The United States Securities and Exchange Commission, or SEC, has disapproved applications for Bitcoin exchange-traded funds from New York Digital Investment Group and fund manager Global X after deferring a decision multiple times in the past year.
According to two separate filings on Thursday, the SEC rejected proposed rule changes by Cboe BZX Exchange and Arca of the New York Stock Exchange to list and trade shares of Global X Bitcoin Trust and the exchange-traded fund, or ETF, of Bitcoin from New York Digital Investment Group, respectively. The SEC said that NYSE Arca and Cboe BZX had failed to meet the requirements of the Exchange Act and the SEC Rules of Practice showing that the ETF would be “designed to prevent fraudulent and manipulative acts and practices” and “protect investors.” investors and the public interest.
The New York Digital Investment Group, or NYDIG, and Global X filed applications with the SEC for the spot Bitcoin (BTC) ETF in June and August 2021, respectively, but the commission designated longer time frames for approval or disapproval. the proposed rule change and opened requests for public comment several times before reaching a decision Thursday. The rejections followed similar decisions for WisdomTree and VanEck spot BTC ETF applications.
The SEC denied NYDIG’s Bitcoin Spot ETF proposal this morning.
— Pomp (@APompliano) March 11, 2022
Although the US regulator has yet to approve any applications for spot Bitcoin ETFs from financial institutions, investment vehicles linked to Bitcoin futures have been more successful. Many companies filed applications for BTC “strategy” ETFs after SEC Chairman Gary Gensler said in August 2021 that he would be more open to accepting exchange-traded funds based on crypto futures rather than direct exposure. Since then, the commission has approved ETFs linked to BTC futures from Valkyrie, ProShares, and VanEck.
As other firms’ crypto ETF applications are still pending, at least one firm is taking more steps to apparently pressure regulators. After the SEC delayed its decision on whether to approve Grayscale converting its Bitcoin Trust into a spot BTC ETF, the asset manager launched a campaign asking US investors to submit comments to the SEC. The regulator is expected to make a decision on the ETF before July 6.
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