SEC Punt on Carbon ETF Highlights Spot Bitcoin Anticipation

Gensler repeats crypto worries as decision on carbon fund postponed to September.

Finance Reporter
Reviewed by: Lisa Barr
Edited by: Ron Day

The Securities and Exchange Commission’s postponement of a decision whether or not to permit the first physically backed carbon ETF on the New York Stock Exchange has sparked speculation the first spot bitcoin fund may face similar delays.  

The SEC has moved to Sept. 10 a decision on the proposed COtwo Advisors Physical European Carbon Allowance Trust ETF. The proposed exchange-traded fund would provide exposure to the European Union Allowances. The ETF would provide U.S. investors exposure to the EU’s cap-and-trade emissions system, the world’s largest. 

“The SEC delaying the decision was entirely expected and is pretty routine, as I have been told,” Ron Gutstein, founder of New Canaan, Connecticut-based COtwo Advisors, said in an interview. 

While a handful of ETFs track carbon futures contracts, such as the Global X Carbon Credits Strategy ETF (NTRL), none in the U.S. track physical carbon allowances. The SparkChange Physical Carbon exchange-traded commodity is the first ETC to track physically backed carbon. It launched on the London Stock Exchange in November 2021.  

The SEC process to approve the rule change has parallels to the highly anticipated SEC spot bitcoin decision, as spot bitcoin ETFs would also track physically backed commodities as opposed to futures contracts. “This is exact same process spot bitcoin ETFs going through, ARK will prob get same 'punt' on 8/13,” said Bloomberg analyst Eric Balchunas in a tweet.  

Still, the delays may simply be indicating an overworked and understaffed SEC. The agency doesn’t have limitless bandwidth to evaluate new rules quickly and a delay doesn’t mean that the exchange-traded fund is less likely to be approved, according to Howard Fischer, a former senior trial lawyer at the SEC and a current partner at Moses Singer. 

“From what I've been hearing at the agency, there is just an enormous amount of stress because it's really hard to get all these rules out and to deal with the business of the commission,” said Fischer in an interview with He added that the fact that the rule change is the first of its kind and unique means the regulatory body is likely to spend more time evaluating it. 

Spot Bitcoin Similarities 

Yet Fischer warned that just because both proposed ETFs track physical asset classes instead of futures doesn’t mean the SEC’s approach will be the same. The agency’s attitude toward spot bitcoin comes with its own set of fraud concerns specific to cryptocurrency, as SEC Chairman Gary Gensler reiterated when he told Bloomberg Thursday that digital currencies were “rife with fraud and hucksters.”  

However, an overwhelmed SEC may signal that it will need to take more time to evaluate spot bitcoin applications—if the agency decides not to flat-out reject them.  


Contact Lucy Brewster at [email protected] or on Twitter at @lucyrbrewster  

Lucy Brewster is a finance reporter at covering asset managers, emerging technologies, and regulation. She hosts webinars and appears on Exchange Traded Fridays,’s flagship podcast. She previously was a finance fellow at Fortune Magazine where she covered markets, investment strategy, and venture capital. She has also been a freelancer writer at the publication Mergers & Acquisitions and a research fellow at the Historic Hudson Valley. 

She graduated from Vassar College in 2022 with a degree in History and was an editor of The Miscellany News, the college's award winning student run newspaper. 

Lucy lives in Brooklyn, NY, and in her free time she loves to run and find new recipes to cook.