SEC has passed a ruling in which it has rejected the proposal of VanEck with regard to Bitcoin Spot Market ETF on the grounds of lacking consumer protection. Says such an ETF will expose investors and consumers to grave risks.
It has been a very short while since when the Securities & Exchange Commission of the US (SEC) had given approval for Bitcoin Future ETF. However, there was two ETF proposal that was pending before the SEC for quite some time. One proposal was concerning Bitcoin Future Trading and the other proposal was in respect of Bitcoin Spot Market ETF. Bitcoin ETF approval by SEC then gave rise to a fresh debate. In this debate, Bitcoiners started to suggest that approval for Bitcoin Spot Market be also given by SEC. However, SEC denied recommendations supported by the Bitcoin community and maintained its stance over the approval of Bitcoin Spot Market ETF.
However, there was another proposal with regard to Bitcoin Spot Market ETF, which came from a very powerful and influential company. The proposal was that of VanEck, which is a renowned asset management company and operates globally. In its proposal, VanEck raised certain arguments to convince SEC that there is no harm in allowing Bitcoin Spot Market ETF. The proposal was addressed to SEC’s Chairman, Gary Gensler.
It was reported earlier that the proposal reached the address which fact was further confirmed by SEC’s Chairman himself in a statement. Although, the Chairman SEC has the power to reject or accept the proposal at his sole discretion. Yet he neither rejected it nor accepted it immediately. In fact, he said that he will thoroughly peruse the contents of the proposal and the recommendations made therein. Only after detailed consideration, he will decide whether the proposal can be accepted or not.
It may be mentioned here as well that VanEck is an interested party that wishes to launch a Bitcoin Spot Market ETF. As a matter of fact, VanEck had also submitted its application for such approval before SEC, which was pending decision.
However, on the 12th of November, 2021, SEC has made its decision on VanEck’s proposal for Bitcoin Spot Market ETF. The authority has decided to deny the proposal and stick to its original scheme that Bitcoin Spot Market ETF cannot be granted permission. The rejection of the proposal was duly deduced in order in the form of a ruling setting up a proposition. In the decision, SEC notes that the proposal of Bitcoin Spot Market ETF has failed to pass the regulatory check.
It was further noted in the decision of SEC that Bitcoin Spot Market ETF does not provide the required level of protection to investors. If permission is granted, then the consumers may be exposed to possible financial and monetary risks. Keeping in view this, the authority cannot accept the proposal and has had to reject the proposal for the sake of consumers.