US SEC rejects carbon-neutral bitcoin ETF

Last Updated: 2 June 2022

The US Securities and Exchange Commission (SEC) has once again rejected an application for a spot bitcoin ETF. This time it concerns the CO2-neutral spot bitcoin ETF of One River. The American One River is an asset-management fund with a focus on crypto.

Market manipulation’ too big

This is certainly not a small boy in the market, as it has a total of USD 2.1 billion (EUR 1.995 billion) under management for clients. It has been more, however, as in 2017 it even had more than €3 billion in assets on its balance sheet.

One River was planning to list the Carbon Neutral Bitcoin Trust on the New York Stock Exchange Arca. That party will not take place, because the SEC considers the risk of market manipulation and fraud still too great on the bitcoin spot market. The SEC states that it has applied the same standards as in previous applications. One River proposed another rule change according to the SEC document cited above, but the regulatory body did not accept it.

Rejection says nothing about bitcoin value

In the information document on the decision, the SEC also made it clear that the rejection of the spot bitcoin ETF says nothing about the regulator’s position on the value of bitcoin. “The rejection of the proposed rule change does not rest on the answer to the question of whether bitcoin or blockchain technology represent value as an innovation or asset,” the SEC clarified in the release.

With the rejection, One River joins a long line of other fund managers who have tried to market a US spot bitcoin ETF. The first to try to bring a spot bitcoin ETF to the US market were the Winklevoss brothers. In 2013, they filed a request with the SEC to allow a spot bitcoin ETF into the markets. We are now almost 10 years on and have made little to no progress on this issue.

The list gets bigger

The rejection of One River’s spot bitcoin ETF puts it in a list that includes New York Digital Investment Group (NYDIG), SkyBridge, Global X, Fidelity Investments and many more major players. In most cases, the SEC pointed to the alleged high risk of manipulation and fraud in the market for rejection.

In April, the application of the duo Ark Investment Management and 21Shares was also rejected. According to the SEC, the investment product did not meet the minimum requirements of investor protection. Last month, things seemed to be moving forward after Grayscale, which has been trying to get a spot bitcoin ETF on the market since 2017, met with the SEC about their application. According to Grayscale representatives, it was a fruitful conversation.

Grayscale’s goal is to turn the Grayscale Bitcoin Trust into a spot bitcoin ETF. This Grayscale fund currently has over 600,000 bitcoin under management for their clients. Grayscale’s application deadline is July 6 this year.!

Author

  • Florian Feidenfelder is a technical analyst with many years trading experience in the stock exchange and crypto markets. He has broad experience in forex trading, coaching, and funds management.

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