SEC rejects Bitcoin ETF

The American regulator remains concerned about the manipulation of the market.

The U.S. Securities and Exchange Commission (SEC) has rejected a proposed bitcoin-based exchange-traded fund (ETF), citing lingering concerns about investor protection.

In a decision released on November 12, the SEC rejected a proposed rule change from Cboe BZX Exchange, Inc. that was necessary for it to list and trade the VanEck Bitcoin Trust.

The SEC said in its ruling that the proposal does not meet the requirements of securities rules, in particular the requirement for exchanges to have rules “intended to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest ”.

According to the ruling, the exchange argued that the SEC’s concerns about the potential manipulation of bitcoin-based exchange-traded products have been “sufficiently mitigated” by developments such as the growth in trading volume on long-term contracts. bitcoin term, increased liquidity in the bitcoin spot market, and certain features of the ETF itself.

The exchange also argued that permission to trade a Bitcoin ETF would limit the risk to investors by giving them access to a regulated and transparent exchange-traded vehicle.

However, the Commission concluded that the Exchange had not established the existence of sufficient safeguards against manipulation.

The regulator also stressed that its disapproval “is not based on an assessment of the usefulness or value of bitcoin, or blockchain technology more generally, as an innovation or an investment.”

Instead, the SEC rejected the proposed rule change because “BZX has not fulfilled its burden of demonstrating that its proposal complies with the requirements” of the securities rules, she said.

The SEC’s reluctance to allow Bitcoin ETFs runs counter to decisions made by Canadian authorities, which approved Bitcoin ETFs and ETFs based on other cryptocurrencies earlier this year.

Note that a few ETFs based on bitcoin futures were allowed to start trading in the United States this year.