According to a notification published on Wednesday, the markets watchdog determined that both the requests to list and trade units of the Valkyrie Bitcoin Fund and the Kryptoin Bitcoin ETF Trust were refused authorization because the offering did not match the standards set out by the agency.
Specifically, the SEC stated that “(these measures) do not satisfy the criteria of being intended to avoid deceptive and misleading actions and practices, as well as to safeguard investors and the interests of the public.”
The Securities and Exchange Commission (SEC) authorised two bitcoin futures-based funds back in October, the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF, both of which had their Wall Street launches in the very same month.
Nevertheless, the regulator has not yet approved a proposal for a spot bitcoin exchange-traded fund (ETF). The SEC denied a proposal by VanEck to establish a spot bitcoin fund earlier this month, and on December 17, the agency postponed a judgement on a similar request from Grayscale Bitcoin Trust.
ETFs are investment vehicles that follow a basket of equities and have gained popularity as a result of their decreased transaction costs. In order to avoid the inconvenience of purchasing Bitcoin via an exchange as well as maintaining the private keys, a Bitcoin ETF, which gives access to the cryptocurrency, has been developed. Industry associations and stock exchanges have been attempting to get SEC clearance for these offerings for quite some time.
Democratic SEC Chair Gary Gensler and investor advocacy groups, on the other hand, are concerned about what they perceive to be a lack of regulatory supervision and surveillance, which they believe increases the likelihood of fraud and manipulation, according to their statements.