WisdomTree Yet Again Amends Spot Bitcoin ETF Filing After SEC Rejection
The changes will apply “certain of the substantive requirements” of the 1940 Act to offer investors “significant protections” but won't be registered under the Investment Company Act.
Asset manager WisdomTree is not giving up the fight for a Bitcoin exchange-traded fund (ETF) and has amended its filing again.
The Bitcoin Trust (BTCW) is not registered under the Investment Company Act of 1940, which the US Securities and Exchange Commission (SEC) Chair Gary Gensler has been supporting, resulting in the launch of three Bitcoin Futures ETFs.
But, according to the filing, it is “applying certain of the substantive requirements” of the ‘40 Act to provide investors with some of the significant protections under the Act.
As such, the Trust will custody its assets, in compliance with Act, at a bank meeting the requirements. The Trust will also provide daily disclosures required for ETFs, including its portfolio holdings; a daily update on the net asset value per share, market price and any premium or discount; the number of days it traded at a premium or discount; discuss the factors if premium or discount remains greater than 2% for seven consecutive trading days, and median bid-ask spread. All this information will be publicly accessible and free of charge.
In accordance with the ‘40 Act, the Trust will have its financial statements audited, maintain a fidelity bond for the benefit of the Trust in the maximum amount required, and maintain the books and records of the Trust.
Additionally, the Trust will ensure that there are no transactions with affiliated persons that would be prohibited by Act.
Further, the Trust will use an independent pricing source in valuing its assets with inputs from the same bitcoin trading platforms and the same methodology as is used by CME to price its Bitcoin futures.
These latest changes come after a week of the SEC disapproving WisdomTree’s spot Bitcoin ETF. The agency declined the ETF after postponing the decision on the application several times this year. It was initially filed in late March.
Last Wednesday, the SEC rejected the proposed rule changed from the Cboe BZX Exchange to list and trade shares of WisdomTree’s Bitcoin Trust, saying it still does not “prevent fraudulent and manipulative acts and practices” nor “protect investors and the public interest.” The filing said,
“The Commission cannot conclude, based on BZX’s statements alone and absent any evidence or analysis in support of BZX’s assertions, that it is unlikely that trading in the ETP would be the predominant influence on prices in the CME bitcoin futures market.”
WisdomTree’s Ethereum Trust is also under SEC review, first submitted to the agency in May.