Two ETF proposals rejected
In individual filings dating Mar., the SEC rejected two proposals for Bitcoin exchange traded funds (ETFs). 10, 2022.
First, the SEC rejected a Bitcoin ETF by NYDIG. This was intended to launch on the NYSE Arca Exchange. The fund’s proposed rule change was filed in June 2021.
The second rejection concerns Global X’s Bitcoin Trust, which was intended for trading on the Cboe BZX exchange. This investment fund’s proposed rule change was filed in August 2021.
In each case, the SEC concluded that the entity behind the proposal “[had] not met its burden…to demonstrate that its proposal [was] consistent with the requirements” of the relevant regulations.
In particular, the regulator said that the target exchange’s design was not sufficient to prevent fraud and manipulation, nor was it sufficient to provide protection to investors and the public interest.
The U.S. has yet to offer a Bitcoin Spot ETF
NYDIG’s fund was one of many competing proposals that aimed to launch the first Bitcoin spot ETF. The SEC was scheduled to issue a decision by January 2022. However, the SEC delayed its decision until that month.
The name of Global X’s Bitcoin Trust suggests a fund similar to already-operational Bitcoin trusts from Grayscale and Valkyrie, which would at first glance give it an advantage with regulators. Yet it appears that this is not actually the case, as Global X’s SEC filing refers to the investment vehicle as an exchange-traded fund.
The SEC has not approved any Bitcoin spot ETFs to date. Recent months have seen the SEC reject proposals from WisdomTree and VanEck.
However, the regulator approved several futures ETFs including those from VanEck and Valkyrie.
In other countries, Bitcoin spot ETFs are also approved. The funds became available in Canada starting in 2021. Fidelity launched a Canadian spot ETF last December.