Franklin Templeton Applies for Bitcoin ETF Amid SEC Delays and Grayscale’s Bid

By 0xGorki 09/12/23 2:59 PM

Asset management giant Franklin Templeton officially submitted an application to the United States Securities and Exchange Commission (SEC) on September 12th, seeking approval for a Bitcoin (BTC) spot exchange-traded fund (ETF). The move comes in the wake of a series of delays and growing anticipation within the cryptocurrency industry for the first-ever spot crypto ETF.

Franklin Templeton’s application follows closely on the heels of the SEC’s decision to postpone rulings on similar applications from several other prominent players in the financial sector, including WisdomTree, Valkyrie, Fidelity, VanEck, Bitwise, and Invesco’s BTC spot ETF proposals, which were all set for review on August 31st. Furthermore, a notable court ruling on August 29th added to the regulatory scrutiny, stating that the SEC must consider Grayscale’s application to convert its Bitcoin futures ETF into a spot ETF.

The structure of Franklin Templeton’s proposed ETF is as a trust, with Coinbase earmarked as the entity responsible for custodianship of the Bitcoin holdings. Meanwhile, the Bank of New York Mellon has been designated as the cash custodian and administrator of the trust. This arrangement aims to instill confidence in investors by leveraging the reputations and established expertise of these two financial institutions.

Should the SEC grant approval for Franklin Templeton’s Bitcoin ETF, shares of the fund will be made available for trading on the Cboe BZX Exchange, a well-known and trusted trading platform. To determine Bitcoin’s pricing, the filing indicates a reliance on the CME’s CF Bitcoin Reference Rate – New York Variant, reinforcing the commitment to transparency and industry-standard pricing methodologies.

The cryptocurrency community and institutional investors alike have been eagerly awaiting the SEC’s decision on the first-ever spot crypto ETF. Despite the growing popularity and acceptance of cryptocurrencies, the regulatory landscape remains a challenging and evolving one. The SEC’s cautious approach reflects its need to carefully navigate the complexities of this nascent industry and ensure that any new financial products meet the necessary standards for investor protection and market integrity.

This latest move by Franklin Templeton underscores the determination of asset managers to offer crypto exposure through traditional investment vehicles, despite the regulatory hurdles. While the SEC’s recent decision to delay rulings on spot Bitcoin ETF proposals may be seen as a setback, it is essential to recognize that such delays are part of the due diligence process. Regulators must meticulously review applications to safeguard the interests of investors and the stability of financial markets.

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