The U.S. Securities and Change Fee (SEC) has rejected the Knowledge Tree Bitcoin Belief ETF, because it has no legitimate measure to guard traders towards market manipulation.
The SEC in an Oct. 11 launch famous that it needed to reject the submitting by BZX Change, 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 identification within the occasion of any worth manipulation of BTC.
Based on the SEC, the surveillance settlement is essential earlier than it might 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 determination to reject the Knowledge Tree ETF software is not any shock to many, because the US regulator has a long-standing historical past towards bitcoin spot ETFs.
The Winklevoss twins had been the primary to ever try to file a Bitcoin ETF in July 2013. Nonetheless, the SEC rejected their software in March 2017.
The VanEck Solidx ETF adopted swimsuit in July 2013, however it confronted rejection in January 2019.
In 2017, ProShares, Direxion, and GraniteShares tried to have their respective purposes authorized, however the SEC hit the rejection dial.
Bitwise, Wilshire, and Actuality Shares ETF all had a rejection of purposes they made in 2019.
By mid-2020, Knowledge Tree submitted its first software, which the SEC rejected a few 12 months later.
VanEck refiled its software in January 2021, whereas Constancy, NYDIG, and GrayScale all filed for bitcoin ETFs in the identical interval. VanEck’s software was rejected once more in Nov. 2021.
Up to now in 2022, the SEC has rejected purposes by GrayScale, BitWise, and the most recent Knowledge Tree.
The rising listing of rejected spot bitcoin ETF purposes 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.