US SEC Spots Bitcoin ETF Filing Insufficient: Report

Spot bitcoin (BTC) exchange-traded funds (ETFs) in the United States may be in for a long wait, as the Securities and Exchange Commission has labeled recent applications from investment managers as insufficient.

According To The Wall Street Journal, the securities regulator told Nasdaq and the Chicago Board Options Exchange (CBOE) that their filings were not “sufficiently clear and comprehensive”. These exchanges represent asset managers in financial product filings.

In the eyes of the SEC, exchanges should have named the spot bitcoin exchange with which they would have a “monitoring-sharing agreement” or provided sufficient information about the details of those monitoring arrangements. However, the asset manager may resubmit the filing after clarifying the information.

The past few weeks have seen a flurry of applications since BlackRock joined Wall Street’s first list of companies interested in launching a bitcoin ETF. BlackRock’s application introduced a “surveillance sharing agreement”, under which information about market trading and clearing activities is shared between entities to avoid the potential for market manipulation.

BlackRock’s application prompted ARK Invest and 21Shares to amend their third application for the Spot BTC ETF to include a similar custody agreement. Other asset managers who have re-filed or revised their applications in the past include Invesco, WisdomTree, Valkyrie and Fidelity. However, ARK Invest is reportedly leading the race.

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

The Spot Bitcoin ETF has been rejected by the SEC since 2017. However, the financial product is already available in Canada. Three important funds – Purpose Bitcoin, 3iQ CoinShares and CI Galaxy Bitcoin – have all invested directly in Spot Bitcoin.

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