The United States Securities and Exchange Commission (SEC) has declared that the recent filings to launch a spot bitcoin exchange-traded fund (ETF) are inadequate, causing a swift drop in the price of bitcoin (BTC) by over 3% or $1,000 in just a few minutes on Friday, media reports said.
The SEC has reportedly informed Nasdaq and CBOE, the exchanges responsible for filing the spot ETF paperwork on behalf of asset managers such as BlackRock and Fidelity, that the applications lack clarity and comprehensiveness. The filings were found to be deficient in terms of providing sufficient details about the “surveillance-sharing agreements,” including the identification of the spot bitcoin exchange to be utilized.
The asset managers have the opportunity to revise and refile their applications, with CBOE confirming its intention to do so.
The SEC has previously stated in its rejection orders for ETFs that sponsors of bitcoin trusts must establish surveillance-sharing agreements with regulated markets of significant size. This requirement ensures that any attempts at manipulating the price of an exchange-traded product (ETP) must occur on the same market where the ETP is based, allowing for identification of potential market manipulators.
Presently, there is no federal regulatory oversight of spot bitcoin markets, a situation the Commodity Futures Trading Commission has sought to change for several years.
An SEC spokesperson declined to comment on the possibility of individual filings, stating, “We would decline to comment on the possibility of individual filings,” according to CoinDesk.
The filing for a spot ETF by BlackRock in mid-June was a driving force behind the notable surge in the price of bitcoin, propelling the cryptocurrency from under $26,000 to one-year highs exceeding $31,000. The BlackRock application also prompted numerous filings from other asset managers, including Invesco and Fidelity, both of which resubmitted their previously rejected spot bitcoin ETF applications.
When approached by CoinDesk, representatives from BlackRock, Fidelity, and Galaxy (who filed in conjunction with Invesco) declined to comment.
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