Asset giant BlackRock has warned in its updated Bitcoin spot ETF application filed on the 4th that Bitcoin could be classified as a security by the U.S. Securities and Exchange Commission (SEC), state regulatory agencies, or courts. If that happens, it will have a direct substantial negative impact on the trading value of Bitcoin and Bitcoin spot ETF.
BlackRock’s Bitcoin spot ETF application has recently made positive progress. First, it was reported that BlackRock had a meeting with the SEC at the end of last month to discuss listing-related details. On the 4th, BlackRock submitted an updated application, reinforcing monitoring measures for abnormal price fluctuations and strengthening anti-money laundering compliance. It also disclosed that it had raised $100,000 in seed funding for this ETF.
It is worth noting that in the application filed on the 4th, BlackRock mentioned the possibility of Bitcoin being classified as a security. BlackRock cited the SEC’s lawsuit against Ripple and its executives as an example, pointing out that before the SEC took action against Ripple, the market value of Ripple’s coin (XRP) had exceeded $100 billion, but within a few weeks of the SEC’s lawsuit, the market value of Ripple’s coin was less than $10 billion.
Does the SEC want BlackRock to update this section of the text? Business litigation lawyer Joe Carlasare believes that it is interesting that BlackRock added the above text description in the updated application. Apparently, the SEC wants BlackRock to use such wording in the application. He added that there was no such description in the previous application.
Former Director of the SEC’s Internet Enforcement Office, John Reed Stark, said that Joe Carlasare’s view is likely to be correct because if the SEC plans to reject the Bitcoin spot ETF application, why would the SEC bother to ask the applicant to add such language?
John Reed Stark stated that it is difficult to predict what action the SEC will take, but in his opinion, if SEC Chairman Gary Gensler supports the approval of Bitcoin spot ETF, it not only proves that he is surrendering to the cryptocurrency industry, but also inconsistent with his actions and practices in many aspects.