The regulatory agency argued that the funds were not consistent to prevent fraudulent and manipulative acts and practices. Eric Balchunas said that everyone was optimistic about futures, but that decision caused doubts about their approval in 2022.
The US Securities and Exchange Commission (SEC) recently rejected two spot Bitcoin exchange-traded funds (ETFs) applications from Valkyrie and Kryptoin. The regulatory agency said the proposals did not comply with the requirements of section 6 (b) (5) of the Stock Exchange Act.
The official document indicated that the SEC rejected the spot Bitcoin ETFs due to similar market manipulation concerns. They referred to both the listing and trading of shares by the Valkyrie Bitcoin Fund and Kryptoin Bitcoin ETF Trust.
That is not the first time that a regulator has rejected a proposal from Kryptoin. In 2019, it did not receive the go-ahead from the authorities to operate.
The SEC Rejects the Applications from Valkyrie and Kryptoin
The SEC has turned down applications for spot Bitcoin exchange-traded funds many times. On December 22nd, the regulatory entity disproved the proposals they received from Valkyrie and Kryptoin.
The SEC argued that the Valkyrie and Kryptoin funds were not consistent to prevent fraudulent and manipulative acts and practices. For that reason, the agency stated that they decided to reject them to protect investors and the public interest.
According to the SEC, the proposals do not meet the requirements of section 6 (b) (5) of the Stock Exchange Act of 1934. They explained the rules of a national stock exchange must prevent fraudulent and manipulative acts and practices.
Some Analysts Give Their Opinion about the Decision by the SEC
James Seyffart, the ETF research analyst at Bloomberg, said that the decision by the SEC surprised him. He expressed that he did not understand why they rejected those ETF proposals.
Curiously, Seyffart posted an image of the latest Bitcoin funds that the SEC did not approve. Valkyrie and Kryptoin were the last ones on the list, and the next ones, First Trust and Skybridge, will receive their verdict before January 22nd.
ETF senior analyst Eric Balchunas commented that the SEC ruined this Christmas season with that decision, but there could be more to come. He stated that everyone was optimistic about futures, but now they are not confident of their approval in 2022. He stressed that the regulatory agency rejects ETF proposals faster than necessary.
The SEC Rejects Other Applications for ETFs
In November, the SEC rejected a spot Bitcoin ETF that investment firm VanEck submitted. After that, the regulatory entity turned down a request from WisdomTree.
Last week, the SEC delayed its decisions on the Bitcoin ETF proposals from Bitwise and Grayscale for another 45 days.
The SEC must decide on the Skybridge Bitcoin ETF proposal from Anthony Scaramucci before January 22nd. Concerning the decision on the Wise Origin Bitcoin Trust application from Fidelity, it is due on January 27th.
The latest move by the SEC indicates that the market will not see a spot Bitcoin ETF this year. It seems that regulators are still concerned that the use of crypto assets contributes to money laundering and terrorism financing.
By Alexander Salazar
