U.S. Securities and Exchange Commission Rejects Two Bitcoin Spot Exchange-Traded Funds (ETFs)

The U.S. Securities and Exchange Commission (SEC) is denying applications to establish two Bitcoin (BTC) exchange-traded funds (ETFs) based on the spot market.

According to documents from the SEC, the regulator is rejecting NYSE Arca’s bid to change a rule to list and trade shares of the NYDIG Bitcoin ETF.

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The decision comes months after the SEC designated an extended period to approve or disapprove the proposed rule change.

In a separate filing, the regulator also denies Cboe BZX Exchange’s proposal to change a rule so they could do the same to the Global X Bitcoin Trust.

In both cases, the SEC says that neither NYSE nor BZX meets the minimum legal requirements needed to properly operate a securities exchange platform within the United States.

“The Commission concludes that [NYSE Arca and BZX] have not met [their] burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that [their] proposals [are] consistent with the requirements of Exchange Act Section 6(b)(5), and in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices’ and ‘to protect investors and the public interest.’”

The SEC has rejected a number of bids for BTC ETFs, including from US-based ETF provider VanEck and financial services giant Fidelity.

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A spot Bitcoin ETF would track the performance of a particular fund’s underlying BTC holdings.

Though the Commission has yet to approve a spot-based Bitcoin ETF, Chairman Gary Gensler has signaled that the agency will be more friendly towards futures-based Bitcoin ETFs.

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Featured Image: Shutterstock/Aleksandr Kukharskiy/Chuenmanuse

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