SEC Delays Decision on True Social Bitcoin ETF
The Securities and Exchange Commission (SEC) has decided to postpone its decision regarding the True Social Bitcoin Exchange Transaction Fund (ETF) until September 18, pushing back the original deadline of August 4.
This fund, backed by the Trump Media and Technology Group, is seeking approval to list True Social Bitcoin ETFs on the NYSE Arca Exchange, operating within the SEC’s product-based trust sharing framework.
The SEC has the authority to take up to 270 days to decide on an ETF application, allowing time to thoroughly evaluate the proposal and address any issues that come up.
SEC’s Ongoing Review
The delay for the Trump-backed Bitcoin ETF isn’t an isolated case. The SEC also postponed its decision on Grayscale’s Solana Trust and a Litecoin ETF proposed by Canary Capital, both of which now face extended deadlines.
Commissioner Hester Peirce, known for her supportive stance on cryptocurrency, remarked that stakeholders should prepare for a slow approval process. “People need to be patient… We’re navigating ongoing lawsuits and other important considerations,” she noted in a recent interview.
Interestingly, despite these delays, they are relatively swift when you look at history. It took the SEC over ten years, starting from the first spot Bitcoin ETF application in 2013, to give an approval in January 2024.
Concerns Surrounding Trump ETFs
If granted approval, this True Social Bitcoin ETF would be the first cryptocurrency fund linked to a sitting U.S. president’s business interests. While the ETF has yet to face formal disputes from the SEC, other crypto ventures associated with Trump have raised ethical questions, particularly among Democratic lawmakers.
In May, Senator Elizabeth Warren and Jeff Merkley formally urged the government’s Office of Ethics to look into a Trump-related crypto transaction, labeling it as “amazing conflicts of interest.” This includes dealings with companies like World Liberty Financial and Vinance.
They expressed concerns that the arrangement could enable Trump and his associates to leverage cryptocurrency for personal gain through potentially corrupt means.
Moreover, there are worries that Trump could personally profit from regulatory decisions impacting the crypto landscape or businesses tied to him, especially if the SEC approves a financial product that boosts demand for assets linked to his name.
Trump has shown a keen interest in the crypto sphere since taking office. On July 18, he signed the Genius Act, which aims to establish a comprehensive regulatory framework for stablecoins. Just days earlier, his appointed head of the Federal Housing Financial Assistance (FHFA), William J. Plute, directed Fannie Mae and Freddie Mac to develop proposals for recognizing private cryptocurrency holdings as valid assets for single-family mortgages.
