SEC Delays Decision on Spot Bitcoin ETFs Due to U.S. Government Shutdown Concerns

The Securities and Exchange Commission (SEC) of the United States has recently announced the postponement of its decision regarding several proposals for spot Bitcoin exchange-traded funds (ETFs). This decision impacts applications from well-known entities such as BlackRock, Invesco, Bitwise, and Valkyrie, as stated in separate filings made on September 28.

The surprise delay, which came two weeks earlier than the anticipated deadline between October 16–19, has left many applicants puzzled. Analysts, including James Seyffart from Bloomberg ETFs, suggest that the applications submitted by Fidelity, VanEck, and WisdomTree might face similar delays.

The timing of these delays is directly linked to the looming shutdown of the United States government, expected to commence on October 1 or possibly even earlier, according to James Seyffart. This situation is poised to disrupt various federal agencies, including financial regulators.

This means we are expecting all #Bitcoin ETF’s squared in Magenta to get their Delay orders today or tomorrow. (these are early due to the govt shutdown)

The SEC’s decision to postpone a significant number of spot Bitcoin ETF applicants was initially made at the end of August, just as the first deadline was approaching. Market participants now await the SEC’s decision, which is expected no later than the middle of March.

The Securities and Exchange Commission’s decision to postpone the evaluation of spot Bitcoin ETF applications has sent ripples through the cryptocurrency and financial markets. These ETFs are highly anticipated by both institutional and retail investors, as they would provide a regulated and accessible way to invest in Bitcoin.

The delay, however, is not merely a bureaucratic decision. It is rooted in the practical concerns of the potential U.S. government shutdown. This shutdown, if it occurs, could disrupt the normal functioning of various federal agencies, including the SEC. As a result, the SEC has opted to defer its decisions on these crucial ETF applications to ensure that they are made under stable and secure conditions.

The news of the SEC’s decision has had a mixed impact on the cryptocurrency market. On one hand, it reflects the SEC’s cautious approach to approving Bitcoin-related financial products, which has been a consistent theme in recent years. On the other hand, market participants were hopeful that these ETFs would bring more institutional money into the cryptocurrency space, potentially driving up prices.

Investors in cryptocurrency-related assets, including Bitcoin, have been closely watching the ETF approval process. The delay has introduced uncertainty into the market, which often responds negatively to such uncertainties. Bitcoin’s price experienced a slight dip in response to the news, but the full extent of the market’s reaction remains to be seen.

The SEC’s decision to postpone the evaluation of spot Bitcoin ETFs due to concerns about a potential U.S. government shutdown has added another layer of complexity to the cryptocurrency regulatory landscape. While it is a temporary setback, it underscores the regulatory challenges that cryptocurrencies face as they continue to gain mainstream attention.

Market participants will closely monitor developments surrounding these ETF applications and the U.S. government’s funding situation. The decision expected by mid-March will provide clarity on whether these ETFs will finally become a reality. In the meantime, the cryptocurrency market will continue to evolve, with or without the ETFs, as it matures and adapts to changing regulatory dynamics.

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Bank of Russia Delays CBDC Pilot Rollout

The Bank of Russia’s central bank digital currency (CBDC) pilot, which was scheduled to begin on April 1, has been delayed indefinitely due to specific legislation only passing through the first reading in the Federal Assembly’s lower house. The legislation is expected to be enacted by early May, according to a report by the state-owned TASS.

The CBDC pilot was initially set to involve 15 private banks, but the number has since been reduced to 13. Some of the employees from these banks, along with one of the country’s largest insurance companies, Ingosstrakh, will become the test participants for CBDC retail payments.

Bank executives have expressed enthusiasm for the project, with the director of innovations at Sinara Bank, Vitaly Kopysov, stating that “the use of smart contracts should reduce the operational load of banks and make the deals transparent, which not only will reduce the chances of the misuse of government and banks’ funds, but ultimately simplify the control over the existing contracts.”

Although the pilot will involve real operations and limited consumers, the general public will be unable to participate in the first stage. The banks will enter the pilot with selected customers, and the Bank of Russia will determine how to scale the digital ruble further following the first stage.

The CBDC pilot was initially scheduled for 2024, but it was moved to an earlier date as the Russian central bank sought an alternative to the SWIFT payments system amid Western economic sanctions against Russia. The digital ruble aims to provide a secure and transparent payment system that reduces the dependence on foreign payment systems and minimizes the risk of financial crimes.

The Bank of Russia has been working on the development of the digital ruble since 2019, and it aims to provide an efficient payment system that can be used for various transactions. The CBDC will be a legal tender that will function similarly to traditional cash, but it will be digital and operate on a blockchain network.

The delay in the CBDC pilot rollout is expected to be a temporary setback, as the Bank of Russia remains committed to implementing the digital ruble. The CBDC will provide a secure and efficient payment system that will benefit the economy and the financial system as a whole.


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FTX Founder’s Lawyers Consider Delaying Criminal Trial

Lawyers representing Sam Bankman-Fried, the founder of FTX, have suggested that they may need to delay his criminal trial due to a lack of evidence from the DOJ. In a letter to United States District Judge Lewis Kaplan, Bankman-Fried’s lawyers stated that they are still waiting for a “substantial portion” of evidence to be turned over to them and that more charges had been laid against the FTX founder in late February.

The criminal trial, which is scheduled to begin on October 2, will focus on fraud charges brought by the DOJ. Bankman-Fried’s lawyers have not formally requested a date change, but they have stated that it may be necessary. According to the letter, prosecutors from the DOJ are holding evidence from devices belonging to Caroline Ellison, the former CEO of FTX’s sister trading firm Alameda Research, and Zixiao “Gary” Wang, an FTX co-founder. Both Ellison and Wang have pleaded guilty to fraud charges and are cooperating with the DOJ.

Bankman-Fried’s lawyers have stated that they are also waiting for contents from “computers belonging to two other former FTX/Alameda employees.” They anticipate that the evidence from these devices “will be voluminous and critically important to the defense.”

The letter also noted that Bankman-Fried was hit with new charges relating to conspiracy and fraud when a superseded indictment was unsealed on February 22. The number of charges against him was bumped up from eight to twelve. Bankman-Fried had previously pleaded not guilty to the original eight charges that were brought against him in December.

The delay in evidence being handed over to Bankman-Fried’s lawyers could have significant implications for the trial. If the defense does not receive the evidence it needs to prepare its case, it may be forced to request a delay. This would mean that the trial would not begin as scheduled on October 2.

The criminal trial against Bankman-Fried has attracted significant attention in the crypto industry. FTX is one of the fastest-growing crypto exchanges in the world, and Bankman-Fried is seen as a leading figure in the industry. The outcome of the trial could have implications for the regulation of the crypto industry, as well as for the future of FTX.


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