After a long wait and a lot of anticipation, the US Securities and Exchange Commission, the SEC, rejected on Friday (12) the request for an exchange-traded fund (ETF) of Bitcoin based on VanEck’s spot market.
The request to launch the ETF on the Cboe BZX Exchange had been submitted by the investment firm on May 1st.
In the request, Cboa BZX Exchange wanted the SEC to make a rule change allowing it to list VanEck’s Bitcoin fund.
However, in your decision, the SEC claimed concern of “fraud and manipulation” in the Bitcoin spot market:
“This order disapproves of the proposed rule change,” the SEC said in the statement, released Friday. “The Commission concludes that BZX has failed to discharge its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement of that the rules of a national stock exchange must be ‘designed to prevent fraudulent and manipulative acts and practices’ and ‘to protect investors and the public interest’”.
SEC and Bitcoin ETFs
This reasoning is in line with previous SEC rejections of ETFs that would track the price of Bitcoin directly.
When it brought down a Bitcoin ETF proposed by Cameron and Tyler Winklevoss years ago, the agency made the same claims.
The SEC said market manipulation concerns needed to be resolved before approving a cash product.
To date, the US regulator has only allowed them to advance Bitcoin futures ETFs. In other words, contracts that bet on the future price of the cryptocurrency. In the US, these contracts are regulated by the Commodity Futures Trading Commission (CFTC).
BTC ETF: Futures yes, no spot
As reported by CriptoFácil, the first futures ETF approved by the SEC was that of ProShares. On the first day, the fund moved almost US$ 1 billion. It is the second largest volume in history among ETFs.
Then the regulator approved plus two BTC futures ETFs. One was from VanEck itself and the other from Valkyrie Investment.
Recently, BlockFi also submitted to the SEC an application for a cash Bitcoin ETF. The initiative is the result of a partnership with investment management company Neuberger Berman. But apparently, as far as the SEC is concerned, this will be another request shelved.
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