The U.S. Securities and Exchange Commission (SEC) has rejected the Wisdom Tree Bitcoin Trust ETF, citing it as having no effective means of protecting investors from market manipulation.
of the SEC On sale October 11th Note that the Bitcoin ETF issuer had to decline the application by the BZX exchange because it does not have a significant oversight sharing agreement with Bitcoin’s regulated market.
The Surveillance Sharing Agreement allows market participants to easily share the identities of their customers with market trading and clearing activists in the event of BTC price manipulation.
Given that the Bitcoin market is highly unregulated, according to the SEC, an oversight agreement is important before approving a spot Bitcoin ETF.
First Wisdom Tree Spot Bitcoin ETF Also was denied In December 2021 for investor protection.
SEC and Spot Bitcoin ETF Rejection
The SEC’s decision to deny the Wisdom Tree ETF application should come as no surprise to many.
The Winklevoss twins were the first attempt to submit a Bitcoin ETF in July 2013. However, the SEC rejected their application in March 2017.
The VanEck Solidx ETF followed in July 2013 but was dismissed in January 2019.
In 2017, ProShares, Direxion, and GraniteShares tried to approve their respective applications, but the SEC dialed down.
Bitwise, Wilshire and Reality Shares ETFs all rejected applications they made in 2019.
By mid-2020, Wisdom Tree filed its first application, which was rejected by the SEC about a year later.
VanEck re-filed in January 2021, and Fidelity, NYDIG, and GrayScale all filed for Bitcoin ETFs around the same time. VanEck’s application was again denied in November 2021.
As of 2022, the SEC has denied filings by GrayScale, BitWise, and the latest Wisdom Tree.
The growing list of rejected spot Bitcoin ETF applications has been influenced by SEC Chairman Gary Gensler. Gensler has expressed his preference for futures ETFs, saying spot ETFs are prone to fraud and manipulation.