After deferring a judgement multiple times in the previous year, the US SEC has dismissed spot Bitcoin exchange-traded fund applications from the New York Digital Investment Group and fund manager Global X.
The SEC has denied proposed rule modifications from the Cboe BZX Exchange and the New York Stock Exchange’s Arca to list and trade shares in the Global X Bitcoin Trust and New York Digital Investment Group’s Bitcoin exchange-traded fund, or ETF, respectively, according to two separate Thursday filings. According to the SEC, NYSE Arca and Cboe BZX failed to meet their burden of demonstrating that the ETF would be “designed to avoid fraudulent and manipulative acts and practises” and “protect investors and the public interest” as required by the Exchange Act and the SEC’s Rules of Practice.
The SEC received applications for spot Bitcoin (BTC) ETFs from the New York Digital Investment Group, or NYDIG. As well as Global X in June and August of 2021, respectively. But the commission set longer timeframes for approving or disapproving the proposed rule change. And opened the applications for public comment several times before making a decision on Thursday. WisdomTree and VanEck had previously rejected spot BTC ETF applications.
SEC is more open to adopting exchange-traded funds based on crypto futures
The US Securities and Exchange Commission has yet to approve any financial institution’s application for a spot Bitcoin ETF. However, investment vehicles related to Bitcoin futures have fared better. After SEC chair Gary Gensler stated in August 2021 that he would be more open to adopting exchange-traded funds based on crypto futures rather than direct exposure, a slew of companies filed applications for BTC “strategy” ETFs. Valkyrie, ProShares, and VanEck have all since received approval from the regulator for ETFs connected to BTC futures.
While other firms’ crypto ETF applications are still pending, at least one is stepping up to put pressure on regulators. The SEC decided to postpone a decision on whether Grayscale’s Bitcoin Trust should convert into a spot BTC ETF. As a result, the asset manager launched a campaign urging US investors to submit comments to the SEC. The ETF is likely to be approved by July 6th, according to the regulator.