On November 12th, the United States’ Security and Exchange Commission (SEC) has again rejected VanEck’s Bitcoin spot ETF application citing a number of reasons including the need to protect investors from the volatile nature of the flagship digital asset.
SEC rejects VanEck again
Crypto enthusiasts had hoped that the leading financial regulator was going to finally approve the listing of VanEck’s spot application after it had approved a number of Bitcoin futures ETF last month.
However, their morales were dampened as the SEC insisted that it would not be approving an ETF that provides direct exposure to BTC due to its volatile nature alongside the fact that it is unsure if the ETF would be able to prevent fraudulent trading and also protect investors.
“This order disapproves of the proposed rule change. The Commission concludes that BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), in particular, the requirement that the rules of a national securities exchange be “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest,” the Friday notice reads.
Crypto community reacts to SEC recent rejection
With news of the SEC’s latest rejection greeting the airwaves, members of the crypto community were quick to register their displeasure with many of them questioning why the commission would be willing to accept a Bitcoin futures ETF while rejecting a Bitcoin spot ETF.
A Bitcoin futures ETF is different from a Bitcoin spot ETF in the sense that the latter provides direct investment exposure to the digital asset while the former allows investors to gain indirect exposure to the asset through buying stocks via brokerage accounts.
One of the responses to the SEC decision came from Blockchain Association who wrote that it was “disappointed” by the decision made by the Gary Gensler-led agency.
We are disappointed in today’s update from the SEC declining approval of our physical bitcoin ETF. We believe that investors should be able to gain #BTC exposure through a regulated fund and that a non-futures ETF structure is the superior approach. @tyler @gaborgurbacs
— Jan van Eck (@JanvanEck3) November 12, 2021
Jan Van Eck, the CEO of the firm, also tweeted about his disappointment with the new decision. According to him, “investors should be able to gain #BTC exposure through a regulated fund and that a non-futures ETF structure is the superior approach.”
The post Here’s why the SEC rejected the much anticipated VanEck Bitcoin spot ETF appeared first on CryptoSlate.
