The US Securities and Exchange Commission, the SEC, rejected two more BTC exchange-traded funds (ETFs) in cash last Wednesday (22). Funds were proposed by Valkyrie and Kryptoin.
The decision came about five weeks after the agency rejected VanEck’s request for a cash BTC ETF. After that, this December, who had their request denied was WisdomTree.
The rejection was not unexpected. After all, SEC President Gary Gensler had already indicated his preference for a BTC futures ETF over an ETF that owns BTC itself.
SEC rejects BTC ETFs
In the letters, the SEC claimed the same reasons that led it to reject VanEck’s proposed ETF.
According to the regulator, NYSE Arca and Cboe BZX Exchange, which submitted their respective rule changes to list and market Valkyrie and Kryptoin products, “have failed to demonstrate that their proposals are consistent with the requirements of the Exchange Act Section 6(b) (5).”
As this regulation highlights, US brokerages must be designed to “prevent manipulative and fraudulent actions and practices”. Furthermore, these entities must “protect investors and the public interest”.
These latest rejections mean the US market won’t see a BTC ETF in sight this year.
The SEC is expected to decide on Anthony Scaramucci’s Skybridge BTC ETF by Jan. 22. The decision on Fidelity’s Wise Origin BTC Trust request is scheduled for January 27th.
Last week, the SEC delayed a further 45 days on decisions on BTC ETFs proposed by digital asset managers Bitwise and Grayscale.
BTC futures ETF
In October the SEC approved the first BTC futures ETF, the one proposed by ProShares.
On the first day, the fund moved almost US$ 1 billion. It is the second largest volume in history among ETFs.
Then the regulator approved plus two BTC futures ETFs. One was from VanEck itself and the other from Valkyrie Investment.
However, to date, the SEC has not approved any spot BTC EFTs.