SEC has rejected wisdomTrees application for Bitcoin Spot ETF. The commission has been differing on the decision on several occasions this year.
According to the filing, SEC’s rejection of the proposal for Cboe BZX exchange from listing and trading WisdomTree’s BTC trust. SEC further mentioned that ruling in favor of the ETF will not prevent fraud and manipulation practices.
According to the SEC, BZX does not meet the requirements to list a financial product. Therefore, the BTC ETF proposal will prevent the commission from getting the necessary information to note, make the investigation, and prevent fraud.
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Violations of the exchange rules and other applicable securities, including wash trading, are increasing late. BZX lacks acceptable means of preventing this from happening as an exchange.
The proposal is facing rejection, especially after BZX presents examples of Crypto Futures products with the CME group in its argument.
SEC’s reasons for rejecting WisdomTree’s application are similar to that of VanEck’s BTC ETF rejected last month. Since March, the commission has been delaying WisdomTree’s proposal. However, the commission had made it open to the public to comment.
However, all was not lost as their Basket ETF is now listed on the Euronext exchange in Paris and Amsterdam. This investment is also physically receiving backing from bitcoin and Ethereum.
In the meantime, another separate application submitted this year is under review, and the commission might reach its decision on December 24th, 2021.
Euronext is a European stock exchange operating listing crypto futures across the nation. The exchange also offers products ranging from Bonds, ETFs, and many others with issuers worth about £5.6 trillion in market cap.
What Are ETPs?
ETPs are securities trading on stock exchanges. They are primarily based on investment tools like fiat currency, shares, or interest rates. When comparing ETFs, ETPs products are fully received backing from the assets they track.
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WisdomTree has two ETPs that have already been launched. BLOC is one of the two. Its function is to expose investors to crypto coins reflecting about 70% in the crypto market cap. These are coins like Bitcoin Cash Cardano, Bitcoin, and Ethereum.
The other ETP is WALT, meant for investors exposed to mega capitalization coins like Ethereum and Bitcoin. But there is also yet another ETP launching in Europe soon.
This ETP will launch despite SEC’s rejection of WisdomTree’s application which has brought setbacks in the U.S.
Will SEC Finally Approve WisdomTree BTC Spot ETFs
WisdomTree is not the first to receive the rejection. Last month(November 2021), the commission also rejected VanEck’s application under BZX to track Bitcoins price movement closely. It looks like there is almost a problem with the BZX exchange after receiving rejections twice.
If BZX can address these concerns, the applications will go through almost immediately. However, these justification statements by the SEC have not begun today about ETF approval. It almost appears contradictory.
Therefore for the SEC to approve Bitcoin ETFs there must be a massive use case and investment of the same by many investors in the U.S.