The US Securities and Exchange Commission (SEC) has indicated that recent applications from asset managers to launch spot bitcoin exchange-traded funds (ETFs) lacked clarity and comprehensiveness, according to an anonymous source.
On Friday, the SEC expressed its concerns to Nasdaq and Cboe Global Markets, the exchanges that filed the applications on behalf of asset managers such as BlackRock and Fidelity, the source added.
The news of the SEC’s rejection, as reported by the Wall Street Journal, caused a drop in the price of bitcoin, which had been rising since BlackRock submitted its application on June 15. The world’s largest cryptocurrency is currently down 1 percent at $30,142 (approximately Rs. 2,500).
When approached for comment, the SEC, Fidelity, BlackRock, and Nasdaq chose not to respond, while Cboe was unavailable at the time.
The filing of ETF applications by these prominent firms had boosted investor optimism that a bitcoin ETF would finally gain SEC approval, rekindling interest in cryptocurrencies. This interest has been dampened by a series of collapses within the crypto industry, such as the sudden demise of FTX exchange in late 2022.
The SEC has previously rejected numerous spot bitcoin ETF applications, including one from Fidelity in January 2022. In each case, the filings did not meet the necessary standards to prevent fraud, manipulation, and protect investors and public interest.
To address these concerns, the filings from BlackRock and Fidelity proposed a surveillance mechanism to detect and prevent manipulation. However, they did not specify which bitcoin exchange would be involved.
Following the SEC’s decision, stocks related to blockchain technology experienced a decline. Coinbase, Riot Platforms, and Marathon Digital all suffered drops ranging from 3 to 3.7 percent.
© Thomson Reuters 2023
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Deepak Sen is a tech enthusiast who covers the latest technological innovations, from AI to consumer gadgets. His articles provide readers with a glimpse into the ever-evolving world of technology.
