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BlackRock and Nasdaq's Meet with the SEC for the Second Time as the Bitcoin ETF Saga Continues

The ongoing dialogue concerning spot Bitcoin ETF regulation

In recent developments, BlackRock, Nasdaq, and the United States Securities and Exchange Commission (SEC) have reconvened for another round of discussions on the listing rules for a spot Bitcoin exchange-traded fund (ETF). This meeting, the second of its kind held in December, centered around a noteworthy proposal - a rule change under Nasdaq Rule 5711(d) that could potentially pave the way for the listing of a spot Bitcoin ETF. This dialogue is a part of a series of ongoing efforts to navigate the complex terrain of cryptocurrency regulation and finally make Bitcoin ETF happen.

During these high-level talks, representatives from the three entities dissected the intricacies of Nasdaq's proposed rule change. The focal point of this meeting was to scrutinize the requirements laid out by Nasdaq Rule 5711(d), which governs the listing of commodity-based trust shares. This rule plays a crucial role in establishing a framework that ensures stringent regulatory compliance, alongside implementing surveillance mechanisms aimed at maintaining market integrity and safeguarding against fraudulent activities.

Progressing towards ETF listing and market integrity

The journey towards the approval of a spot Bitcoin ETF has been marked by incremental progress and seemingly unending discussions. On November 20, an initial meeting took place where BlackRock presented a comprehensive strategy, proposing either an in-kind or in-cash redemption model for the iShares Bitcoin Trust. This proposal was a significant step in demonstrating the potential mechanisms for managing the ETF.

Furthering these discussions, on December 14, the SEC conducted another round of talks with asset managers, including officials from SEC Chair Gary Gensler’s office. These discussions were crucial in evaluating the feasibility of allowing major exchanges to list the spot Bitcoin ETF. The outcome of these meetings holds significant implications for the cryptocurrency market, as it signals a move towards more regulated and mainstream financial products, aligning with the broader trajectory of cryptocurrency regulation that will allow conservative investors with tremendous capital to operate safely in the crypto environment.