U.S. securities regulators have rejected listings for two proposed ETFs based on spot Bitcoin (BTC-USD) trading. Authorities continued to show skepticism about creating such exchange traded funds, amid lingering government worries about a lack of visibility in cryptocurrency markets.
The decisions came even as the Biden administration made a high-profile push earlier in the week to secure U.S. leadership in the crypto space.
The latest rejections, made by the U.S. Securities and Exchange Commission, related to the NYDIG Bitcoin ETF and Global X Bitcoin.
Using the same language in its explanation for rejecting both the proposed investment vehicles, the SEC pointed to a lack of a surveillance-sharing agreements with a crypto exchange of adequate size. These deals would ensure that the market would provide trading details, such as information about clearing activity and customer identity.
“The Commission has consistently required that the listing exchange have a comprehensive surveillance-sharing agreement with a regulated market of significant size related to Bitcoin or demonstrate that other means to prevent fraudulent and manipulative acts and practices are sufficient to justify dispensing with the requisite surveillance-sharing agreement,” the SEC said in its filings.
The denials for NYDIG Bitcoin ETF and Global X Bitcoin follow a pattern by the SEC, which has been reluctant to approve a spot Bitcoin fund. Last month, regulators delayed a decision on a Bitwise Bitcoin filing.
Meanwhile, in January, the SEC rejected proposed spot Bitcoin ETFs from both Fidelity and SkyBridge. These moves followed previous denials for firms like Kryptoin, VanEck, and WisdomTree.
Even as spot Bitcoin ETFs continue to face rejections, the context surrounding crypto regulation has shifted in recent days.
Earlier this week, the Biden administration issued an executive order calling for government agencies to examine the benefits and risks of crypto, part of a general push for increased regulation. At the same time, the order affirmed the government’s commitment to encouraging innovation in the sector.
“The United States must maintain technological leadership in this rapidly growing space, supporting innovation while mitigating the risks for consumers, businesses, the broader financial system, and the climate,” the executive order said.
