Months after VanEck submitted its application, the U.S. Securities and Exchange Commission (or SEC) has officially disapproved VanEck’s spot Bitcoin exchange traded fund.
A Nov. 12 filing shows that the SEC has rejected a rule change proposed by the Cboe BZX Exchange for VanEck’s Bitcoin Trust to trade and list shares. The SEC stated that any rule change to approve the ETF would not “prevent fraudulent and manipulative acts or practices” nor protect investors and the public interest.
“The Commission concludes BZX has not fulfilled its burden under the Exchange Act, the Commission’s Rules of Practice and to show that its proposal is consistent the requirements of Exchange Act Section,” stated the SEC.
“It is vital that an exchange that lists a derivative security product must enter into a surveillance sharing agreement with markets trading the assets to allow them to access the information needed to detect, investigate and deter fraud and market manipulation as well as violations and violations of federal securities laws and regulations.”
After the publication of the offering in the Federal Register on March 19, the regulatory body had a maximum period of 240 days to decide whether to approve or deny it. The extension deadlines on April 28th and Sept. 8 gave the SEC until November 14th to make a decision. Experts in the industry, including Eric Balchunas, Bloomberg senior ETF analyst, stated that he estimated the chances of the SEC approuving VanEck at less than 1 percent given its history of denial of offerings from investment firms with exposure crypto. This prediction was ultimately realized.
Balchunas stated that the SEC should address the inconsistency in not deeming CME an regulated mkt size in spot deny but then approving futures-eTFs. It’s a great point, but the SEC doesn’t care. It’s not there. Technical legality is more important than logic and reason.
Related: BlackRock says it has no plans to launch crypto ETFs before VanEck’s deadline
Bitcoin’s price plunged to $62,300 within the hour, before recovering to $62,976.
This story is still in development and will be updated.