SEC Rejects Bitcoin ETF Applications From Three Companies
The U.S. Securities and Exchange Commission (SEC) has rejected nine applications from three companies. The proposals rejected are from ProShares, Direxion and GraniteShares.
In an explanatory note the SEC stated: "[T]he Commission is disapproving this proposed rule change because the Exchange has not met its burden under the Exchange Act and the Commission's Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that a national securities exchange's rules be designed to prevent fraudulent and manipulative acts and practices."
The SEC had previously already rejected applications from ProShares. This time, the basis for rejection was the following: “the Exchange has offered no record evidence to demonstrate that bitcoin futures markets are ‘markets of significant size.’ That failure is critical because, the Exchange has failed to establish that other means to prevent fraudulent and manipulative acts and practices will be sufficient, and therefore surveillance-sharing with a regulated market of significant size related to bitcoin is necessary.”
These fresh rejections are in addition to earlier cases reviewed and disapproved by the SEC; among such cases were applications from the Winklevoss twins. The SEC also delayed its decision for applications filed by investment firm VanEck and financial services company SolidX until September.