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‘The Exchange Has Not Met Its Burden:’ The SEC Rejects Another Round of Bitcoin ETFs

Bitcoin logo is seen on a mobile phoneBitcoin logo is seen on a mobile phone
It said the proposals failed to show how exchanges seeking to list the products would “prevent fraudulent and manipulative acts and practices.” (Photo by Omar Marques/SOPA Images/LightRocket via Getty Images)SOPA Images LightRocket via Getty Images

The U.S. Securities and Exchange Commission rejected another round of attempts to list exchange-traded funds backed by Bitcoin, blocking ETFs from ProShares, GraniteShares and Direxion on concern prices could be vulnerable to manipulation.

In a trio of orders posted on the agency’s website Wednesday, the commission said proposals to allow the funds failed to show how exchanges seeking to list the products would “prevent fraudulent and manipulative acts and practices.”

The SEC had already denied a request to list a Bitcoin ETF run by twins Cameron and Tyler Winklevoss in late July, citing a similar rationale. In that case, it wrote that the platform that would have listed their fund failed to prove the underlying market was “resistant to manipulation.”

The SEC’s resistance to crypto ETFs has taken a toll on Bitcoin’s price this year. But the earlier ruling had been widely viewed as a bad sign for remaining proposals — sapping some of the surprise from Wednesday’s decisions. After plummeting more than 50 percent this year, the top crypto currency rose less than 1 percent in early trading on Thursday in Asia to around $6,360.

“The commission emphasizes that its disapproval does not rest on an evaluation of whether Bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment,” the regulator wrote Wednesday. Rather, it disapproved because “the exchange has not met its burden.”