The US Securities and Exchange Commission has not approved a rule change that would allow exchange-traded fund (ETF) provider WisdomTree to list and trade bitcoin stocks.
According to an October 11 filing, the Securities and Exchange Commission (SEC) rejected a proposed rule change that would allow WisdomTree to list and trade Bitcoin Trust shares on the Cboe BZX exchange after several delays due to extensions and suspension periods. WisdomTree first applied for a Bitcoin ETF listing on January 25 with a listing on the Federal Register on February 14.
The SEC said any rule change in favor of ETF approval would not be “intended to prevent fraudulent and manipulative activities and practices” or “to protect investors and the public interest”. Will Beck, head of digital assets at WisdomTree, told Cointelegraph that the company will work to give investors exposure to cryptocurrencies, but hinted that plans for an ETF are still in the works.
“WisdomTree believes in the power of transparency and we only release products that meet high regulatory, regulatory and safety standards because this will lead to investor success,” Beck said. “We know that regulatory issues take time to resolve and appreciate due diligence in doing so. We understand that this is a slow process and will not let that stop us from innovating in other areas.”
In an interview in September, Beck said the SEC allegations of market manipulation would likely be the “hardest crack attempt” in the ETF’s approval, adding that WisdomTree “sort of look at it and see what happens.” But he did not plan to take grayscale. Approach to filing a lawsuit with the SEC over the rejection of the Bitcoin ETF. He said the company plans to “participate more productively” with the US regulator, suggesting that the SEC will “eventually get there” in terms of approving a tool for spot investment in cryptocurrency.
Similar to the December 2021 rejection of WisdomTree’s Bitcoin ETF spot offer, the SEC concluded that the BZX exchange was unable to “obtain the information necessary to detect, investigate and prevent fraud and market manipulation, as well as exchange violations.” and applicable federal securities laws and regulations.” In addition, the financial regulator said BZX failed to provide data indicating that “market participants will ignore fake trading and other potential sources of fraud and manipulation in the broader bitcoin spot market.”
“BZX has failed to bear the burden of showing sufficient cause for the Commission to find that the offer is in accordance with Section 6(b)(5) of the Exchange Act, 225, and, consequently, the Commission must decline the offer.” The statement says.