According to a filing on Friday, the SEC rejected a proposal to change the rules of the Cboe BZX exchange to list and trade shares of VanEck’s Bitcoin (BTC) Trust. Specifically, the SEC said any rule change in favor of ETF approval would not be “designed to prevent fraudulent and manipulative acts and practices” or “to protect investors and the public interest.”
“Commission concludes that BZX has failed to meet its obligation under the Exchange Act and Commission Rules of Practice to demonstrate that its proposal complies with the requirements of the Exchange Act section,” SEC said , adding:
“It is essential that a stock exchange listing a securities derivative enters into a surveillance sharing agreement with the markets trading the underlying assets for the listing exchange to have the ability to obtain the information necessary to detect, investigate and deter fraud and market manipulation, as well as violations of stock exchange rules and applicable federal securities laws and rules. “
The regulator had a maximum of 240 days to approve or reject the offer after it was published in the Federal Register on March 19, giving the SEC until November 14 to make a decision after the extensions on April 28 and September 8. Industry experts including Eric Balchunas, senior analyst at Bloomberg noted the SEC was highly unlikely to approve the VanEck fund given its track record of rejecting offers from investment firms exposed to crypto, a prediction that ultimately came true.
« [The SEC] address the inconsistency by not viewing CME as a signature sized regulated market in the cash denial, but then approving futures ETFs, ”Balchunas said. “That’s such a good point, but the SEC doesn’t care. Don’t have it. Basically, logic and reason are supplanted by technical legality.
While the rejection may be a blow to many investors, the SEC has already approved ETFs linked to Bitcoin futures. In October, shares of digital asset manager Valkyrie and ProShares’ BTC Strategy ETF were launched on U.S. exchanges. ProShares’ ETF has since reached the top 2% of all ETFs in terms of total trading volume, or roughly $ 400 million in shares traded on November 10.
A report: Report Suggests BlackRock Has ‘No Current Plans’ To Launch Crypto ETF As Deadline For VanEck Offer Approaches
The impact on Bitcoin’s price saw the crypto asset dip briefly to $ 62,300 before returning to over $ 63,000. The price marks a 9.7% drop since Bitcoin hit a new all-time high of $ 69,000 on November 10.