May 1, 2024 - Business

Scoop: SEC's Gensler pressed to approve options on spot bitcoin ETFs

Illustration of a canary with its beak open next to an exclamation mark caution sign.

Illustration: Lindsey Bailey/Axios

Representatives Mike Flood and Wiley Nickel are pressing the U.S. Securities and Exchange Commission to approve options trading on spot bitcoin funds, per a letter sent to chair Gary Gensler obtained by Axios.

Why it matters: Issuers are still waiting to be allowed to launch options after the contentious January approval of spot bitcoin ETFs, which eked through a Commission vote only after a court ruling on the matter.

  • Now a bipartisan pair of congressmen are making sure the SEC "does not continue to discriminate" against those newly launched funds.

Zoom in: Approving options trading on bitcoin ETFs is "critical" and "crucial" to the investors the agency "seeks to protect," the document viewed by Axios reads.

  • "We urge you, without delay, to approve options on spot Bitcoin ETPs or to provide an explanation for the Commission's difference in treatment between options for Bitcoin futures ETFs—which are currently trading—and options for the spot Bitcoin ETPs," write Flood and Nickel, a Republican and Democrat, respectively.

The big picture: While many broad market stock ETFs get options trading approved a few days after they launch, commodity trust-based funds have a hairier approval process that can drag out.

  • That's because such products require sign-off from multiple government agencies, including the Commodity Futures Trading Commission.

Reality check: People close to the matter tell Axios that they expect the CFTC, not the SEC, to be the biggest hurdle to overcome.

Our thought bubble: Perhaps the CFTC should get cc'd on this one.

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