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On Friday, November 12, the U.S. Securities and Exchange Commission (SEC) rejected Vaneckâs bitcoin spot market exchange-traded fund (ETF). The U.S. regulator noted that the denial was due to the lack of prevention toward âfraudulent and manipulative acts and practices.â
SEC Turns Down Spot Market ETF â US Regulator Believes There Should be More Manipulation Protection for Investors
- Following the approval of a few bitcoin ETFs that leverage future markets, the SEC has rejected Vaneckâs bitcoin spot market ETF on Friday. So far, the U.S. regulator has not approved any bitcoin ETFs that are tethered to spot market prices.
- In its ruling, the SEC explains spot market ETF offerings have not âmet its burdenâ when it comes to â[protecting] investors and the public interest.â The Vaneck ETF was turned down over âthe requirement that the rules of a national securities exchange be âdesigned to prevent fraudulent and manipulative acts and practices.â
- For one, standards need to include âsurveillance-sharing agreements,â as they âprovide a necessary deterrent to manipulation because they facilitate the availability of information needed to fully investigate a manipulation if it were to occur,â the SEC ruling details.
- The SEC also cited the denial of the Winklevoss ETF the two investors tried to get approved years ago. In the case of most commodity-trust ETPs, the fund must enter into some kind of âsurveillance-sharing agreementsâ or âIntermarket Surveillance Group (âISGâ) membershipâ tied to the type of market, the U.S. regulatorâs ruling explains.
- The ruling details that the fund BZX believes âsuch manipulation concerns have been sufficiently mitigated, and that the growing and quantifiable investor protection concerns should [be] sufficient to justify dispensing with the requisite surveillance-sharing agreement.â
- The SEC ruling concludes that the central consideration right now for the regulator is the âpotential manipulation of bitcoin.â
What do you think about the SEC denying Vaneckâs bitcoin spot market ETF? Let us know what you think about this subject in the comments section below.
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