SEC Calls BlackRock, Fidelity Bitcoin ETF Applications Inadequate: WSJ
According to a report from the Wall Street Journal, the U.S. Securities and Exchange Commission (SEC) has expressed dissatisfaction with the recent influx of applications for spot Bitcoin exchange-traded funds (ETFs).
According to individuals who are knowledgeable about the situation, the recent report from the WSJ on Friday suggests that the highest governing body has expressed concerns regarding the clarity of the applications. This information is quite surprising, considering that numerous companies, including the largest asset manager in the world, BlackRock, have submitted applications for a Bitcoin ETF earlier this month.
The unidentified insider stated that the SEC believes the individuals applying for a Bitcoin ETF have not provided sufficient details regarding their plans to oversee a "surveillance-sharing agreement." This agreement aims to prevent fraudulent activities and manipulations by ensuring that the entity issuing the fund is closely monitoring market trading, clearing activities, and customer identification. Up to this point, the SEC has expressed that none of the Bitcoin ETF applications have met these requirements.
The involvement of BlackRock in the competition triggered a significant increase in the value of Bitcoin, prompting several prominent investment firms to join in. Just recently, Fidelity, a major American company, took a step forward by submitting an application. Additionally, Invesco, Wisdom Tree, Valkyrie, and Bitwise have also followed suit by sending similar applications.
There is currently no Bitcoin ETF available in the United States as the SEC has been hesitant to give its approval. The regulatory authority argues that the potential for price manipulation in Bitcoin is a significant factor in their decision.
However, financial backers are seeking access to such a product as it would enable them to participate in Bitcoin without the need to manage the possession of the asset, as stated by industry professionals.
According to their recent submission, Fidelity asserted that their new offering would assist individuals seeking exposure to the cryptocurrency realm in evading potential hazards.
An exchange-traded fund (ETF) is a type of investment instrument that maintains a correlation with the market value of an underlying asset such as precious metals like gold, foreign currencies, or even digital currencies like Bitcoin.
However, the Securities and Exchange Commission (SEC) granted approval to the initial leveraged Bitcoin futures exchange-traded fund (ETF) last week. The Volatility Shares 2x Bitcoin Strategy ETF (BITX) became available for investment on the Chicago Board Options (CBOE) BZX Exchange starting from Tuesday.
