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Following its unofficial trend of recent exchange-traded funds, US SEC has added one more by rejecting a carbon-neutral bitcoin spot ETF
According to an order issued by the SEC on 27th May, the Securities and Exchange Commission has denied a request to change a rule to bring some changes in share listing and trading of a spot bitcoin exchange-traded fund proposed recently said to be a carbon-neutral one. The reason for rejecting such an exchange-traded fund was stated as the absence of demonstrating proper and enough investor protection measures.
In September 2021, the rule change was proposed by NYSE Arca to list and trade One River Carbon Neutral Bitcoin Trust’s shares. The carbon-neutral trust is backed by One River Asset Management’s fully owned subsidiary, One River Digital Asset Management.
The SEC order said that the commission concluded that NYSE Arca has not met the sufficient regulatory conditions that come under the Exchange Act and the Rules of Practice of the commission that would demonstrate that the proposal is consistent as per the Exchange Act Session 6(b)(5) ‘s requirements and the requirement of the rules comes under the national securities exchange, in particular as it is designed to make sure there will be no fraud and manipulative actions or practices being made on the platform and to ensure the protection of investors and general public interest.
While evaluating if the proposal of exchange was designed in such a way that it offers prevention from fraudulent and manipulative acts, there were the same standards applied by the SEC that were used in its orders that weigh the earlier proposals of listing commodity trusts based on bitcoin and similar bitcoin-based trust issued receipts, as per the orders of the SEC.
The order also stated that an exchange that includes a listing of bitcoin-based exchange-traded funds could meet its commitments following the Exchange Act Section 6(b)(5) while showing that the exchange firm has a comprehensive agreement for surveillance sharing with a significant sized regulated market that is related to the reference or underlying bitcoin assets.
The order said that such agreements several times act as a step that could discourage the manipulative activities because they provide the information available, which is necessary to investigate such manipulation entirely that should occur usually.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
