Valkyrie and Kryptoin Spot Bitcoin ETF Applications are Rejected by the SEC

The Securities and Exchange Commission (SEC) of the United States has rejected two additional physically backed Bitcoin exchange-traded funds (ETFs) proposed by Valkyrie and Kryptoin.

The SEC provided the same arguments it used in the past when rejecting other applications in both decisions, which can be found here and here.

NYSE Arca and Cboe BZX Exchange, which filed proposed rule modifications to list and trade Valkyrie and Kryptoin products, respectively, "failed to establish that their proposals are compatible with the requirements of Exchange Act Section 6(b)(5)," according to the Commission.

According to the SEC, this is related to the need that a national securities exchange be "intended to prevent fraudulent and manipulative acts and practises" as well as "to safeguard investors and the public interest."

An ETF is an investment vehicle that allows investors to buy shares that track the price of an underlying asset. A Bitcoin ETF, as the name suggests, would give exposure to Bitcoin, saving the hassle of purchasing the cryptocurrency from an exchange and managing the private keys.

The SEC has repeatedly rejected or delayed all attempts to launch a Bitcoin ETF, even though American investors can access such products North of the border in Canada. Earlier this year, the regulator, however, greenlit several Bitcoin futures ETFs tied to Chicago Mercantile Exchange’s (CME) derivatives markets.
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No Bitcoin ETF in 2021

The Commission’s latest move means that the market will not see a spot Bitcoin ETF this year, with the next important dates coming next month.

The SEC is due to rule on Anthony Scaramucci’s Skybridge Bitcoin ETF before January 22, with a decision on Fidelity's Wise Origin Bitcoin Trust application due on January 27.

In November, the regulator rejected a spot Bitcoin ETF application filed by investment firm VanEck, followed by the disapproval of WisdomTree’s filing in early December.

Last week, the SEC delayed for another 45 days decisions on Bitcoin ETFs proposed by digital asset managers Bitwise and Grayscale.

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