U.S. SEC Delays Prediction Market ETF Launches Again Amid Extended Review

The U.S. Securities and Exchange Commission (SEC) has again delayed the launch of the prediction market ETFs, seeking more time to review the filings. Bloomberg analyst Eric Balchunas explained why the SEC was taking additional time to review these filings and described the introduction of these funds as “groundbreaking.”

SEC Delays Prediction Market ETFs For More Time To Review Filings

In an X post, Balchunas noted that the SEC had again delayed the prediction market ETFs, with these funds no longer set to launch today as planned. He explained that the SEC wants more time to review the filings and that the delay doesn’t appear to be “lethal” but simply them double-checking the disclosures.

The Bloomberg analyst added that these funds are “groundbreaking” and that their launch will set a precedent, which explains why the SEC wants a little more time to review them. These ETFs seek to tap into the fast-growing prediction markets industry and will notably be the first of their kind.

As CoinGape reported, the SEC delayed the launch of these funds last week, urging issuers to share more details about how they will operate. Asset managers Roundhill Investments, Bitwise, and GraniteShares have all filed to launch this fund, which will be tied to markets on platforms such as Polymarket and Kalshi.

Specifically, Roundhill has filed for six funds that will cover election markets for the President, Senate, and House. Bitwise has also filed to offer a similar fund, as well as funds that track the recession, oil, and crypto markets. GraniteShares’ proposed fund also focuses on election bets.

A “Mistake” If The SEC Approves These Funds

Joe Saluzzi, co-founder of Themis Trading, said that an SEC approval of these prediction market ETFs would be a “big mistake.” This came as he questioned who would monitor the underlying prediction markets to curb against market manipulation.

Saluzzi also questioned whether any cross-market surveillance agreements were in place. “This is just ridiculous,” he concluded. Despite such backlash, SEC Commissioner Hester Peirce’s speech signaled that the commission has no intention to obstruct these prediction market ETFs from launching.

The SEC Commissioner remarked that they cannot block an ETF from going to the market as long as the sponsor adheres to the rules, gets their disclosures right, and finds an exchange to list them. She also said they should be careful, even though they have the authority to act in response to new market developments, because regulations often impose “heavy and persistent costs.”