International investment bank TD Cowen believes that the U.S. Securities and Exchange Commission (SEC) will approve a Bitcoin spot ETF in order to avoid facing and losing a lawsuit if it vetoes the Bitcoin spot ETF, and to prove that existing regulations are sufficient to regulate cryptocurrencies.
SEC to approve Bitcoin spot ETF due to political concerns
The Block cited a report from international investment bank TD Cowen, saying that the SEC will approve at least one Bitcoin spot ETF before January 10 for the following reasons.
Political considerations
The SEC will approve ETFs for political considerations, to avoid Congress from further enacting separate laws for encryption, and to consolidate the status of encryption regulators.
The creation of separate legislation also seems to contradict SEC Chairman Gary Gensler’s consistent statement that existing laws are sufficient for regulation.
If you refuse, you may be involved in litigation and lose the case.
TD Cowen believes that if it refuses approval, the SEC may face litigation with the issuer and may lose the lawsuit.
Given that the SEC has previously lost the Grayscale case, the SEC will try its best to prevent similar incidents from happening again.
(Read more about SEC logic loopholes! Why the court believed the SEC’s rejection of Grayscale’s spot ETF application was unreasonable)
January 10 is the deadline for the SEC to make a final decision on whether to approve applications for Bitcoin spot ETFs from companies such as ARK Investment and 21Shares. The SEC may also rule on other similar applications at that time. There are more than a dozen ETF issuers, including BlackRock and Fidelity.
Republicans lead encryption bill
In addition to the focus on Bitcoin spot ETFs, the focus on crypto policy over the past year has also included Republican-led bills. One bill seeks to regulate stablecoins at the federal level, while the other takes a comprehensive regulatory approach to crypto market structures.
According to TD Cowen, there is still an opportunity to reach a crypto market structure bill during the “lame duck” period (i.e. the time between elections and the inauguration of a new government). Since House Financial Services Committee Chairman Patrick McHenry is leaving office, he will want to get this done during his term.
If the Crypto Market Structure Act fails to pass, the Stablecoin Act will become McHenry’s backup plan.
(Is there a chance that crypto assets will become commodities? The draft discussion on the digital asset market structure will be held at a hearing next week)
This article International Investment Bank: SEC will approve Bitcoin spot ETF in order to avoid a recurrence of Grayscale case failure first appeared on Chain News ABMedia.
