TL;DR
- SEC orders SkyBridge Capital to withdraw its Bitcoin ETF application due to lack of timely amendments.
- SkyBridge had submitted the application more than nine months ago without it being effective.
- Eric Balchunas suggests that the launch of the ETF could have increased fund flows by 15%.
The Securities and Exchange Commission (SEC) has issued an order for SkyBridge Capital to withdraw its application for a Bitcoin ETF, known as the First Trust SkyBridge Bitcoin ETF Trust.
This decision comes after the SEC determined that SkyBridge failed to make timely amendments to its application, despite it having been on file for more than nine months without becoming effective.
According to the filing, the SEC has declared abandoned registration status effective March 12, 2024, due to SkyBridge‘s failure to respond to notices about the need for timely amendments or withdrawals.
SkyBridge Capital, led by Anthony Scaramucci, initially filed for the Bitcoin exchange-traded fund in March 2021.
SkyBridge Capital ETF Aimed to Mirror Bitcoin Performance
However, in January 2022, the Securities and Exchange Commission (SEC) declined the application, leading SkyBridge Capital to refrain from submitting it again.
Eric Balchunas, a senior ETF researcher at Bloomberg, commented on the SEC’s decision.
The researcher highlighted that although the precise rationale behind the abandonment remains uncertain, the approval of the ETF might have played a pivotal role in driving notable growth in fund inflows, potentially by as much as 15%.
The SEC is ordering (in all caps) First Trust SkyBridge Bitcoin ETF to declare their filing "abandoned" today. FT was one of the filers who never jumped back in to the post-BLK race, not sure why. Had they launched prob add 15% to the flows prob as First Trust is a sales MACHINE pic.twitter.com/ruEbFvyFxC
— Eric Balchunas (@EricBalchunas) March 12, 2024
This development underscores the significant challenges and regulatory scrutiny faced by companies aspiring to launch Bitcoin ETFs.
As the Securities and Exchange Commission (SEC) continues its evaluation, it highlights the complexities surrounding the suitability and compliance of these investment vehicles within the market landscape.
The ongoing assessment underscores the intricate balance required to navigate the regulatory framework while meeting investor demand for innovative financial products tied to cryptocurrencies.
While SkyBridge Capital has refrained from offering an official statement regarding this decision, the withdrawal of its application serves as a clear indicator of the ongoing challenges encountered when introducing cryptocurrency-linked financial products into regulated markets.
Regulatory uncertainty around cryptocurrencies, especially in the ETF space, remains a major barrier to their mass adoption in the traditional financial space.
