According to local media reports citing people familiar with the matter, the U.S. Securities and Exchange Commission has notified Nasdaq and Cboe Global Markets that the Bitcoin spot ETF documents they submitted on behalf of asset management institutions such as BlackRock and Fidelity Investments are not clear and comprehensive enough.
Here we need to mention the background. The latest round of Bitcoin market originated from BlackRock's application to establish a Bitcoin spot ETF in mid-June. Unlike investing in CME Bitcoin futures contracts, spot ETFs are direct investments in Bitcoin, which is why the "cryptocurrency circle" is excited about the participation of traditional financial institutions such as BlackRock. In just two weeks, Bitcoin quickly rose from $25,000 to $30,000, and also hit a nearly one-year high during this period.
In addition to BlackRock and Fidelity, well-known institutions such as Catherine Wood's Ark Capital, Invesco, and WisdomTree are all applying for or restarting applications to establish spot Bitcoin ETFs.
For the cryptocurrency industry, if this product can get the nod from US regulators, it will have the opportunity to become an important milestone in the history of the entire cryptocurrency. This means that overnight, US stock investors will be able to buy and sell Bitcoin in their brokerage accounts, just as easily as buying and selling stocks. At the same time, this will also bring continuous incremental funds to the Bitcoin market.
Since 2017, the US SEC has rejected all applications for Bitcoin spot ETFs, emphasizing that such assets are very susceptible to fraud and market manipulation. Therefore, BlackRock, the world's largest asset management company, is the strongest choice for "breaking through the barriers". Market participants are also eagerly looking forward to BlackRock's ability to reach some kind of agreement with the SEC to establish an industry paradigm for Bitcoin spot ETFs.
In order to convince regulators to approve their applications, all applicants mentioned the “supervision sharing agreement” - Bitcoin-related markets must “share information about market trading activities, clearing activities and customer identities.”
According to people familiar with the matter, the SEC has now returned the applications to the exchanges, with the reasons for the rejection including that the applicants failed to disclose which exchange they had entered into a "sharing oversight agreement" with and to provide sufficient information about those agreements.