SEC Rejects VanEck’s Spot Bitcoin ETF Over ‘Manipulation Concerns’

November 16, 2021, 10:30 AM AEST - 1 week ago

The US Securities and Exchange Commission (SEC) has rejected VanEck’s spot Bitcoin ETF application this week due to “concerns of market manipulation”.

VanEck’s Spot Bitcoin ETF Rejected … For No Good Reason?

In a not-at-all surprising turn of events, the SEC rejected VanEck’s proposal after several days of delay by the agency. SEC chairman Gary Gensler has in the past highlighted his preferences for a BTC futures-linked ETF over a spot ETF.

On October 20, the investment giant announced that the SEC had officially received the green light to launch a BTC futures-linked exchange-traded fund.

However, it seems the BTC spot ETF remains elusive as it didn’t meet certain SEC requirements for investor protection. As per a November 12 letter from the SEC:

The Commission concludes that [the fund] 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 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’.

SEC letter

The crypto community received the news with disappointment, one signalling that the agency doesn’t care about regular investors. Gabor Gurbacs, VanEck’s director of digital assets, expressed his disappointment on Twitter:

More Than 30 ETF Applications Still Awaiting Approval

There are more than 30 ETF applications pending approval. The SEC approved only two futures-linked ETFs last October, one of them VanEck’s, which goes live on November 16, ET. The first one recorded over US$1 billion in trading volume, turning it into the second-largest traded fund in the US.

Australian investors also smashed ASX trading records with BetaShares’ crypto ETF last week, reaching volumes exceeding A$40 million on its first day of trading.

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