In a bipartisan effort, Representatives Mike Flood and Wiley Nickel are urging the U.S. Securities and Exchange Commission (SEC) to greenlight options trading on Spot Bitcoin ETFs. These lawmakers have written a letter addressed to SEC chair Gary Gensler, pushing him to consider their request.
SEC Chair Gary Gensler Under Pressure To Approve Bitcoin ETF Options
The significance of this push lies in the delay issuers have faced in launching options following the historic approval of Spot Bitcoin ETFs in January. The ETFs secured the SEC approval following a long delay that too after a court ruling. Now, Flood and Nickel are adamant that the SEC doesn’t perpetuate discrimination against these newly established funds.
Expressing the critical nature of approving options trading on Bitcoin ETFs, the letter emphasizes its importance to the investors whom the SEC aims to safeguard. Flood and Nickel, representing both Republican and Democrat perspectives, underscore the need for prompt action. Moreover, they also encourage a transparent explanation for treating options for Bitcoin futures ETFs differently from Spot Bitcoin ETFs.
According to a report by Axios, the letter sent to Gensler read, “We urge you, without delay, to approve options on spot Bitcoin ETPs or to provide an explanation for the Commission’s difference in treatment between options for Bitcoin futures ETFs—which are currently trading—and options for the spot Bitcoin ETPs.”
Also Read: U.S. Bitcoin ETF Outflows Jump Past $560 Million, More Pain Ahead?
Will CFTC Be Involved?
The broader context reveals a disparity in the approval process between market stock ETFs. The stock ETFs typically see options trading approval shortly after launch while commodity trust-based fund face a more intricate and prolonged process. This complexity arises from the necessity of obtaining approval from multiple government agencies, including the Commodity Futures Trading Commission (CFTC).
Moreover, insiders close to the matter anticipate the CFTC to pose the primary obstacle rather than the SEC. The CFTC’s involvement in approving such products also stems from the recent contradiction from the SEC over the Ethereum (ETH) controversy. Hence, it remains to be seen if the CFTC and the SEC would collaborate on deciding whether the Bitcoin ETF options should be approved or not.
Also Read: European Bank With $600B AUM Invests In BlackRock Bitcoin ETF
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