US SEC Rejects Spot BTC Application from NYDIG and Global X

The United States Securities and Exchange Commission (SEC) has rejected the spot Bitcoin Exchange Traded Fund (ETF) applications from the duo of New York Digital Investment Group and Global X, extending the anticipation from investors with respect to the emergence of a full-fledged ETF product.

The SEC’s decision was contained in two separate filings in which it noted that the proposed exchanges in which both ETF products wanted to list including the Cboe BZX and the New York Stock Exchange (NYSE) Arca had not met the burden under the Exchange Act and the SEC’s Rules of Practice of showing the ETF would be “‘designed to prevent fraudulent and manipulative acts and practices” and “protect investors and the public interest.” 

This has always been the SEC’s reason for not allowing a spot Bitcoin ETF product even though the new set of applicants for the product claimed they are doing all within their power to meet the SEC’s demands.

No Spot ETF Despite There Being Futures-Based ETF Products

While the tide has not been very clear for the emergence of a spot Bitcoin ETF product, American investors have been getting some minimal exposure to the premier digital currency through futures-based ETF products like that from ProShares and VanEck, both of which were approved by the market regulator last year.

The application for the NYDIG and Global X application was filed last year in June and August respectively. Despite the time disparity, the decision-making process for both applications has been trailing one another and was characterized by a number of postponements and public consultations before the commission filing announced its rejection on Thursday.

While critics generally argue that there is no difference between the futures-based and a spot ETF-focused product, the SEC still has a number of applications to consider, one that has naturally kept the hopes of many that the commission may come around to favor at least one of the many applications undergoing review at this time.

The fears of the SEC about market manipulations are not entertained with other market regulators around the world. For what it’s worth, Countries like Brazil, Germany, Switzerland, and Canada have approved their first Bitcoin ETF product, making many tags the US as lagging behind new innovative trends.