The US SEC published its decision today denying a proposed rule change that would have allowed the VanEck Bitcoin Trust to operate. The VanEck Bitcoin ETF would have been a spot ETF, meaning it would have tracked Bitcoin directly, unlike recently-approved Bitcoin futures-based ETFs. BZX Exchange had filed for the rule change in March. The US SEC cited investors’ protection for declining the spot ETF approval.
The exchange did not meet its burden in regard to preventing fraudulent and manipulative acts.
BZX Exchange filed for the rule change in March. The SEC wrote in its decision today that it was rejecting the proposed rule change because it argued, BZX had not met its burden in regard to preventing “fraudulent and manipulative acts and practices” and “[protecting] investors and the public interest.” The US SEC has done this several times before as well. The financial regulator denied BTC ETF, saying that the market is prone to be manipulated and investors are not safe.
BZX asserted that it met all the requirements.
The SEC decision goes on to state that in the absence of a “comprehensive surveillance-sharing agreement with a regulated market of significant size” that would mitigate risks of manipulation and other bad behavior, BZX would need to establish that Bitcoin’s underlying market “inherently possesses a unique resistance to manipulation beyond the protections that are utilized by traditional commodity or securities markets.” BZX has asserted that it met both of these requirements. Among other reasons, BZX also asserted that the increased trading volume in the futures markets on the Chicago Mercantile Exchange (CME) and increased liquidity in the spot market for Bitcoin had significantly decreased manipulation potential.