The Securities and Exchange Commission (SEC) of the United States has rejected NYDIG and Global X’s applications for Bitcoin ETFs.
Proposals for two ETFs Rejected
In separate filings dated March 10, 2022, the SEC rejected two Bitcoin exchange-traded funds (ETFs) proposals.
The SEC’s first rejection involves a Bitcoin ETF from NYDIG that was scheduled to debut on the NYSE Arca market. Instead, in June 2021, the fund submitted a proposed rule change.
The second rejection is related to Global X’s Bitcoin Trust, which was supposed to be traded on the Cboe BZX market. The proposed regulation change for this investment fund was submitted in August 2021.
The SEC found that the entity sponsoring the plan “had not fulfilled its responsibility to show that its proposal [was] compliant with the applicable rules.
The regulator specifically said that the architecture of the target exchange was insufficient to prevent fraud and manipulation and safeguard investors and the public interest.
In the United States, there is no Bitcoin Spot ETF
The fund proposed by NYDIG was one of several competing ideas to construct the first Bitcoin spot ETF. The SEC had intended to make a ruling in January 2022 but decided to postpone it until the following month.
The name of Global X’s Bitcoin Trust indicates a fund comparable to Grayscale and Valkyrie’s Bitcoin trusts, which would seem to give it an edge with authorities. However, Global X’s SEC filing refers to the investment vehicle as an exchange-traded fund, indicating that this is not the case.
To yet, the SEC has not authorized a Bitcoin spot ETF. In recent months, the agency has rejected requests from Fidelity, VanEck, and WisdomTree.
Nevertheless, the SEC has authorized some futures ETFs, including those from ProShares, Valkyrie, and VanEck.
In addition, numerous nations have permitted Bitcoin spot ETFs. In December, Fidelity launched a Canadian spot ETF, making these products accessible in Canada for the first time in 2021.