SEC considers Spot Bitcoin ETF Filings insufficient


July 4, 2023


Olumide Adesina

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It could be a long time before a spot Bitcoin Exchange Traded Fund (ETF) is issued in the United States, as the U.S. Securities and Exchange Commission determined that recent filings from investment managers were insufficient

Securities regulators told Nasdaq and Chicago Board Options Exchange that the filings were not "clear enough and comprehensive enough," according to The Wall Street Journal. These exchanges represent asset managers in the application of financial instruments.

In the eyes of the SEC,  exchanges should name spot bitcoin exchanges that have “surveillance sharing agreements” or provide sufficient information about the details of the surveillance agreements. However, the asset management company may resubmit the return after the information has been clarified.

Applications have been pouring in in recent weeks since BlackRock was added to the list of companies looking to launch Wall Street's first Bitcoin ETF. BlackRock's filing introduced a "surveillance sharing arrangement" for companies to share information about market trading and clearing activity to prevent potential market manipulation.

Following BlackRock's filing, ARKInvest and 21Shares have amended their third spot BTC ETF application to include a similar oversight arrangement. Other asset managers that have refiled or amended their returns in the past few days include Invesco, WisdomTree, Valkyrie, and Fidelity. However, ARK Invest is reportedly the frontrunner in this race.

An ETF tracks a specific index and is usually traded on an exchange. In the cryptocurrency market, funds that track the price of one or more digital tokens and are composed of various cryptocurrencies are called cryptocurrency ETFs.

Spot Bitcoin ETFs have been banned by the SEC since 2017. However, this financial product is already available in Canada. His three major funds, Purpose Bitcoin, 3iQ Coinshares, and CI Galaxy Bitcoin, are all invested directly in Spot Bitcoin.