The last weed has certainly been a rather bumpy ride for several exchanges that were expecting to get the go ahead to finally launch a variety of Bitcoin ETFs.
Back on 22 August, the US SEC finally made a decision regarding 9 different ETF proposals sent in by 3 applicants, Direxion, GraniteShares, and ProShares. However, the decision denied permission to the trio to go ahead with new product and service plans. ProShares was aiming to issue two new Bitcoin ETFs, Direxion was looking to get approval for 5 products, while GraniteShares were hoping to get permission for two offerings of their own.
Interestingly, the SEC reversed on its own decisions back on 23 August, and released a statement saying that the body would review the decisions it had made regarding all 9 ETFs.
The SEC has yet to reveal a deadline for this review, but it certainly bodes well for the applicants, who might just be able to move ahead with their offerings.
The regulatory body had kept insisting on the same grounds when rejecting all of the ETF proposals. The main idea was to “prevent fraudulent and manipulative acts and practices”, and the SEC is reluctant to give permissions without companies satisfactorily express their compliance.
The SEC also expressed concerns regarding the scale of the BTC ETF market. Given that the market is still rather small, there are concerns that that the exchanges might not able to make sure there isn’t any market manipulation.
“Among other things, 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.”
Notably, the SEC also made it known to the industry that its initial decision was definitely not influenced by the prices and uses of BTC and Blockchain tech, nor was it its own reflection on the same.