The U.S. Securities and Exchange Commission (SEC) has postponed its decision on Franklin Templeton's application to introduce a crypto index exchange-traded fund (ETF) offering exposure to Bitcoin and Ethereum until January 6, 2025.
SEC's Delayed Decision
Originally, the SEC had a 45-day deadline to reach a decision, ending on November 22. However, under Section 19(b)(2) of the Securities Exchange Act of 1934, the SEC can extend this period by up to 90 days if it determines that additional time is needed to thoroughly assess the rule change and address any related concerns.
Expanding ETF Ecosystem
Brazilian asset manager Hashdex filed an application in June to launch its own crypto index ETF. The proposed Hashdex Nasdaq Crypto Index US ETF would also track Bitcoin and Ethereum. Simultaneously, various U.S. asset managers are seeking regulatory approval for ETFs that track other cryptocurrencies, including XRP, Solana, Hedera, and Litecoin.
Regulatory Role and Impact of Presidential Elections
The reelection of Donald Trump has sparked optimism across financial markets, with many firms expecting a more favorable regulatory climate for the crypto industry in the coming months. Meanwhile, U.S. regulators have recently granted final approval for the launch of options trading on spot Bitcoin ETFs, including BlackRock’s IBIT, Bitwise’s BITB, and Grayscale’s GBTC. The debut of IBIT options trading saw volumes soar to nearly $2 billion on the first day, with analysts describing the performance as extraordinary.
The SEC's decision to delay its ruling on Franklin Templeton's application underscores the complexity of regulating new financial instruments, highlighting the need to balance innovation with investor trust.
