The SEC has rejected another application of an exchange traded fund. As reported, WisdomTree filed for an ETF seeking permission from the United States Securities and Exchange Commission for Bitcoin (BTC) shares listing and trading.
On 11th October, the SEC filed for rejecting the proposal of rule change. Following the proposal, WisdomTree would be allowed for listing and trading of its Bitcoin Trust’s shares over one of the largest equities markets in the US, Cboe BZX exchange. After delays of several days given the extensions and given time of comments, the proposal finally got rejected.
The recent proposal was the second attempt from WisdomTree seeking an ETF. In January, 2022, the fund management company went on to file an application for its first spot bitcoin ETF and its publication took place in the following month within the federal register.
Head of digital assets at WisdomTree Investments, Will Peck said the claims of the SEC about the manipulation of markets would likely remain as the most typical part in order to get approval for an ETF.
The agency cited the rule change in order to approve the ETF neither be designed in such a way that it would mitigate the risk of fraud and manipulative practices nor it gives investors protection and in the public interest.
Peck stated WisdomTree was keeping eyes on whatever instances were taking place but did not move ahead to take the similar approach as Grayscale did. The company planned to be involved with the financial watchdog more productively and expected that it would reach at the conclusion regarding the approval of the proposed spot ETF.
For context, Grayscale also filed for the bitcoin ETF which got rejected by the SEC. The former went on to file a lawsuit against the financial regulator.
Earlier, WisdomTree filed for its offering of spot Bitcoin ETF which the agency rejected in December last year. While rejecting the proposal, the SEC stated the BZX exchange was not able to gather the crucial information which would be needed in order to detect, investigate and prevent any possibility of fraud and manipulation within the market. The agency also stated the violation of roles and necessary laws and rules under federal securities.
The SEC also added that the exchange did not have the ability to avail the data showcasing the wash trading and other similar possible sources linked to the fraud and manipulation within the entire bitcoin spot market.
The filing noted that BZX had not found to follow the necessary obligations for the agency to figure out the consistency of proposal with the Exchange Act Section 6 (b) (5), 225 and this made the commission to disapprove the proposal.
Rejection of WisdomTree is yet another spot ETF application rejected by the SEC. The latter has not approved any spot ETF for cryptocurrencies within the United States.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2022/10/12/sec-rejected-spot-bitcoin-etf-proposal-of-wisdomtree-investments/