US SEC Rejects Application for the VanEck’s Bitcoin-Backed ETF

The US Securities and Exchange Commission (SEC) announced on Friday that it had rejected the application for the VanEck Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term exchange-traded fund (ETF). According to the Financial Times, the disapproval comes when there are concerns over ‘wash trading,’ among other factors like ‘fraudulent and manipulative acts and practices’.

The regulator adds that its decision was based on a need to protect investors’ interests. Moreover, the Financial Times stated that US regulators are concerned that potential fraud on the cryptocurrency market could hit regulated exchanges.

Among the concerns, the SEC raised in the disapproval order included possible ‘wash trading,’ when the same institution is on both sides of the trade, generating extra fees for minimal risk; potential price manipulation by whales who dominate bitcoin; and possible “manipulative activity involving the purported ‘Stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term’ Tether,” the outlet noted.

“We are obviously disappointed in today’s update from the SEC declining approval of our physical bitcoin ETF. We continue to believe that investors should have the ability to gain exposure to bitcoin through a regulated investment product and that a non-futures ETF structure is the superior approach,” Jan van Eck, Chief Executive of VanEck, commented in reaction to the news.

SEC and Crypto ETFs

The announcement cannot be surprising given the history of SEC officials concerned about trading conditions in the crypto market and how it could help bolster frauds, scams and abuse, as Gary Gensler, the SEC Chair, once stated.

At the end of October, the US SEC rejected at least one of the two recent Bitcoin exchange-traded fund (ETF) applications because of the risky nature of the leveraged financial products.

Such an announcement came nearly two days after Valkyrie filed for a leveraged Bitcoin futures ETF and Direxion applied for an inverse fund for bears. Eric Balchunas, Bloomberg’s senior ETF analyst, highlighted the recent rejection reports and said that it would be interesting to see if the US Securities and Exchange Commission let the inverse fund go through.