US SEC deems spot Bitcoin ETFs filings as inadequate: Report

SEC Deems Recent Applications Submitted by Investment Managers Insufficient

It may take longer for a Bitcoin exchange-traded fund (ETF) to be approved in the United States as the Securities and Exchange Commission (SEC) has deemed the recent applications submitted by investment managers to be insufficient.

The Wall Street Journal reported that the securities regulator informed the Nasdaq and the Chicago Board Options Exchange (Cboe) that their filings were not adequately transparent and comprehensive. These exchanges are responsible for the filing of the financial product on behalf of asset managers.

The SEC expects the exchanges to have specified the spot Bitcoin exchange with which they have a “surveillance-sharing agreement” or provided enough details about the surveillance arrangements. Nevertheless, asset managers can resubmit the filings after making the information clear.

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In the past few weeks, a multitude of applications have been submitted since BlackRock was added to the list of corporations aiming to launch the first Bitcoin ETF of Wall Street. BlackRock’s application proposed a “surveillance sharing agreement” which permits the exchanging of information regarding trading and clearing activities between entities to prevent the potential of market manipulation.

BlackRock’s application prompted ARK Invest and 21Shares to modify their third submission for a Bitcoin ETF to incorporate a similar monitoring agreement. Other asset managers that have revised or adjusted their applications in recent days include Invesco, WisdomTree, Valkyrie, and Fidelity. It is said, however, that ARK Invest is a frontrunner in this competition.

Exchange-traded funds (ETFs) follow the performance of a particular index and are typically traded on stock exchanges. In the world of cryptocurrency, a fund that tracks the price of one or more digital assets and is composed of several different cryptocurrencies is referred to as a cryptocurrency ETF.

Since 2017, the SEC has refused to approve Bitcoin ETFs. Nevertheless, these financial products are already available in Canada. Three noteworthy funds – Purpose Bitcoin, 3iQ Coinshares and CI Galaxy Bitcoin – are all invested directly in spot Bitcoin.

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