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SEC denies rule change for One River Carbon Neutral Trust ETF


The United States Securities and Exchange Commission (SEC) has rejected another application for a Bitcoin exchange-traded fund (ETF). The recently rejected application was for the One River Carbon Neutral Bitcoin Trust.

SEC rejects One River Carbon Neutral Bitcoin Trust

The SEC recently denied a rule change for trading and listing the shares of the One River Carbon neutral Bitcoin Trust. In a notice issued on May 27, the SEC said that it had rejected the proposed rule change under the NYSE Arca Rule 8.201-E.

According to the notice, the top reason the application for the rule change was rejected was that it failed to fulfil the requirements of the Exchange Act. It also fell short of the SEC’s Rules of Practice.

The SEC also highlighted Section 6(b)(5), where it talked about compliance with the rules that a national securities exchange needed to be “designed to prevent fraudulent and manipulative acts and practices.” It also calls for investor protection and that products and services serve the public interest.

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According to the SEC, these were the same reasons it rejected all the spot Bitcoin ETFs that had been filed by other companies. It also gave a guideline under which any application for an ETF would be approved.

“An exchange that lists Bitcoin-based exchange-traded products can meet its obligations under Exchange Act Section 6(b)(5) by demonstrating that the exchange has a comprehensive surveillance-sharing agreement with a regulated market if significant size related to the underlying or reference Bitcoin assets.”

Companies are still filing for spot Bitcoin ETFs

The failure of the SEC to approve any of the spot Bitcoin ETFs that have been tabled by multiple companies has not prevented the applications from piling up. Some of the big names in the crypto industry are still filing for spot crypto ETFs.

The most recent application was by Ark Invest, an asset management firm headed by Cathie Wood. The ARK 21Shares Bitcoin ETF will track Bitcoin’s performance in relation to the S&P Bitcoin Index.

The Ark Invest filing also added that “In seeking to achieve its investment objective, the Trust will hold Bitcoin and value the shares daily based on the Index. The Trust will process all creations and redemptions in-kind in transactions with authorized participants. The Trust is not actively managed.”

Despite the efforts made by several companies, the application for spot Bitcoin ETFs might fail to receive approval as the SEC chair, Gary Gensler, has said the products are subject to manipulation.

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