US SEC Considers Spot Bitcoin ETF Filings Inadequate: Report

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There may be a longer wait for a spot Bitcoin exchange-traded fund (ETF) in the United States, as the Securities and Exchange Commission (SEC) has called recent requests from investment managers inadequate.

According to the Wall Street Journal, the securities regulator told Nasdaq and the Chicago Board Options Exchange (Cboe) that their documents were not “clear and complete enough.” These exchanges represent the asset managers in filing the financial product.

In the eyes of the SEC, exchanges should have named the spot bitcoin exchange with which they have a “shared oversight agreement” or provided enough information about the details of those oversight agreements. However, asset managers can resubmit the filings after clarifying the information.

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A flurry of applications has been filed over the past few weeks since BlackRock joined the list of companies seeking to launch Wall Street’s first Bitcoin ETF. BlackRock’s app introduced a “monitoring sharing agreement”, under which information about market trading and clearing activities is shared between entities to avoid the possibility of market manipulation.

BlackRock’s application led ARK Invest and 21Shares to amend their third application for a spot BTC ETF to include a similar oversight agreement. Other asset managers that have filed or amended their applications in recent days include Invesco, WisdomTree, Valkyrie and Fidelity. ARK Invest, however, would be a favorite in this race.

ETFs track a specific index and are usually traded on exchanges. In the cryptocurrency market, a fund that tracks the price of one or more digital tokens and consists of various cryptocurrencies is called a cryptocurrency ETF.

Spot Bitcoin ETFs have been disallowed since 2017 by the SEC. In Canada, however, financial products are already available. Three prominent funds Purpose Bitcoin, 3iQ Coinshares and CI Galaxy Bitcoin are all directly invested in spot Bitcoin.

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