The US Securities and Exchange Commission (SEC) rejected two applications of Bitcoin spot Exchange Traded funds (ETFs).
In the present time, crypto & blockchain adoption is surging but the legal unclarity of the rules and regulations on the crypto industry is creating a big issue for the big companies & financial institutions to get into crypto Investment. So few financial institutions and leaders are searching for a clear path to bring direct crypto investment with fewer risk chances with the Bitcoin-backed exchange traded funds.
Recently the US SEC agency released its document and confirmed the rejection of the application of NYSE Arca’s bid to change a rule to list and trade shares of the NYDIG Bitcoin ETF.
Through a separate released document, the SEC agency confirmed the rejection of the Cboe BZX Exchange’s proposal to change a rule so they could do the same to the Global X Bitcoin Trust.
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In both of the rejected applications, SEC claimed that both of these two failed to provide a minimum necessary legal required systems, which can perfectly obey these exchanges to operate in 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).”
SEC also hinted that there are some possibilities of the manipulation & indirect fraud activities through manipulation can take place, as per the statement.
“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.’’
This is not the first time the SEC agency rejected the application of Bitcoin spot ETFs. Earlier this Agency rejected the application of VanEck & Fidelity for its Bitcoin spot ETFs.
No room for Bitcoin spot ETFs
In the past, the SEC agency approved a few Bitcoin futures ETFs applications but after that rejected every Bitcoin spot ETFs based applications. However spot ETFs are less risky than futures but still, the US SEC agency is not ready to approve spot applications backed by Bitcoin funds.
According to experts, Bitcoin spot ETFs are the best thing for investors because these ETFs precisely track the performance of a particular fund’s underlying Bitcoin holdings.
In the present time, the majority of wealthy investors & financial institutions are dependent on Grayscale Bitcoin Fund & Ethereum trust. And Grayscale is trying to change its Grayscale Bitcoin Fund (GBTC) into a Bitcoin spot ETF. Recent & past decisions of SEC agency hinted that US citizens will not see crypto spot ETF in near future.
Read also: Ukraine using direct crypto payments to buy weapons
US regulators rejects two Bitcoin ETFs applications
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