https://www.reuters.com/markets/funds/us-sec-rejects-valkyrie-kryptoin-bitcoin-trusts-2021-12-23/

 
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December 23, 20218:36 PM UTCLast Updated ago
Funds

U.S. SEC rejects Valkyrie, Kryptoin bitcoin trusts

By Hannah Lang and Katanga Johnson

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2 minute read
A representation of the virtual cryptocurrency Bitcoin is seen in
this picture illustration taken October 19, 2021. REUTERS/Edgar Su
REUTERS/Edgar Su
A representation of the virtual cryptocurrency Bitcoin is seen in
this picture illustration taken October 19, 2021. REUTERS/Edgar Su
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REUTERS/Edgar Su

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Dec 23 (Reuters) - The U.S. Securities and Exchange Commission vetoed
two proposals to offer bitcoin exchange-traded funds, dealing a blow
to market participants who had hoped the agency would green light the
effort after approving futures-backed bitcoin funds in October.

In a notice dated Wednesday, the markets regulator said both of the
proposals to list and trade shares of Valkyrie Bitcoin Fund and the
Kryptoin Bitcoin ETF Trust failed to be approved because they did not
meet its standard.

"(These proposals) do not meet the standard of being designed to
prevent fraudulent and manipulative acts and practices and to protect
investors and the public interest," the SEC said.

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The SEC in October approved two bitcoin futures-based funds, the
ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF,
which made their Wall Street debuts the same month.

However, the regulator has yet to accept an application for a spot
bitcoin ETF. Last month, the SEC rejected an application to create a
spot bitcoin fund from VanEck, and on Dec. 17, delayed a decision on
a similar proposal from Grayscale Bitcoin Trust.

ETFs are investment tools that track baskets of stocks and have
become popular due to their lower fees. A Bitcoin ETF, which provides
exposure to the digital currency, aims to save the hassle of buying
the cryptocurrency from an exchange and managing the private keys.

Industry groups and stock exchanges have long sought to gain approval
from the SEC on these products.

Democratic SEC Chair Gary Gensler and investor advocates, however,
worry about what they see as a lack of regulatory oversight and
surveillance which heightens the potential for fraud and
manipulation, they have said.

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Reporting by Hannah Lang and Katanga Johnson in Washington Editing by
Nick Zieminski

Our Standards: The Thomson Reuters Trust Principles.

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