The Securities and Exchange Commission, SEC had until Nov. 14 to make a decision regarding whether to approve the VanEck Bitcoin ETF — the first exchange-traded fund in a long list of many “spot” bitcoin ETFs on the application desk of the regulator, or not. But finally, the SEC has disapproved of it, citing that the Bitcoin spot market is prone to “fraud and manipulation”.

SEC Rejects VanEck’s Spot-based Bitcoin ETF

According to a Friday filing, the SEC rejected a proposal for a rule change from the Cboe BZX Exchange, that will allow it to list and trade shares of VanEck’s Bitcoin (BTC) Trust. Without mincing words, the SEC stated that such a rule change in favor of approving the ETF, would be at the detriment of investors and public interest, not minding how such a rule would favor fraudulent and manipulative acts and practices.

Interestingly, this rejection was very much expected in the crypto community based on two recent happenings;

Firstly, SEC Chair Gary Gensler, has always been clear about the commision’s reservations about expanding crypto offerings, particularly a “spot” Bitcoin ETF. All along, he claimed that there can only be anything like that, if there is a clear rule defining which regulatory agencies have control over the various crypto spaces, such as crypto exchanges.

Another indication that the rejection was coming, is the legislation that came wrapped along with the recent infrastructure bill, which places onerous reporting requirements on crypto.

Little wonder that industry experts including Bloomberg senior ETF analyst Eric Balchunas claimed the SEC was highly unlikely to approve the VanEck fund, a prediction which ultimately came to be spot on.

What Then Can Crypto Enthusiasts Take Away From This Rejection?

Knowing fully well that the SEC actually did delay making a decision on the application at least twice before today, there’s some glimmer of hope in there. So it is fully understandable how, now that the maximum 240-day review period is over, the decision that was made must be made.

But then, a constant question on everyone’s mind would be if crypto enthusiasts are deluding themselves to think that a bitcoin ETF will ever be forthcoming.

The major issue is a jurisdictional one, a complex jurisdictional issue at that. It is regarding whether it should be regulated by the SEC or the Commodity Futures Trading Commission CFTC.

Now, while Bitcoin is a commodity and typically should be under the control of the CFTC, a Bitcoin ETF is a security, which would come under the jurisdiction of the SEC. So the SEC may be forced to maintain the status quo, until there is a clear regulatory authority over other parts of the crypto ecosystem, like the exchanges.

In short, it’s about to be a very long wait for a bitcoin ETF, but never write off the possibility.

The post SEC Disapproves VanEck Bitcoin ETF, But Here’s What Crypto Enthusiasts Can Take From The Rejection appeared first on Coingape.