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Breaking: SEC Declines Fidelity’s Spot Bitcoin ETF

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According to reports, the SEC has rejected Fidelity’s spot settled Bitcoin ETF application. After postponing a decision on Fidelity’s Wise Origin Bitcoin Trust which was filed in March last year several times, the SEC has finally announced that it is rejecting the proposal. The Securities regulator cites that the proposal failed to meet investor protection standards.

SEC Rejects Second Spot Bitcoin ETF Application In 2022

The SEC has rejected Fidelity’s Wise Origin Bitcoin Trust spot Bitcoin ETF application. The commission stated that the application failed to demonstrate that it was fraud and manipulation proof.

In a similar move, the SEC also rejected Skybridge’s spot Bitcoin ETF last week. The SEC explained  that approving the ETF would not be in the best interest of investors.

This order disapproves the proposed rule change. The Commission concludes that BZX 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 Exchange Act Section 6(b)(5), the SEC ruling reads in part.

It elaborates that in particular, the proposal failed to meet requirements for gathering information that would enable the exchange “detect, investigate, and deter fraud and market manipulation, as well as violations of exchange rules and applicable federal securities laws and rules.”

This final ruling is coming after the ETF application saw two decision deadline extensions in June and November last year. Fidelity Investments seems to have already given up hope of getting an approval. After lobbying the SEC in September, Fidelity announced plans to launch the ETF in Canada in December. Recall that Fidelity has also been approved as Canada’s first custodian.

Spot Settled Bitcoin ETFs May Still Be A Long way Off

While the SEC gave the green light for three Bitcoin futures-backed ETFs to launch last, it has met spot settled ETF applications with strong resistance. This year, the SEC has already rejected Skybridge’s spot Bitcoin ETF proposal.

The SEC also moved the deadline for NYDIG’s Bitcoin ETF application in a recent ruling. However, spot settled Bitcoin ETF continue to be in high demand as market participants have noted that the investment vehicle can be game changing for Bitcoin.

 

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 1/27/2022

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