The US Securities and Exchange Commission (SEC) is denying requests to establish two Bitcoin (BTC) exchange-traded funds (ETFs) based on the spot market.
According to SEC filings, the regulator is rejecting NYSE Arca’s offer to amend a rule for listing and trading shares of the NYDIG Bitcoin ETF.
The decision comes months after the SEC designated an extended period to approve or disapprove the proposed rule change.
In a separate filing, the regulator also denies Cboe BZX Exchange’s proposal to change a rule so they can do the same for the Global X Bitcoin Trust.
In both cases, the SEC asserts that neither the NYSE nor the BZX meet the minimum legal requirements necessary to properly operate a securities trading platform in the United States.
“The Commission finds that [NYSE Arca and BZX] have failed to fulfill [their] onus under the Exchange Act and the Commission’s Rules of Practice to demonstrate that [their] proposals [are] consistent with the requirements of Section 6(b) of the Stock Exchange Act (5) and, in particular, the requirement that the rules of a national stock exchange be ‘designed to prevent fraudulent and manipulative acts and practices’ and ‘to protect investors and the public interest'”.
The SEC has rejected several BTC ETF offerings, including from US-based ETF provider VanEck and financial services giant Fidelity.
A Bitcoin Spot ETF would track the performance of the underlying BTC holdings of a specific fund.
While the Commission has yet to approve a spot-based Bitcoin ETF, Chairman Gary Gensler has signaled that the agency will be more friendly to futures-based Bitcoin ETFs.