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SEC rejects VanEck Bitcoin Trust Spot ETF

However, it did not condemn blockchain or cryptocurrency.

The central theses

  • The SEC has rejected the VanEck Bitcoin Spot ETF.
  • The regulator cautiously stressed that this rejection does not constitute a rejection of Bitcoin or the blockchain in general.
  • The markets have not reacted particularly violently.

The SEC has rejected another proposed Bitcoin spot ETF. This time the  -plicant was the VanEck Bitcoin Trust product proposed by BZX Exchange.

Bitcoin Spot ETF thwarted again

The SEC released its decision on Friday to reject a proposed rule change that would have allowed the VanEck Bitcoin Trust to operate. The VanEck Bitcoin ETF would have been a spot ETF, which means it would have tracked (NASDAQ 🙂 unlike other recently  -proved Bitcoin ETFs.

BZX Exchange requested the rule change in March. In its decision on Friday, the SEC wrote that it opposed the proposed rule change because BZX had failed to meet its obligation to prevent “fraudulent and manipulative acts and practices” and “[protecting] Investors and the public interest. “

The SEC ruling went on to say that in the absence of a “comprehensive surveillance sharing agreement with a regulated market of significant size” that would reduce the risk of tampering and other misconduct, BZX would have to demonstrate that the underlying Bitcoin’s market “inherently” has a unique resistance to manipulation that goes beyond the protection used by traditional commodity or securities markets. “

BZX has claimed to meet these two requirements. Among other things, BZX claimed that the increased trading volume on the Chicago Mercantile Exchange (CME) and the increased liquidity in the spot market for Bitcoin had significantly reduced the manipulation potential.

In addition, BZX listed several reasons why the ETF could give investors access to Bitcoin in a “regulated and transparent exchange-traded vehicle that would limit risk,” such as, interestingly, its ability to “[reduce] Risks associated with investing in operating companies that are imperfect proxies for Bitcoin exposure. “

The SEC did not, of course, conclude that BZX had fulfilled the necessary burden of proof, claiming, among other things, that it listed reasons that the SEC had already considered and rejected; However, the SEC stressed that “its rejection of this proposed rule change is not based on an assessment of whether Bitcoin or blockchain technology in general has any use or value as an innovation or investment.”

Futures trading for both bitcoin and bitcoin was popular, and demand was sufficient to warrant launching more product offerings. ProShares Bitcoin Strategy ETF (NYSE :), the first Bitcoin futures ETF to receive  -proval, had one of the first days in ETF listing history.

At the time of writing, Bitcoin is down about 1.5% over the day and up about 4.5% over the week.

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