The United States Securities and Exchange Commission has disapproved asset manager Fidelity’s Wise Origin Bitcoin Trust exchange-traded fund application.
According to a ruling on Thursday, the SEC rejected a proposed rule change by Cboe BZX Exchange to list and trade shares of Fidelity’s Wise Origin Bitcoin (BTC) Trust. The regulator said any rule change in favor of ETF approval would not aim to prevent “fraudulent and manipulative acts and practices” nor would it necessarily “protect investors and the public interest.”
The SEC extended its deliberation window to approve or reject the offer in July and November following Fidelity’s original request in March 2021, but published in the Federal Register on June 1. The SEC added that the BZX exchange “has failed to meet its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section.”
“It is essential that an exchange that lists a derivative securities product enter into a shared surveillance agreement with the markets that trade the underlying assets so that the listed exchange has the ability to obtain the information necessary to detect, investigate and deter fraud and market manipulation, as well as violations of exchange rules and applicable federal securities laws and regulations.”indicated the ruling of the SEC.
The decision followed separate SEC rulings on Tuesday that extended its window on a proposed rule change to allow shares of agricultural fund provider Teucrium that track Bitcoin futures to be listed on NYSE Arca and 21Shares’ ARK Bitcoin ETF on Cboe. BZX Exchange. The regulator’s final extension is likely to result in a decision by April 8 and April 3, respectively.
While the SEC has yet to approve ETFs with direct exposure to BTC, the regulator gave the green light to investment vehicles linked to BTC derivatives for the first time in October 2021.. At press time, shares of Valkyrie and ProShares Bitcoin futures-linked funds are currently listed on Nasdaq, and VanEck’s Bitcoin Strategy ETF is listed on the Chicago Board Options Exchange.
Many analysts do not expect SEC officials to approve Bitcoin-linked ETFs any time soon. The regulator is expected to make a decision on NYDIG’s spot Bitcoin ETF and asset manager Stone Ridge Holdings Group’s BTC ETF on March 16.