The most recent Securities and Exchange Commission’s (SEC) Bitcoin ETF decision was the rejection of the long-awaited proposal by ProShares on August 22. Apart from this ETF, the SEC has also rejected nine other Bitcoin ETFs.
The SEC has also delayed a decision pertaining to the VanEck and SolidX proposals earlier this month. So now the big question that arises here is that what is causing this pushback from the U.S regulators. Listed below are some of the potential reasons behind the SEC’s rejection of Bitcoin ETF:
First of all, the SEC has clarified that in terms of its Bitcoin ETF decision of disapproving the ETFs, bitcoin isn’t the issue. The SEC stressed on the fact that the reason behind its disapproval of the ETFs is not based on an evaluation of whether bitcoin or blockchain technology has value or utility as an investment or an innovation.
It further stated in its explanation that the market size, in fact, is the issue. The SEC stated that the bitcoin market is relatively quite small and the exchange did not offer any record evidence to demonstrate that bitcoin futures markets are markets of significant size.
The second reason behind these rejections is that fraud and manipulation is a concern for the SEC. The agency clarified in its explanation that the ETFs were rejected since they did not meet the Exchange Act requirements, particularly the one pertaining to the crypto exchange being designed in a manner to prevent fraudulent and manipulative practices and acts.
Thirdly, the SEC stated that its decision on Bitcoin ETF rejections is also driven by bitcoin’s volume, which is mostly outside of the U.S., approximately three quarters precisely. The last potential reason behind the rejections is that there is wild swing on exchanges, as stated in the Bitcoin Exchange Guide report. While the SEC did not directly address this issue, but it suggested that it is more likely to accept ETFs of exchanges who worked together.
The post Potential Reasons Behind SEC’s Decision On Bitcoin ETF Rejections appeared first on OWLT Market.
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