The U.S. Securities and Trade Fee (SEC) has rejected the Knowledge Tree Bitcoin Belief ETF, because it has no legitimate measure to guard traders in opposition to market manipulation.
The SEC in an Oct. 11 launch famous that it needed to reject the submitting by BZX Trade, because the bitcoin-ETF issuer doesn’t have a big surveillance sharing settlement with a regulated marketplace for bitcoin.
A surveillance-sharing settlement permits market members to simply share market buying and selling and clearing activist and buyer id within the occasion of any value manipulation of BTC.
Based on the SEC, the surveillance settlement is essential earlier than it may approve any spot bitcoin-ETF, on condition that the marketplace for bitcoin is extremely unregulated.
The primary Knowledge Tree spot bitcoin ETF was additionally rejected in December 2021 on grounds of investor safety.
SEC and spot bitcoin ETF rejections
The SEC’s choice to reject the Knowledge Tree ETF utility is not any shock to many, because the US regulator has a long-standing historical past in opposition to bitcoin spot ETFs.
The Winklevoss twins have been the primary to ever try to file a Bitcoin ETF in July 2013. Nevertheless, the SEC rejected their utility in March 2017.
The VanEck Solidx ETF adopted go well with in July 2013, but it surely confronted rejection in January 2019.
In 2017, ProShares, Direxion, and GraniteShares tried to have their respective functions authorized, however the SEC hit the rejection dial.
Bitwise, Wilshire, and Actuality Shares ETF all had a rejection of functions they made in 2019.
By mid-2020, Knowledge Tree submitted its first utility, which the SEC rejected a couple of 12 months later.
VanEck refiled its utility in January 2021, whereas Constancy, NYDIG, and GrayScale all filed for bitcoin ETFs in the identical interval. VanEck’s utility was rejected once more in Nov. 2021.
Up to now in 2022, the SEC has rejected functions by GrayScale, BitWise, and the newest Knowledge Tree.
The rising listing of rejected spot bitcoin ETF functions has been influenced by SEC Chair Gary Gensler. Gensler has expressed his choice for futures ETFs stating that spot ETFs are extra vulnerable to fraud and manipulation.
