SEC Deems Spot Bitcoin ETF Filings 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 surge of applications for spot Bitcoin exchange-traded funds (ETFs). The SEC believes that the applications lack clarity, as stated by undisclosed sources familiar with the matter. This is noteworthy because several entities, including BlackRock, the world's largest asset manager, have submitted applications for a Bitcoin ETF this month.

The anonymous source revealed that the SEC is particularly concerned about the absence of specific details regarding the management of a "surveillance-sharing agreement" by the Bitcoin ETF applicants. Such an agreement is designed to prevent fraud and manipulation by ensuring that the issuer of the fund monitors trading activity, clearing activity, and customer identity within the market. Thus far, the SEC has deemed all Bitcoin ETF applications inadequate in this aspect.

BlackRock's entry into the race caused a significant price spike in Bitcoin, prompting other major fund managers to follow suit. Recently, Fidelity, a prominent U.S. firm, submitted its own application, while Invesco, Wisdom Tree, Valkyrie, and Bitwise have also applied for similar Bitcoin ETFs.

Currently, there is no existing spot Bitcoin ETF in the United States due to the SEC's reluctance to approve one. The regulator argues that the susceptibility of Bitcoin's price to manipulation is one of the primary reasons for its cautious stance.

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Wall Street Journal