Bitcoin ETF Rejections: Top 4 Reasons Why SEC Has Problems With Crypto-ETFs

The Securities and Exchange Commission (SEC) is constantly rejecting ETFs, the most recent being a long-awaited petition this Wednesday by ProShares. In addition to the ProShares ETF, the SEC rejected nine other bitcoin ETFs I the process, two from GraniteShares and five from Firexion.

This month, the US regulators delayed a decision in the VanEck and Solid X ETF issues. The big question that arise sis what is going on and what is causing the pushback. Here are some potential reasons:

First, bitcoin is not the problem. The SEC stated, in regard to Bitcoins functionality:

“[The agency] emphasizes that its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally has utility or value as an innovation or an investment.”

Rather, market size may be a problem. The ETF proposals track bitcoin futures, not the bitcoin itself. The SEC has stated that the bitcoin market is quite small. “Among other things, the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are ‘markets of significant size.’”

Second, manipulation and fraud could be an issue. The SEC is concerned that ETFs were rejected because they did not meet Exchange Act requirements, particularly:

“[the requirement] that a national securities exchange’s rule be designed to prevent fraudulent and manipulative acts and practices.”

Third, most of bitcoin’s volume is outside of the United States – approximately three quarters.

Finally, there is a wild swing on exchanges. The SEC did not directly address this problem, but it did suggest it is more likely to accept ETFs exchanges worked together. The price fluctuations lead to different prices and a lack of transparency.

Based on all of this information, the next question is whether there is any hope for the next bitcoin ETF. The SEC has stated,

“The Commission acknowledges that, compared to trading in unregulated bitcoin spot markets, trading a bitcoin-based ETF on a national securities exchange may provide some additional protection to investors, but the Commission must consider this potential benefit in the broader context of whether the proposal meets each of the applicable requirements of the exchange act.”

The rejection has unfortunately led to a decrease in bitcoin prices. The good news is that traders may be more realistic.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Bitcoin Exchange Guide News Team
B.E.G. Editorial Team is a gracious group of giving cryptocurrency advocates and blockchain believers who want to ensure we do our part in spreading digital currency awareness and adoption. We are a team of over forty individuals all working as a collective whole to produce around the clock daily news, reviews and insights regarding all major coin updates, token announcements and new releases. Make sure to read our editorial policies and follow us on Twitter, Join us in Telegram. Stay tuned. #bitcoin

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


Please enter your comment!
Please enter your name here


Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

Despite Testing $10,000 Multiple Times, Bitcoin Bulls May Not Arrive Yet

Yet another week of bitcoin testing $10,000 and we are back at trading around $9,600. Since the halving on May 11, the digital currency...

#DeleteCoinbase Trending After the Coinbase Exchange's Deal with DEA & IRS Becomes Public

Cryptocurrency exchange Coinbase intends to sell its blockchain analytics software called Coinbase Analytics to two US government agencies. As per the public records, the Internal...

Top UN Blockchain Expert Believes Digital Currencies And CBDC's Pose a Threat To Bank Accounts

Top U.N. official says digital assets, particularly central bank-issued digital payment systems may soon replace bank accounts due to the low-interest rates. Massimo Buonomo,...

EU’s Law Enforcement Agency, Europol, Targets Bitcoin Privacy Tool Wasabi Wallet

Europol, the European Union’s Law Enforcement Agency recently released a two-part report analyzing the impact of privacy tools in crimes related to cryptocurrency. Privacy...

Andrew Yang's Former Aide Seeks Congressional Run in NY-10; Sets Eyes on UBI and Crypto

Jonathan Herzog, a crypto advocate and former aide at Yang's campaign, has launched his congressional run for New York's 10th District. The 26-year-old started...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today