In Brief:
- The US SEC has rejected Fidelity’s Spot Bitcoin ETF.
- The SEC has cited concerns of fraud, manipulation, and investor protection for rejection.
According to a newly released file, the SEC issued its disapproval on Thursday morning. The SEC has always voiced concerns about fraud, manipulation, and investor protection, as it has in recent months. The SEC has raised similar concerns for years, dating back to its rejection of a bitcoin ETF plan proposed by Gemini exchange founders Cameron and Tyler Winkelvoss.
Fidelity said, “While we are disappointed by the outcome of the SEC’s deliberations resulting in today’s disapproval order, we reaffirm our belief in market readiness for a physical bitcoin exchange-traded product and look forward to continued constructive dialogue with the SEC.”
The Wise Origin Bitcoin (BTC) Trust was intended to be listed and traded on the Cboe BZX Exchange. The proposed regulatory change aimed to allow investors to access this money through a standard brokerage account while reducing the risks associated with using Bitcoin directly.
The SEC explained that “This order disapproves the proposed rule change. The Commission concludes that BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and in particular, the requirement that the rules of a national securities exchange be “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest,”.
The SEC has approved ETFs such as ProShares Bitcoin Strategy ETF, and Bitwise Crypto Industry Innovators ETF that provide exposure to Bitcoin but are not pure bets. It has rejected spot bitcoin ETF proposals from VanEck and WisdomTree and decisions for ETF submission from Stone Ridge and NYDIG are expected by mid-March.
