Fidelity Investments, a global financial services corporation, has asked the Securities and Exchange Commission to approve its Bitcoin exchange-traded fund (ETF) in a private meeting.
On September 8, Fidelity Digital Assets President Tom Jessop, six of the firm’s executives, and numerous SEC officials met in private.
The finance professionals outlined a number of reasons why the investment product should be approved by the regulator.
Increased demand for digital assets and associated goods, as well as the ubiquity of such funds in other countries and the rise of Bitcoin usage, are among these factors.
Global developed market authorities have approved Bitcoin exchange-traded products (ETPs) in Canada, Germany, Switzerland, and Sweden, according to a Fidelity presentation from the conference describing the merits of a Bitcoin product.
Fidelity argued that strict adherence to either a 1933 law allowing stock exchanges to list the products or allowing futures-only products was not necessary because the market had matured, in response to SEC chair Gary Gensler’s comments last month on the possibility of reviewing only BTC futures products.
Following the stock market crisis of 1929, the Securities Act of 1933 was enacted to safeguard investors by establishing prohibitions against misrepresentation and fraudulent conduct. These restrictions, according to Fidelity, are overly strict, and markets are now more transparent and established.
“We believe Bitcoin futures-based products are not a necessary interim step before a Bitcoin ETP; firms should be able to meet investor demand for direct exposure to Bitcoin […] through ETPs because the Bitcoin market has matured and can support them.”
According to the SEC’s own definitions, the market has already grown to “substantial size” and has deep liquidity.
Fidelity applied for the Wise Origin Bitcoin Trust, a Bitcoin exchange-traded product, in March 2021, and more than 20 other corporations have filed similar applications since then, but the regulator has yet to act.
Following a filing on September 14, the Bitwise Bitcoin Strategy ETF became the latest to be added to the SEC’s growing application backlog.
Despite regulatory obstacles, Fidelity Digital Assets continues to grow its activities. According to Bloomberg, the company wants to boost its crypto asset staff numbers by up to 70% by the end of the year.
The SEC is moving at its own leisurely pace, postponing VanEck’s proposed Bitcoin Trust ETF for the third time this year on the same day as the Fidelity conference, pushing the decision date back to November 14.
