SEC Delays Approval of Hashdex ETF Combining Bitcoin and Ethereum

The US Securities and Exchange Commission (SEC) has decided to delay the approval verdict on a dual crypto spot ETF proposed by Brazilian asset manager Hashdex due to a crucial deadline in the approval process of the investment fund.

The Nasdaq Stock Exchange Market submitted an application to the SEC on June 17, requesting a rule change to allow the listing of a combined Bitcoin and Ethereum ETF named the Hashdex Nasdaq Crypto Index US ETF. This unique dual ETF is set to comprise 70.54% Bitcoin and 29.46% Ethereum, with the remaining portion allocated for operational expenses.

The Hashdex mixed crypto spot ETF is also open to the inclusion of other assets that meet specific criteria and qualifications. Notably, American exchange Coinbase and cryptocurrency trust BitGo have been designated as custodians for the assets invested in this fund.

As per the Securities Exchange Act, the SEC is required to provide a response on commodity-based trust shares applications within 45 days of filing. However, the Act allows for a 90-day extension if necessary, provided that the decision to extend is made within the initial 45-day period.

In a brief on August 9, the SEC announced the postponement of its response to the Hashdex Nasdaq Crypto Index ETF. While the reasons for this delay were not explicitly stated, the Commission expressed the need for additional time to thoroughly evaluate all aspects of the proposed investment fund. Consequently, the SEC is now expected to deliver its approval or disapproval decision by September 30, shifting from the previous deadline of August 16.

On a separate note, the Chicago Board Options Exchange (CBOE) has resubmitted its application for Bitcoin ETF options to the SEC. Bloomberg analyst James Seyffart highlighted that the new application is 29 pages longer than the previous one, suggesting ongoing discussions between the exchange and the Commission. The timing of the SEC’s response could potentially impact the approval deadline, potentially extending it to April 25 if delayed. However, if communication is already established between the parties, this scenario may not materialize.

Bitcoin ETF options are financial derivatives that grant investors the right, but not the obligation, to buy or sell shares of a Bitcoin ETF at a predetermined price before a specified expiry date. These options are commonly used for hedging against price fluctuations and speculating on price movements.