Multinational financial services firm Fidelity Investments has pressed the United States Securities and Exchange Commission to approve its Bitcoin exchange-traded fund (EFT).
A private meeting was held on September 8 between Fidelity Digital Assets chairman Tom Jessop, six of the company’s executives and several SEC officials. Finance officials have laid out a number of reasons why the regulator should approve the investment product. These include an increased demand for digital assets and related products, the prevalence of similar funds in other countries, and the increased adoption of Bitcoin.
A Fidelity presentation from the meeting outlining the benefits of a Bitcoin product said regulators in global developed markets have approved Bitcoin exchange traded products (ETPs) in Canada, Germany, Switzerland and Sweden.
In response to comments from SEC Chairman Gary Gensler last month about the possibility of examining only BTC futures products, Fidelity argued that strict adherence to a 1933 law allowing exchanges to list the products , or allowing only futures products, was unnecessary because the market matured.
The Securities Act of 1933 was passed following the stock market crash of 1929 to protect investors by establishing laws against misrepresentation and fraudulent activity. Fidelity believes that these laws are too strict and that the markets are now more transparent and established.
“We believe that products based on Bitcoin futures are not a necessary intermediate step before a Bitcoin ETP; companies should be able to meet investor demand for direct exposure to Bitcoin […] via ETPs because the Bitcoin market has matured and can support them.
He also argued that the market has already grown to “significant size” and has significant liquidity as defined by the SEC’s own standards.
Fidelity filed for a Bitcoin exchange-traded product called Wise Origin Bitcoin Trust in March 2021, and more than 20 similar applications from other companies have since been filed, but the regulator continues to procrastinate.
The Bitwise Bitcoin Strategy ETF is the latest to be deposited in the SEC’s expanding application queue following a filing on September 14.
Related: Fidelity’s crypto ambitions are bigger than expected
Fidelity Digital Assets continues to expand operations despite regulatory bureaucracy. The company plans to increase the number of employees of its crypto assets by up to 70% by the end of the year, according to Bloomberg.
The SEC is doing things at its sluggish pace, having postponed VanEck’s proposed Bitcoin Trust ETF for the third time this year on the same day as the meeting with Fidelity, postponing the decision date to November 14.