U.S SEC Rejects WisdomTree’s Spot BTC ETF Proposal


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After a very long wait and a second attempt, the United States Securities and Exchange Commission (SEC) has finally rejected WisdomTree’s spot Bitcoin (BTC) Exchange-Traded Fund (ETF) proposal. Like every other rejection which was issued in recent times, the regulator cited concerns about inadequate fraud and investor protections as reasons for the proposal rejection. 

The proposal submitted by the asset manager would have permitted WisdomTree to list and trade shares of its Bitcoin Trust on the Cboe BZX Exchange.

Its first rejection came in December 2021 and since then WisdomTree has been trying to get approval. In January 2022, WisdomTree made a second attempt and submitted another proposal to list spot BTC ETF.

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Thereafter, the proposal was published in the Federal Registry to gain comments from the public in February. Then later in March, the U.S SEC decided to prolong the time before they would give WisdomTree a response. 

According to the watchdog, a longer waiting period was issued to “approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.”

SEC Delays And Reject Series of Spot BTC ETF Proposals

Again in May, SEC chose the latter and instituted proceedings to determine whether to disapprove the proposed rule change.

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The U.S watchdog ended up delaying its decision further until now when it finally rejected the proposal of the asset manager. Markedly, the SEC has not issued any approval to list spot BTC ETF in a long while, therefore, WisdomTree’s rejection hardly comes off as a surprise.

In Q1, Bloomberg’s famous exchange-traded fund (EFT) analysts, Eric Balchunas and James Seyffart opined that receiving approval from the U.S SEC in terms of spot BTC ETF will only happen when the watchdog expands and modify the meaning of ‘exchange’ under its laws. 

These analysts say the modification is expected between November 2022 and May 2023. Until then, it does not look like any exchange is getting approval to list spot BTC ETF. After Grayscale Investment’s proposal was rejected, it went ahead to file for an appeal with the U.S Court of Appeals for the District of Columbia Circuit against the rejection decision.

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