The United States Securities and Exchange Commission disapproved Fidelity’s Wise Origin Bitcoin Trust spot-exchange-traded fund application.
The SEC has rejected a rule change proposed by the Cboe BZX Exchange for listing and trading shares of Fidelity’s Wise Origin Bitcoin Trust (BTC). This was according to a Thursday filing. According to the regulatory body, any rule change that favors approval of the ETF will not prevent “fraudulent or manipulative acts and practices” nor “protect investors and public interest”.
After Fidelity’s March 2021 application, the SEC extended its deliberation window in order to approve or deny the offering in November and July. The publication in the Federal Register was June 1. The SEC stated that the BZX Exchange “has not fulfilled its burden under both the Exchange Act and Commission’s Rules of Practice in order to show that its proposal is consistent within the requirements of Exchange Act Section.”
The SEC ruling stated that it was essential that an exchange that lists a derivative security product must enter into a surveillance-sharing arrangement with markets trading the underlying asset for the listing exchange in order to be able to obtain the information necessary to detect and investigate fraud and market manipulations, as well violations of federal securities laws and regulations.
This decision came after separate filings by the SEC on Tuesday, which extended its window for a proposed rule change that would allow shares from Teucrium, an agricultural fund provider, to be listed at NYSE Arca and ARK 21Shares Bitcoin ETF respectively. Expect a final extension by the regulator to be made by April 8 or April 3.
Although the SEC has not yet approved ETFs directly exposed to BTC, it gave green light for investment vehicles that are linked to BTC derivatives in October 2021. The shares of Bitcoin futures-linked funds, Valkyrie and ProShares, were currently listed on Nasdaq. VanEck’s Bitcoin Strategy ETF trades on the Chicago Board Options Exchange at the time of publication.
Related: Valkyrie seeks ETF that is linked to Bitcoin mining companies on Nasdaq
Analysts don’t expect the SEC to approve Bitcoin-linked ETFs any time soon. On March 16, the regulatory body will make a decision about NYDIG’s spot Bitcoin ETF, and Stone Ridge Holdings Group’s BTC ETF.