The SEC is reportedly saying that filings for spot bitcoin ETFs are “insufficient” and BTC price is falling

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(Kitco News) — The Securities and Exchange Commission is looking to preempt recent hype surrounding the possibility that a spot Bitcoin (BTC) exchange-traded fund will soon receive approval, as the regulator has said recent filings are insufficient. according to people familiar with the matter.

The Wall Street Journal reported that agency Nasdaq and Cboe Global Markets, the exchanges that submitted filings on behalf of BlackRock and Fidelity, informed that the filings were not clear and comprehensive enough, sources said.

The price of bitcoin is up 26.75% since BlackRock filing was announced on June 15, hitting a high of $31,475 on Friday, June 23 before falling back to the $30,000 support level . Fidelity resubmitted its filing on Thursday, giving the crypto market fresh impetus, but that has since reversed after the SEC’s comments broke.

BTC/USD chart by TradingView

Based on the comments, recent spot bitcoin ETF filings by BlackRock, Fidelity, ARK Investment Management, Invesco, WisdomTree, Bitwise Asset Management and Valkyrie are in doubt to pass, which has led to a market-wide decline.

For seasoned crypto investors, this development is nothing new as the SEC has long rejected spot BTC ETFs dating back to 2017. The regulator has repeatedly stated that these products are susceptible to fraud and market manipulation and therefore would not grant them approval.

While the SEC is clearly opposed to a spot ETF, it has been more open to bitcoin futures ETFs, approving at least half a dozen such investment products. Last Friday, regulators approved the Volatility Shares 2x Bitcoin Strategy ETF (BITX), the first leveraged bitcoin futures ETF to launch in the US market.

The approval of futures ETFs has drawn opposition from the crypto community and from companies like Grayscale, who argue that the pricing mechanisms for futures and spot ETFs are almost identical, so there is no reason why futures ETFs should be approved should be rejected, while this is the case for spot ETFs.

Grayscale took its objections to the next level by filing a lawsuit against the SEC in March. “Logically, if regulators are happy with ETFs that hold derivatives of a given asset, they should be happy with ETFs that hold the same asset,” Grayscale said, referring to the regulator’s approval of ETFs based on bitcoin futures SEC.

Many see the adoption of a spot bitcoin ETF as a turning point for the crypto industry. This would give institutional investors and retirement accounts broader access to the top cryptocurrency, as it could be acquired through brokerage accounts just as easily as stocks.

Crypto advocates had hoped that the inclusion of a Surveillance Sharing Agreement (SSA) in BlackRock’s filing would be key to approval, but the SEC told exchanges it had returned the paperwork because it didn’t have the Bitcoin -Exchange you are dealing with You are expected to have an SSA or provide sufficient information about the details of these agreements.

A Cboe spokesman told the WSJ that the company intends to update and resubmit its filing. Nasdaq and the SEC declined to comment.

For now, it looks like ARK Investments’ ARK 21Shares Bitcoin ETF, whose filing is scheduled to be reviewed on August 13, will face the same fate as previous spot BTC ETF filings—rejection—if the SEC approves Position does not change or the application is changed to clarify the information required by the regulator.

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