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The U.S. Securities and Exchange Commission has said that the wave of spot Bitcoin exchange-traded funds (ETFs) applications filed this month are inadequate, according to a Wall Street Journal report.
Citing people familiar with the matter, the Friday WSJ report claims that the top regulator has said the applications aren't clear enough. It's a striking revelation because have filed applications for a Bitcoin ETF this month, including the world's biggest asset manager BlackRock.
The unnamed source said the SEC doesn't think the Bitcoin ETF applicants have been specific enough about how they'll manage a "surveillance-sharing agreement." The agreement is meant to deter fraud and manipulation by ensuring the fund issuer is monitoring market trading activity, clearing activity and customer identity. So far, the SEC has said that all Bitcoin ETF applications have fallen short in this regard.
BlackRock entering the race caused Bitcoin's price to spike and a number of other major fund managers followed suit. Yesterday, major U.S. firm Fidelity submitted an application. Invesco, Wisdom Tree, Valkyrie, and Bitwise have also sent similar applications.
A spot Bitcoin ETF does not yet exist in the U.S. because the SEC has been reluctant to approve one. The regulator claims that the price of Bitcoin being open to manipulation is one of the main reasons.
But investors want access to such a product because it would allow them to get involved with Bitcoin without having to deal with the custody of the asset, according to experts.
And Fidelity claimed in their application yesterday that the product would help investors wanting in on the crypto world avoid risk.
An ETF is an investment vehicle that tracks the value of an underlying asset, like gold, foreign currencies, or Bitcoin.
But the SEC last week approved the first first leveraged Bitcoin futures ETF: Volatility Shares 2x Bitcoin Strategy ETF (BITX) opened to investors on the Chicago Board Options (CBOE) BZX Exchange on Tuesday.