Regulatory nod for US spot bitcoin ETF options may take months

livemint.com:

Options on new U.S. spot bitcoin exchange-traded funds (ETFs) could take months to gain regulatory approval, potentially dampening the appeal of the underlying products, multiple industry sources said.

The Securities and Exchange Commission (SEC) last month approved spot bitcoin ETFs, in a watershed for the crypto industry. Ten products have been trading since Jan. 11.

Options are listed derivatives that give the holder the right to buy or sell an asset, such as a stock or exchange-traded product, at a predetermined price by a set date. They offer traders a cheap way to amplify their purchasing power, while institutional investors often use them to hedge risk.

Options on the bitcoin ETFs are delayed because there is no established regulatory process for approving them, the people said.

The SEC oversees technical rule changes that exchanges must make to list options, and typically approves them days after an ETF starts trading. But because regulators view bitcoin as a commodity, spot bitcoin ETF options may also require approval from the Commodity Futures Trading Commission (CFTC), which oversees commodity derivatives, the people said.

Products related to the spot bitcoin ETFs could raise questions about jurisdiction and oversight, which the CFTC is still sorting through, said a person familiar with the matter who declined to be identified discussing regulatory matters.

"This dual regulatory engagement adds a layer of complexity and potential for what some might call regulatory headaches," said Martin Leinweber, digital asset product strategist at MarketVector Indexes, which provides the benchmark for VanEck's spot bitcoin ETF. He expects it could take between two and ten months for the approvals.

Without the options,