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The SEC has asked Bitwise to clarify how it will prevent share manipulation, fraud and other potential issues in its proposed spot bitcoin ETF
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Bitwise’s Proposed Spot Bitcoin ETF Awaits SEC’s Approval or Denial

The Securities and Exchange Commission (SEC) remains undecided about the proposed spot Bitcoin ETF. Today, the SEC asked Bitwise to clarify how it will prevent share manipulation, fraud, and other potential issues in its proposed spot Bitcoin ETF

The SEC also flagged its concerns over the liquidity and transparency of the spot Bitcoin ETP Trust. As a result, the body requested more colour on the “suitability” of Bitcoin as the underlying asset for the fund.

The SEC Yet Delayed Bitwise’s Proposed Spot Bitcoin ETF

In its statement, the SEC stated that it has not reached any conclusion on an NYSE Arca application to list Bitwise’s proposed spot Bitcoin ETF.

Bitwise Asset Management, along with NYSE Arca submitted their proposed rule change in October 2021. The SEC postponed its decision on the proposal in December to February 1, 2022, only to further postpone it.

It is not new for the SEC to decide on whether to give approval or deny Bitcoin spot ETFs proposal. Most proposal gets rejected eventually.

Over the past two months, the SEC has rejected applications from WisdomTree, Krypton, SkyBridge, and Fidelity, to name a few. The agency is considering several other applications from investment firms. Last December, the agency delayed a decision on the spot Bitcoin applications of Bitwise and Grayscale, a unit of Digital Currency Group, which is the parent company of CoinDesk.

Bitwise will have 21 days to respond to the SEC’s concerns. Nevertheless, futures-backed products like ProShares Bitcoin Strategy ETF and VanEck Bitcoin Strategy ETF received green signal.

The SEC Sought Public Comments on Bitwise Bitcoin Spot ETF’s Proposal

Aside from requesting clarifications from Bitwise, the SEC regulator has also sought public comments on the aspects of the fund’s application, such as expected trading volumes of the shares; protection against susceptible fraud and manipulation; liquidity and transparency of the bitcoin markets; among others.

According to the statement,

“The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal.”

With the SEC’s requests and move towards the application, Bitwise is on a balance as its application risks rejection. What do you think about Bitwise’s Proposed Spot Bitcoin ETF? Will it get approved or rejected? Tell us in the comments section below.

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