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Why the SEC rejected the VanEck Bitcoin Spot ETF



On November 12th, the US Securities and Exchange Commission (SEC) again rejected VanEck's application for a Bitcoin Spot ETF, stating, among other things, the need to protect investors from the volatility of the digital currency.

SEC rejects VanEck again

Crypto enthusiasts had been hoping that the leading financial regulator would finally approve the listing of VanEck's spot application after approving a number of Bitcoin futures ETFs last month.

The sentiment was subdued, however, when the SEC insisted that it sell an ETF that offers direct exposure to BTC due to its volatile nature, as well as the fact that doing so is unclear as to whether the ETF would be able to fraudulently Preventing trade and protecting investors would not approve.

“This order disapproves of the proposed rule change. The Commission concludes that BZX has failed to fulfill its obligation under the Stock Exchange Act and the Commission's procedural rules to demonstrate that its proposal complies with the requirements of Section 6 (b) (5) of the Stock Exchange Act, in particular the requirement to that the rules of a national stock exchange are designed to prevent fraudulent and manipulative acts and practices "and to protect investors and the public interest," said the statement on Friday.

The crypto community is responding to the recent SEC rejection

When news of the SEC's recent rejection broke, members of the crypto community criticized the decision. Many of them wondered why the commission would be willing to accept a bitcoin futures ETF while rejecting a bitcoin spot ETF.

A Bitcoin Futures ETF differs from a Bitcoin Spot ETF in the sense that the latter offers direct exposure to the digital asset, while the former allows investors to have indirect exposure to the asset by buying stocks through broker accounts.

One of the reactions to the SEC's decision came from the Blockchain Association, which wrote that it was "disappointed" with the decision by the agency headed by Gary Gensler.

Jan Van Eck, the company's CEO, also tweeted about his disappointment with the new decision. According to him, "investors should be able to get #BTC exposure through a regulated fund and that a non-futures ETF structure is the better approach."

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