SEC Rejects Fidelity's Wise Origin Bitcoin Trust spot ETF

The United States Securities and Exchange Commission (SEC) has published an order disapproving a proposed rule change to list and trade the shares of the Fidelity Investment-backed Wise Origin Bitcoin Trust under the BZX Rule, marking another blow in the pursuit of the spot Bitcoin Exchange Traded  Fund (ETF) product in the United States.

Fidelity Investments filed the application for the Bitcoin spot ETF product as far back as March 2021, as reported by Blockchain.News.

The heartbreaking news came after much postponement of the decisions regarding the application. As a justification, the SEC said the product, billed to list on the Cboe BZX Exchange, does not have sufficient resources to guard against “fraudulent and manipulative acts and practices.”

“It is essential for an exchange listing a derivative securities product to enter into a surveillance-sharing agreement with markets trading the underlying assets for the listing exchange to have the ability to obtain information necessary to detect, investigate, and deter fraud and market manipulation, as well as violations of Exchange rules and applicable federal securities laws and rules,” stated the SEC ruling.

Investors have clamoured for a Bitcoin ETF product that tracks the exact price of the premier digital currency for quite some time, and the anticipations have often climaxed in rejections as the SEC is still sceptical of the crypto market’s maturity to stump price manipulations.

There are several index managers that are still anticipating the decision from the SEC. Some of these include Bitwise and Valkyrie, whose decision was pushed to this year.

The United States is arguably known as the epicentre of financial innovation. However, when it comes to a spot BTC ETF, the platform is lagging behind other countries, including Canada, Switzerland, and Brazil. With conviction in the current disposition of SEC Chairman Gary Gensler, The expectations that the Biden administration will herald a Bitcoin ETF product is still very high.