Friday, December 9

SEC rejects two spot Bitcoin ETFs

The United States Securities and Exchange Commission (SEC) has rejected two Bitcoin spot exchange traded funds (ETFs), proposed by Valkyrie and Kryptoin.

According to the SEC, Valkyrie and Kryptoin did not demonstrate that their proposals were consistent with the requirements of section 6 (b) (5) of the Stock Market Act.

Specifically, according to the document Officially, the SEC rejected spot Bitcoin ETFs. Citing similar market manipulation concerns, referring to both the listing and trading stocks of the Valkyrie Bitcoin Fund and Kryptoin Bitcoin ETF Trust.

By the way, this is not the first time that Kryptoin has faced rejection. In 2019, it did not receive the green signal from the regulatory authorities.

The SEC rejected the applications of Valkyrie and Kryptoin

In effect, the SEC again turned down applications for Bitcoin spot exchange-traded funds (ETFs) countless times. This time it was the case with Valkyrie and Kryptoin, both of which were disproved on December 22.

After all, under the same argument it has used in the past, the SEC found that the Valkyrie and Kryptoin funds “did not prove to be consistent in preventing fraudulent and manipulative acts and practices.” Thus, it states that the rejection decision responds to its intention to protect investors and the public interest.

«They have not met their burden of demonstrating that the proposal is consistent with the requirements set forth in the Law 1934 Stock Exchange, in Section 6 (b) (5). In the United States, the rules of a national stock exchange must be designed both to prevent fraudulent and manipulative acts and practices, and to protect investors and the public interest. And due to an alleged lack of compliance, the Commission must disapprove of said proposal.».

Opinion of some analysts

In this regard, James Seyffart, the Bloomberg ETF research analyst, said he was a bit surprised by the SEC’s decision, as he does not understand its motives.

As a curious fact, James Seyffart, posted on Twitter an image representing the latest Bitcoin funds that the SEC rejected. Valkyrie and Kryptoin being the last ones so far. By the way, the publication also shows the next ones on the list, which are First Trust and Skybridge, since they will have their verdict before January 22.

Similarly, the ETF senior analyst, Eric Balchunas expressed: «Just in time to ruin your Christmas. There could be more to come. The fact that the SEC disapproves faster than necessary … we were optimistic about futures, but we do not trust an approval in 2022».

Some ETF Rejections

To recall, in November, the SEC rejected an application for a spot Bitcoin ETF, submitted by investment firm VanEck. This was followed by disapproval of WisdomTree’s request in early December.

In fact, last week, the SEC delayed decisions on Bitcoin ETFs, proposed by Bitwise and Grayscale, for another 45 days.

In particular, the SEC must rule on Anthony Scaramucci’s Skybridge Bitcoin ETF before January 22. And the decision on Fidelity’s Wise Origin Bitcoin Trust application is scheduled for January 27.

By way of closing, the latest move by the United States Securities and Exchange Commission (SEC) means that the market will not see a spot Bitcoin ETF for this year.

I say goodbye with this phrase from Ray Bradbury: «You have to know how to accept rejection and how to reject acceptance».