SEC Postpones Crypto Index Decision as Shanghai Judge Issues Landmark Opinion

It must be a busy time at the US Securities and Exchange Commission (SEC) these days, which would explain why they have just delayed another crypto index exchange-traded fund (ETF) decision.

Yes, the SEC can’t catch a break amid discussions about who will replace the highly unpopular Chair, Gary Gensler, at the regulator’s helm. There are also the 18 US states suing the SEC and Gensler for allegedly overextending their powers.

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Now, the SEC has announced delays to a decision on Franklin Templeton’s application to launch a crypto index ETF to 6 January 2025.

The fund, whose name has a nice ring to it – because Franklin Templeton calls it EZPZ – would track the CF Institutional Digital Asset Index, and offer exposure to both BTC and ETH initially, with the potential to add more crypto assets later.

Coinbase Custody Trust Company would manage the fund’s digital assets, seeking listing on the Cboe BZX Exchange, with the Bank of New York Mellon handling administrative tasks. This follows Hashdex’s earlier effort to launch a similar crypto index ETF.

Meanwhile, in China…

While things are set to change in the US, with Trump seemingly stuffing important positions with overall crypto-friendly appointments and even a rumoured Crypto Czar – which would oversee crypto initiatives and regulations in the White House – over in China a court’s opinion post just made heads turn.

According to the South China Morning Post, a Shanghai judge just issued an opinion that crypto ownership is not illegal under Chinese law.

This comes as the Chinese Government has treated crypto with contempt and considers it a threat to financial stability. Rules around what’s legal in the country have been murky, with business entities banned from token issuance and trading or investing in cryptocurrencies.

Initial Coin offerings have been illegal in China since 2017, and crypto exchanges were forced to close down. In 2021, Bitcoin mining was banned and crypto-related businesses were ousted.

Individuals Allowed to Hold Crypto, Businesses Banned

However, Judge Sun Jie of the Shanghai Songjiang People’s Court wrote on WeChat that it is “not illegal for individuals to hold cryptocurrency”. The article was published on the Shanghai High People’s Court’s official account as part of a case where two companies disagreed about an initial coin offering.

Sun said that due to its qualities “of property, cryptocurrency ownership is not prohibited by Chinese law”, and it’s viewed akin to a virtual commodity.

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However, the judge warned of the risks of trading in digital assets, which “will not only disrupt the economic and financial order”, but also potentially serve as a vehicle for illegal activities such as “money laundering, illegal fund-raising, fraud, pyramid schemes and other illegal and criminal activities”.