Bitcoin ETF: US SEC Acknowledges Pando’s Application

Three weeks after putting out its application for a spot Bitcoin ETF, the United States Securities and Exchange Commission (SEC) has finally acknowledged Pando Asset AG’s filing.

Pando Bitcoin ETF Moves Through Regular Approval Phase

In a recent post, James Seyffart, a senior Bloomberg ETF analyst who has been following up on the spot Bitcoin ETF movement since BlackRock filed its application, confirmed that the SEC has recognized the filing made by Swiss firm Pando. Markedly, this acknowledgment does not imply that the agency has greenlighted the application, it is rather, the standard practice as pointed out by Seyffart.

Most applicants also got such attention, indicating that their request had been received for processing by the SEC. After this stage, many of the applicants have moved further to other updated processes that still did not suggest approval. BlackRock and Grayscale Investments have attended several meetings with the SEC’s Trading and Markets division. 

Last month, BlackRock met with officials from the SEC to discuss the redemption mechanism for the proposed ETF product. The SEC is promoting a cash model summary over an “in-kind” redemption model but it looks like BlackRock prefers the latter. BlackRock believes that the in-kind model presents the cleanest structure for its associated asset managers and ultimately, the end investors.

Some other subjects were discussed in subsequent meetings as both parties had allegedly met four times. Fidelity Investments equally had a conversation with the SEC’s Trading and Markets division at the beginning of December. 

Like BlackRock, Fidelity also touched on the subject of in-kind redemption mechanisms in comparison to cash creates. On the other hand, Grayscale’s meeting with the SEC focused on the discussion of the execution of a Transfer Agency and Service Agreement with BNY Mellon for its spot Bitcoin ETF amongst other things.

BTC ETF Applicants Updating Filings

In line with the meetings between the SEC and some of these asset management firms, many of them have submitted updated versions of their spot Bitcoin ETF filings, taking note of intricate details like custody arrangements, creation and redemption mechanisms, and investor risk disclosures. 

While this may not be an assurance of a nod from the regulator, a number of these moves give observers the perception that the SEC is actively working on making a decision, in this case, an approval.

Notably, the next approval window is slated for mid-January, and approval odds are pegged at 90%.