On March 10, the United States Securities and Exchange Commission ruled against an amendment that would allow investment manager VanEck to create a spot Bitcoin (BTC) trust. Commissioner Mark Uyeda joined his colleague Hester Peirce in releasing a statement criticizing the commission’s decision not to authorize the listing and trading of the financial product.
The commissioners noted that the SEC had denied every application filed for a spot bitcoin trust, totaling nearly 20 in the past six years. Their decision on VanEck “repeated the analysis that the commission made in each of these recent orders,” they said, but:
“In our view, the Commission is using a different set of target posts than what it has used – and still uses – for other types of commodity-based ETPs to keep these spot bitcoin ETPs off the exchanges we regulate.”
The agency argued that there is no underlying regulated market and therefore VanEck does not have a “comprehensive surveillance sharing agreement with a regulated market of any significant size in relation to spot bitcoin.” While this is a requirement common to all Exchange Traded Products (ETPs):
“It is also clear that the Commission uses a uniquely incriminating definition of ‘significant’ in its analyzes of spot Bitcoin ETP filings.”
The commissioners said the SEC has not required proof of a connection between the spot and futures markets for other commodity-based ETPs, and “significant” appears to be applied to the trading venue’s liquidity and volume in cases where Bitcoin is not involved. The SEC is legally required to explain changes to its policy approving commodity-based ETPs, they added.
Related: This is why the SEC keeps rejecting spot bitcoin ETF applications
VanEck has a financial product linked to bitcoin futures. She began her attempts to gain approval for a spot-linked product in 2017. The SEC delayed a decision on the company’s current and third spot ETP filing for months.
Uyeda, who was nominated by US President Joe Biden and appointed to his post in June, released a statement in February on the SEC’s proposed custody rules, in which he said: “This approach to detention appears to be a political blocking decision to obfuscate access to crypto as an asset class.”
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