto lending and regulation in the U.S.