Home Business SEC dismisses 2 more BTC spot ETF applications from NYDIG, Global X

The U.S. securities markets watchdog hasnt changed its mind about BTC spot exchange-traded funds (ETFs), and in its latest action, it has rejected applications from digital asset investment manager NYDIG and ETF provider Global X.

TheSecurities and Exchange Commission(SEC) was to produce a decision on the NYDIG application by January 15, 2022. However, it extended the period of time for ruling on the proposal by 60 days, making March 16 the brand new deadline.

In itsfiling, the SEC has dismissed the ETF application by NYDIG, whose shares were to be listed and traded on the NYSE Arca exchange.

The Commission concludes that NYSE Arca have not met its burden beneath the Exchange Act and the Commissions Rules of Practice, the agency said, noting that specifically, the exchange had didn’t show it might enforce the necessity that the guidelines of a national securities exchange be made to prevent fraudulent and manipulative acts and practices also to protect investors and the general public interest.

The regulator described the necessity for an exchange that lists BTC spot ETFs to truly have a comprehensive surveillance-sharing agreement with a regulated market of significant size linked to the underlying or reference bitcoin assets. This agreement offers a necessary deterrent to manipulation and allows investigation if it can occur.

In the application form, NYDIG and NYSE Arca had argued that the SECs manipulation concerns have been significantly mitigated and they had enough measures set up to safeguard investors and deter fraud. However, the SEC is having none of it, claiming that its standards havent been met.

The watchdog did remember that its rejection of the ETFs isnt reflective of its stance on the worthiness or utility ofblockchain technologyor virtual assets.

Although it has been adamant against BTC spot ETFs, the SEC under Chairman Gary Gensler has recently approved several futures ETFs. This discrepancy in its treatment of the two forms of ETFs has not been down well with some, withGrayscale, an institutional investment firm thats under theMastercard cartel-linked Digital Currency Group, saying that the SEC is breaking regulations by not treating all ETFs just as.

Yesterday evening our attorneys at Davis Polk sent a letter to the SEC arguing that approval of #Bitcoin futures-based ETFs, however, not #Bitcoin spot-based ETFs, like $GBTC, is arbitrary and capricious, and for that reason in violation of the Administrative Procedure Act (APA).

Craig Salm (@CraigSalm) November 30, 2021

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