The U.S. Securities and Exchange Commission (SEC) rejected the application for the Carbon-Neutral Bitcoin exchange-traded fund (ETF) proposed by One River Asset Management.
SEC said that the application to list on the NYSE Arca exchange lacked ample investor protections. The agency has denied other spot bitcoin ETFs for the same reason as well.
To be precise, the watchdog had outlined Section 6(b)(5) and explained the need for the rules of a national securities exchange to be “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest”.
The watchdog has been rejecting other spot Bitcoin ETFs previously and it is adamant on rejecting big names too. Recently, the SEC rejected ARK 21Shares Bitcoin ETF application.
However, “… an exchange that lists bitcoin-based exchange-traded products can meet its obligations under Exchange Act Section 6(b)(5) by demonstrating that the exchange has a comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference bitcoin assets,” SEC wrote.
One River submitted an application for the ETF during May 2021, and the SEC announced in March that there will be a delay in its decision. This particular spot ETF application was different from others as One River had pledged to purchase and dispose of carbon credits to account for the emissions affiliated with the Bitcoin in the fund.
The SEC has green-lit some futures-based Bitcoin ETFs, yet it rejected (or delayed) all other bitcoin ETFs applications.
The Bitcoin-ETF market is expanding in the European region. Not long ago, Grayscale launched the first European ETF ‘GFOF’ on Selected Exchanges.