SEC Looks to Enhance Control by Trimming Intermediaries in Spot Bitcoin ETFs Bloomberg analyst Eric Balchunas
has shared insights on the latest requirements imposed by the U.S. Securities and Exchange Commission (SEC) to regulate the involvement of third parties in Spot Bitcoin ETFs through a “cash-create” redemption model. The SEC has set a deadline of December 29, 2023,
for spot Bitcoin exchange-traded fund (ETF) applicants to submit the final S-1 amendment. Other deadline requirements
include issuers entering into agreements with Authorized Participants (APs) and specifying the cash-create or in-kind redemption models
that will be employed. In a thread post on X,
Balchunas highlighted the significance of the S-1 Amendment deadline for ETFs and the challenges tied to identifying APs for approval. He pointed out that the SEC not only demands APs to be named in the documents but also to serve as underwriters, guaranteeing the issuance of new
ETF shares to the market. This additional requirement raises concerns among potential APs,
given the novelty of the asset class and potential legal risks.
