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SEC also rejects Skybridge's "direct" bitcoin ETF

 


In rejecting Skybridge's "direct" Bitcoin ETF, the SEC cites reasons similar to those in the VanEck and WisdomTree cases.


The US Securities and Exchange Commission has now officially rejected the application for a "direct" Bitcoin index fund (ETF) from the investment company First Trust SkyBridge, after the decision on this had previously been postponed several times by the authority,


The SEC is denying NYSE Arca's request for listing approval for the First Trust SkyBridge Bitcoin ETF Trust, according to a Thursday filing. The SEC argues that the needed rule change would not "deter fraudulent behavior" nor "provide adequate protection for investors and the public."


SkyBridge originally applied for a “direct” Bitcoin ETF on the NYSE in March 2021. However, the SEC twice adjourned its decision and allowed itself longer review periods in order to be able to examine the filing closely. A decision was finally made this week.


The stock exchange supervisory authority also justified its refusal with reference to the NYSE, which, in its opinion, does not guarantee the conditions for the listing of a corresponding financial product. For example, stock exchanges that want to run a Bitcoin index fund would have to present “a full monitoring agreement with a sufficiently large Bitcoin market”.


The NYSE Arca uses only a $10 million sample market in its filing to show that buying large amounts of Bitcoin ( BTC ) "has negligible impact on the market." In this context, the stock exchange also refers to the massive USD 1.5 billion Bitcoin investment by the large car manufacturer Tesla in February, because this would have given investors “direct” access to BTC per share/securities. For this reason alone, new investment products are needed that offer a direct line to the market-leading cryptocurrency, so that investors no longer have to rely on compromise solutions that only “enable a partial investment in Bitcoin and are also associated with other risks”.


The SEC disagrees, citing reasons similar to those seen in the VanEck and WisdomTree direct bitcoin ETF rejections in November and December, respectively. So far, the SEC has not waved through an index fund that buys the associated Bitcoin assets directly. So far, only ETFs based on Bitcoin futures have been approved in the USA.


The decision on the direct ETF of the New York Digital Investment Group (NYDIG) is still pending for mid-March, the application for which was only postponed a few days ago .

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