SEC Rejects Fidelity’s Bitcoin ETF Application• January 28, 2022 2:58 pm • Comments
The Securities and Exchange Commission (SEC) of the United States has rejected Fidelity’s Wise Origin Bitcoin Trust, a spot exchange-traded fund (ETF) on Thursday.
🧑⚖️ Seven days after rejecting a spot #bitcoin ETF proposal by First Trust and SkyBridge Capital, the #US SEC rejected the #ETF application filed by investment giant Fidelity Investments.
What made them reject those projects? Find out here!👇https://t.co/b7akJwewFF pic.twitter.com/kyTzbtOS4o
— BeInCrypto (@beincrypto) January 27, 2022
The Securities and Exchange Commission of the United States does not appear to be prepared to approve Bitcoin-linked exchange-traded funds anytime soon. Within a week, the Securities and Exchange Commission (SEC) rejected two other spot exchange-traded funds (ETFs) that were based on the flagship cryptocurrency.
The other two funds, First Trust and SkyBridge Capital received a similar denial by the SEC. Fidelity’s Origin Bitcoin Trust was denied because of its worries about fraud, manipulation, and investor protection, among other things.
Another day, another baseless rejection of a Bitcoin spot ETF.
— Tom Emmer (@RepTomEmmer) January 27, 2022
According to Coin Telegraph:
The SEC extended its deliberation window to approve or deny the offering in July and November following Fidelity’s original application in March 2021 — but published in the Federal Register on June 1. The SEC added that the BZX exchange “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 requirements of Exchange Act Section.”
“It is essential for an exchange listing a derivative securities product to enter into a surveillance-sharing agreement with markets trading the underlying assets for the listing exchange to have the ability to obtain information necessary to detect, investigate, and deter fraud and market manipulation, as well as violations of exchange rules and applicable federal securities laws and rules,” stated the SEC ruling.
“While we are disappointed by the outcome of the SEC’s deliberations resulting in today’s disapproval order, we reaffirm our belief in market readiness for a physical bitcoin exchange-traded product and look forward to continued constructive dialogue with the SEC,” said Fidelity investments communications director Claire Putzeys.
Massive. Asset management giant Fidelity files for a bitcoin ETF https://t.co/k6yQaTyl0L
— Frank Chaparro (@fintechfrank) March 24, 2021
It was in March of last year when the $4.9 trillion investing giant, Fidelity Investments submitted its application to the SEC. Its goal was to propose a regulation modification that would allow for the listing and trading of shares of the Wise Origin Bitcoin Trust, Which would serve as a new, safer Bitcoin investment method through an ETF. Investing in the fund through a standard brokerage account would have offered investors the chance to access the fund without the possible obstacles to entry or hazards that are associated with dealing directly with Bitcoin.
In essentially every BTC ETF denial, the SEC has specifically cited risk of "fraudulent and manipulative acts and practices". The SEC's mandate is to protect investors from these risks
Given the below, what are the chances we're actually getting a BTC ETF approval in February? pic.twitter.com/A2hlkwuXRs
— Travis Kling (@Travis_Kling) November 15, 2018
According to a document filed on Thursday, the SEC has decided to reject the request. Any rule modification in favor of sanctioning the ETF, according to the commission, would not prevent “fraudulent and manipulative acts and practices” nor would it necessarily “protect investors and the public interest.” according to government officials.
Annnnnd there it is. @Fidelity's spot #Bitcoin ETF application was denied by the SEC just now (as expected). Stone Ridge/NYDIG are up next on March 16th. https://t.co/i6yM9MdDvp pic.twitter.com/zG00Ko7org
— James Seyffart (@JSeyff) January 27, 2022
While the SEC has not yet approved exchange-traded funds (ETFs) that have direct exposure to bitcoin (BTC), the agency has already allowed the use of other investment vehicles that are connected to bitcoin derivative contracts which started being offered in October 2021.
Do you know how contango and backwardation work? If not, stay the hell away from the new Bitcoin ETF.
In a misguided bid to "protect" small investors, SEC approved an exotic derivatives product rather than a basic ETF that tracks the price of Bitcoinhttps://t.co/haq40PBcPM
— Jeff Roberts (@jeffjohnroberts) October 18, 2021
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