SEC Rejects Nine Bitcoin ETF Proposals

The US Securities and Exchange Commission (SEC) has rejected applications for nine bitcoin exchange-traded funds (ETF) from ProShares, Direxion and GraniteShares.

On August 22, the SEC rejected five proposed crypto ETFs from Direxion, two from GraniteShares and two from ProShare. Direxion’s and ProShares’ proposed crypto ETFs are meant to be traded on the New York Stock Exchange (NYSE) Arca, while GraniteShares’s ETFs are for listing on the Chicago Board of Options Exchange (CBOE).

For all three disapprovals, the SEC used the exact same reasoning, saying that: “[T]he Commission is disapproving this proposed rule change because, as discussed below, the Exchange 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 the Exchange Act Section 6(b)(5), in particular the requirement that a national securities exchange’s rules be designed to prevent fraudulent and manipulative acts and practices.”

The SEC noted that “its disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment.”

The disapprovals came after the SEC rejected a second attempt by Cameron and Tyler Winklevoss, the founders of cryptocurrency exchange Gemini, to list the first-ever crypto ETF on a regulated exchange. Several additional proposals are still waiting on the regulator’s review, including joint proposal from investment firm VanEck and financial services company SolidX, for trading on the CBOE.